ME2 PRODUCTIONS, INC. Plaintiff v. DOE #1 ET AL. (SEE SCHEDULE 1 FOR LIST OF DEFENDANTS), 2019 FC 214

Date: 20190221 Dockets: T-2177-16 T-463-17 T-480-17 Citation: 2019 FC 214 Toronto, Ontario, February 21, 2019 PRESENT: The Honourable Mr. Justice Pentney Docket: T-2177-16 BETWEEN: ME2 PRODUCTIONS, INC. Plaintiff and DOE #1 ET AL. (SEE

SCHEDULE 1 FOR LIST OF DEFENDANTS) Defendants and AMANAH TECH INC., BELL CANADA, ROGERS COMMUNICATIONS INC., TEKSAVVY SOLUTIONS INC., PRIMUS TELECOMMUNICATIONS CANADA Non-Party Respondents (Disclosure Motion Only) Docket: T-463-17 AND BETWEEN: WWE STUDIOS FINANCE CORP. Plaintiff and DOE #1 ET AL. (SEE

SCHEDULE 1 FOR LIST OF DEFENDANTS) Defendants and AMANAH TECH INC., BELL ALIANT REGIONAL COMMUNICATIONS INC., BELL CANADA, CIK TELECOM INC., EASTLINK, DISTRIBUTEL COMMUNICATIONS LTD., ROGERS COMMUNICATIONS INC., TEKSAVVY SOLUTIONS INC., VIANET, VMEDIA INC. Non-Party Respondents (Disclosure Motion Only) Docket: T-480-17 AND BETWEEN: I.T. PRODUCTIONS, LLC Plaintiff and DOE #1 ET AL. (SEE

SCHEDULE 1 FOR LIST OF DEFENDANTS) Defendants and AMANAH TECH INC., BELL ALIANT REGIONAL COMMUNICATIONS INC., BELL CANADA, EASTLINK, DISTRIBUTEL COMMUNICATIONS LTD., ROGERS COMMUNICATIONS INC., TEKSAVVY SOLUTIONS INC., VMEDIA INC., PRIMUS TELECOMMUNICATIONS CANADA, START COMMUNICATIONS, XPLORNET COMMUNICATIONS INC. Non-Party Respondents (Disclosure Motion Only) ORDER AND REASONS I. INTRODUCTION [ 1 ] ME2 Productions, Inc. (ME2), WWE Studios Finance Corp., and I.T.

Productions, LLC (the Plaintiffs), say they have evidence that some TekSavvy Solutions Inc. (TekSavvy) subscribers have illegally downloaded and shared movies over which the Plaintiffs have copyright. Under the " “notice and notice” " regime enacted by the Copyright Modernization Act , SC 2012, c 20 , the Plaintiffs sent notice to TekSavvy of this activity, which in turn required TekSavvy to forward that notice to the subscribers. [ 2 ] The Plaintiffs say they have evidence that even after receiving this notice, some of these subscribers continued to unlawfully download and share their movies.

The Plaintiffs want the names and addresses of these subscribers in order to pursue action against them for breach of copyright. To obtain those names, the Plaintiffs sought a disclosure order from this Court (known as a Norwich order). They also claimed that TekSavvy had not complied with its obligations under the Copyright Act , RSC 1985, c C-42 [the Act ], and they

sought statutory damages for non-compliance. [ 3 ] TekSavvy objected, arguing that the Plaintiffs had not been forthright with the Court about which customers had received the notices and had not provided the evidence needed to obtain a Norwich order. TekSavvy also argued the claim for damages must proceed separately, rather than as part of the disclosure motion.

The Case Management Judge (CMJ) who heard the matter, Prothonotary Kevin Aalto, granted the Norwich order and set out the procedure for dealing with the statutory damages question (the Prothonotary’s Order). [ 4 ] This is TekSavvy’s appeal of that decision. [ 5 ] Two questions lie at the core of this appeal: i . What is the proper evidence and procedure to be followed in obtaining a Norwich order in a case which relates to the notice and notice regime established by the Copyright Modernization Act ? ii .

Can a claim of statutory damages in relation to an alleged breach of these provisions be dealt with in the context of an application for a Norwich order, or does it have to proceed as a separate matter? [ 6 ] As has been acknowledged by the CMJ and the parties, this is an emerging area of the law and the practices and procedures are still being developed.

An overarching consideration in this case is the degree of " “elbow room” " that should be given to a CMJ in making orders under this relatively new legal regime. [ 7 ] When the CMJ considered the matter, the governing authority was the decision of the Federal Court of Appeal (FCA) in Voltage Pictures, LLC v John Doe , 2017 FCA 97 [ Voltage Pictures ]. When this matter was argued before me, that case was on appeal to the Supreme Court of Canada (SCC); in the intervening period, the SCC has released its decision: Rogers Communications Inc v Voltage Pictures, LLC , 2018 SCC 38 [ Rogers Communications ].

I have received further submissions from the parties on the relevance of that decision to this case, and it sets the framework for my analysis. [ 8 ] Finally, on November 17, 2017, the Court granted an order governing a number of procedural matters during the period pending the appeal. The law firm representing the Plaintiffs was permitted to serve the statement of claim on eight TekSavvy subscribers but was otherwise prohibited from disclosing their names or addresses to anyone, including to the Plaintiffs.

In addition, the order requires these subscribers to preserve any documents or records relevant to the claim for copyright infringement. II. BACKGROUND [ 9 ] This case is about allegations of illegal downloading and sharing of movies. The SCC provided a succinct description of how this works in Rogers Communications : [1] Online infringement of copyright has become commonplace. Using peer to peer file sharing networks, Internet subscribers can download copyrighted content such as films and music, while simultaneously uploading that content for download by others who are thereby able to do the same.

Through this concurrent downloading and uploading, peer to peer networks facilitate the rapid sharing of copyrighted content with multiple Internet subscribers simultaneously. And, due to the anonymity of the Internet, the identity of Internet subscribers who participate in this illegal sharing of copyrighted content is concealed from copyright owners. [ 10 ] The Plaintiffs are movie production companies that own copyright in several films.

They are concerned about illegal distribution of their films, so they hired a company called Maverickeye UG (Maverickeye) to monitor the Internet for illegal sharing of their films. The Plaintiffs received a report from Maverickeye about suspected illegal downloads which included the date and time of the activity together with the Internet Protocol (IP) addresses associated with the downloads. These IP addresses were correlated to numbers that were held by several different Internet Service Providers (ISPs).

The IP addresses at issue here had been allocated to TekSavvy – each ISP is allocated a bank of IP addresses, and these are available for search, so it was possible for Maverickeye to link a particular IP address with a specific ISP. [ 11 ] It was not possible, however, for Maverickeye to link the particular IP address with the name of the individual customer. That information is held by the ISP and is not otherwise available for search by other parties.

Pursuant to the notice and notice regime established by the Copyright Modernization Act (described more fully below), the Plaintiffs sent notices to TekSavvy alleging that its customers infringed their copyright and providing the relevant information as to the date and time of the alleged illegal activity, as well as the associated IP address.

Under the regime, TekSavvy had to forward such notices to its subscribers, and to retain certain information about the subscribers and their activity. [ 12 ] The Plaintiffs then initiated copyright infringement actions against the unnamed individual defendants associated with the IP addresses in Maverickeye’s report.

In support of these actions, the Plaintiffs brought motions naming TekSavvy and other ISPs as non- party respondents, seeking Norwich orders – orders directing third parties to proceedings to disclose information in their possession, named after the case which recognized them in modern law: Norwich Pharmacal Co v Customs & Excise Commissioners (1973), [1974] AC 133 (UK HL) .

Such orders are provided for in Rule 238 of the Federal Courts Rules , SOR/98-106 [the Rules ] (see also Rule 233 regarding disclosure from third parties). [ 13 ] The motions sought to compel TekSavvy and the other ISPs to disclose the names and addresses of individual customers associated with various IP addresses at particular times. The Plaintiffs alleged that these individuals, identified as numbered " “John Doe” " defendants, engaged in illegal file sharing of their movies, thereby infringing their copyright.

The materials filed by the Plaintiffs identified hundreds of IP addresses, and were served on several ISPs. Eighteen of these IP addresses were associated with TekSavvy. [ 14 ] The motions were supported by affidavits sworn by law clerks employed by counsel for the Plaintiffs. Attached to these affidavits

were Solemn Declarations by Daniel Arheidt (the Arheidt Declaration), a consultant who works in Maverickeye’s technical department. He described how the Maverickeye software monitors peer-to-peer networks to identify acts of distribution of certain materials, in this case several movies subject to copyright. Mr. Arheidt describes how the proprietary software used by Maverickeye operates both to verify that the file sharing of the copyright material is being done, and to link that activity to a particular IP address.

This address is then linked to an ISP using publicly available data. [ 15 ] The Arheidt Declaration includes background information on how peer-to-peer file sharing works, with a particular emphasis on the BitTorrent protocol, a popular peer-to-peer " “file sharing” " protocol that enables the decentralized distribution of computer files over the Internet.

The Arheidt Declaration also includes a table showing the IP address for each numbered John Doe Defendant, as well as the dates and times of the first and second notices of alleged infringement that were sent to various ISPs. [ 16 ] The law clerks’ affidavits state that they " “repeat and rely on [Daniel Arheidt’s]… declaration” " and " “believe it to be true.” " They indicate that, pursuant to the notice and notice regime, it is the policy of the Plaintiffs to send a " “first notice” " to the subscriber which gives a one-week timeline for the individual to remove the copy of the copyrighted material from their computer.

The first notice provides that no action will be taken against the individual if the material is removed. [ 17 ] In accordance with the Plaintiffs’ practice, if the material has not been removed by the subscriber after at least a week, a second notice is sent. This notice declares that the Plaintiffs reserve their right to bring a copyright infringement proceeding against the subscriber, including a request to compel the ISP to disclose their identity.

The affidavits state that first and second notices were sent to the individual defendants, or that they " “should have had the notices forwarded to them” " by their ISP, in accordance with the Act . In response to the motions brought by the Plaintiffs for disclosure, TekSavvy filed material opposing the motions. The Plaintiffs also filed written material, and the matter was argued before the CMJ. [ 18 ] TekSavvy argued that the affidavits and attached Arheidt Declarations filed by the Plaintiffs were not sufficient to warrant the granting of a Norwich order.

TekSavvy also argued that the Plaintiffs had failed to make full and frank disclosure regarding their knowledge that many of TekSavvy’s subscribers had not received the first and second notices, contrary to the statements in their affidavits. It further argued that the Plaintiffs had failed to comply with their obligations to TekSavvy’s subscribers, because the Plaintiffs had not followed their one week " “grace period” " policy.

Finally, TekSavvy submitted that the amended motion seeking statutory damages for alleged breaches of its obligations under the Act should be dealt with in a separate proceeding, where it was a proper party before the Court, rather than – as here – a non-party respondent. It also argued that a claim for damages could not proceed by way of a motion. [ 19 ] The Plaintiffs contended that their evidence was sufficient to support the granting of the Norwich order, and that similar evidence had been accepted in prior cases.

They pointed out that TekSavvy was mistaken about certain of the alleged errors in disclosure – the material was, in fact, included in the motion material, but TekSavvy had missed it. Any remaining errors related to background or supporting information and were innocent mistakes which had been corrected by the time of the hearing. The Plaintiffs stated these omissions were not intended to mislead the Court.

Finally, they argued that the claim for statutory damages should be dealt with in this proceeding, because the alleged breaches of statutory obligations arose in the context of this matter and TekSavvy was an active participant in the proceeding before the Court. [ 20 ] The CMJ rejected TekSavvy’s arguments. He noted that the FCA set out comprehensive guidance on the objectives of the notice and notice regime in Voltage Pictures .

The Court in Voltage Pictures found that the purpose of the regime was to impose obligations on ISPs that require them to assist copyright owners who seek to vindicate their rights in the face of the type of anonymous infringement that the Internet has enabled. In particular, the regime seeks to ensure that copyright owners can identify alleged infringers quickly and efficiently. [ 21 ] In light of this guidance, the CMJ found that the evidence was sufficient to warrant the granting of the Norwich order.

The evidence submitted by the Plaintiffs was similar to the type of evidence that had been accepted in many other similar cases, and it was sufficient for the purposes of the disclosure order. Regarding the failure to make full and frank disclosure, the CMJ acknowledged that a few mistakes had been made. However, he noted that the Plaintiffs had responded in a forthright manner and had corrected the record by the time the matter was argued before him.

He also noted that TekSavvy had experienced some practical and technical challenges in providing the notices to its customers, and that it had apparently deleted some of the information in relation to some of its subscribers. [ 22 ] In the end, the CMJ found that almost all of the TekSavvy subscribers had received notice, and that TekSavvy itself had contributed to some of the confusion and delay in providing the notices.

He further found that the Plaintiffs had admitted certain errors in their materials, but these were " “errors of inadvertence” " which were promptly corrected, rather than any effort to mislead the Court. These errors related to backup documents that supported the main claim of copyright infringement and were not fatal to the claim. This was all part of the " “learning curve” " associated with implementing the new notice and notice regime.

The CMJ ordered that TekSavvy disclose the requested information to the Plaintiffs. [ 23 ] Concerning the Plaintiffs’ claim for statutory damages against TekSavvy for alleged breaches of its obligations under the Act , the CMJ again drew inspiration from the guidance provided by Voltage Pictures that the process is meant to be quick and efficient. He rejected TekSavvy’s argument that the claim must proceed by way of a new application or action to which it was a full party.

He found that requiring a separate process, " “with the full panoply of litigation steps including pleadings, production and discovery” " would defeat the purpose of the Act and was not necessary to ensure procedural fairness to TekSavvy. He noted that " “[t]he alleged violation[s] occurred in this proceeding and thus should be determined in this proceeding.” " [ 24 ] The CMJ found that " “[c]ommon sense and efficiency requires a more truncated procedure.

That can be accomplished by following, at least in this case, the type of procedure involved in contempt/show cause proceedings.” " He therefore directed the Plaintiffs to serve on TekSavvy all of the evidence they intended to rely upon in support of the alleged violations. This evidence was to be set out by way of affidavit. At the hearing, TekSavvy would be permitted to cross-examine the affiants, and to lead its own viva voce evidence which would be subject to cross-examination.

This would permit the Court to have a full evidentiary record, and for TekSavvy to raise any and all defences it wished to assert against the claim for damages.

III. ISSUES [ 25 ] There are four issues in this appeal: 1 . Did the CMJ err in dealing with the issue of full and frank disclosure? 2 . Did the CMJ err in finding that the evidence satisfied the requirements for a Norwich order? 3 . Did the CMJ err in respect of the procedure for pursuing statutory damages for an ISP’s alleged breach of its obligations under the Act ? 4 .

Did the CMJ err in making findings indicating a pre-judgment of the merits of the damages claim against TekSavvy? [ 26 ] The Plaintiffs submit that there are two preliminary or " “threshold” " issues that must be determined prior to dealing with the main issues: i . Does TekSavvy have standing to advance issues 1 and 2 above? ii . Is the appeal premature in respect of issues 3 and 4 above? [ 27 ] I will address these in relation to the issues to which they relate, rather than as separate threshold questions. IV.

ANALYSIS [ 28 ] This part will begin with a brief review of the appropriate standard of review, followed by an overview of the notice and notice regime and Norwich orders, before turning to the issues raised in the case. A. Standard of Review [ 29 ] The FCA ruled in Hospira Healthcare Corporation v Kennedy Institute of Rheumatology , 2016 FCA 215 [ Hospira ] that the standard of review of a discretionary decision of a Prothonotary is the usual appellate standard from Housen v Nikolaisen , 2002 SCC 33 .

Under this standard, absent an error on a question of law or an extricable legal principle, intervention is warranted only in cases of palpable and overriding error. [ 30 ] The FCA elaborated upon the meaning of " “palpable and overriding error” " in Mahjoub v Canada (Citizenship and Immigration) , 2017 FCA 157 , explaining that it is a " “highly deferential standard of review” " and that when " “arguing palpable and overriding error, it is not enough to pull at leaves and branches and leave the tree standing. The entire tree must fall” " (see also Benhaim v St-Germain , 2016 SCC 48 at para 38 ).

The FCA went on to explain that an error must be both obvious, and of sufficient importance that it affects the outcome of the case. It may be a single error, or the cumulative impact of a series of errors. [ 31 ] That is the standard that I will apply in this case. I am also guided by the admonition in Hospira (at para 103 ) that: [T]he case managing prothonotary is very familiar with the particular circumstances and issues of a case, and that, as a result, intervention should not come lightly. This does not mean, however, that errors, factual or legal, should go undetected.

In the end, “elbow room” is simply a term signaling that deference, absent a reviewable error, is owed, or appropriate, to a case managing prothonotary – no more, no less. B. The Notice and Notice Regime [ 32 ] In recent years, copyright protections in Canada, as with many areas of the law, were straining to keep up with developments in technology – a legal framework designed for another age was in need of reform.

One aspect of this challenge was the online, anonymous sharing of copyright material facilitated by the rise of the Internet, described in the passage from Rogers Communications quoted earlier. [ 33 ] To address this challenge, Parliament adopted the Copyright Modernization Act , which established the notice and notice regime through amendments to the Act . The Act now provides that a copyright owner may send a notice of claimed infringement to an ISP, and sets out the basic requirements for such a notice: " Form and content of notice " " Forme de l’avis " " 41.25

(2) A notice of claimed infringement shall be in writing in the form, if any, prescribed by regulation and shall " " 41.25 (2) " " L’avis de prétendue violation est établi par écrit, en la forme éventuellement prévue par règlement, et, en outre : " " (

a) state the claimant’s name and address and any other particulars prescribed by regulation that enable communication with the claimant; " " a) " " précise les nom et adresse du demandeur et contient tout autre renseignement prévu par règlement qui permet la communication avec lui; " " (

b) identify the work or other subject-matter to which the claimed infringement relates; " " b) " " identifie l’œuvre ou l’autre objet du droit d’auteur auquel la prétendue violation se rapporte; " " (

c) state the claimant’s interest or right with respect to the copyright in the work or other subject-matter; " " c) " " déclare les intérêts ou droits du demandeur à l’égard de l’œuvre ou de l’autre objet visé; "

" (

d) specify the location data for the electronic location to which the claimed infringement relates; " " d) " " précise les données de localisation de l’emplacement électronique qui fait l’objet de la prétendue violation; " " (

e) specify the infringement that is claimed; " " e) " " précise la prétendue violation; " " (

f) specify the date and time of the commission of the claimed infringement; and " " f) " " précise la date et l’heure de la commission de la prétendue violation; " " (

g) contain any other information that may be prescribed by regulation. " " g) " " contient, le cas échéant, tout autre renseignement prévu par règlement. " [ 34 ] The Act then sets out the obligations on the ISP upon receipt of such a notice: " Obligations related to notice " " Obligations " " 41.26

(1) A person described in paragraph 41.25(1) (

a) or (

b) who receives a notice of claimed infringement that complies with subsection 41.25(2) shall, on being paid any fee that the person has lawfully charged for doing so, " " 41.26 (1) " " La personne visée aux alinéas 41.25(1)

a) ou

b) qui reçoit un avis conforme au paragraphe 41.25(2) a l’obligation d’accomplir les actes ci-après, moyennant paiement des droits qu’elle peut exiger : " " (

a) as soon as feasible forward the notice electronically to the person to whom the electronic location identified by the location data specified in the notice belongs and inform the claimant of its forwarding or, if applicable, of the reason why it was not possible to forward it; and " " a) " " transmettre dès que possible par voie électronique une copie de l’avis à la personne à qui appartient l’emplacement électronique identifié par les données de localisation qui sont précisées dans l’avis et informer dès que possible le demandeur de cette transmission ou, le cas échéant, des raisons pour lesquelles elle n’a pas pu l’effectuer; " " (

b) retain records that will allow the identity of the person to whom the electronic location belongs to be determined, and do so for six months beginning on the day on which the notice of claimed infringement is received or, if the claimant commences proceedings relating to the claimed infringement and so notifies the person before the end of those six months, for one year after the day on which the person receives the notice of claimed infringement.

" " b) " " conserver, pour une période de six mois à compter de la date de réception de l’avis de prétendue violation, un registre permettant d’identifier la personne à qui appartient l’emplacement électronique et, dans le cas où, avant la fin de cette période, une procédure est engagée par le titulaire du droit d’auteur à l’égard de la prétendue violation et qu’elle en a reçu avis, conserver le registre pour une période d’un an suivant la date de la réception de l’avis de prétendue violation.

" [ 35 ] Finally, the Act provides at subsection 41.26(3) that " “[a] claimant’s only remedy against a person who fails to perform his or her obligations under subsection (1) is statutory damages in an amount that the court considers just, but not less than $5,000 and not more than $10,000.” " [ 36 ] The notice and notice regime enables a copyright owner who has reason to believe that an ISP’s customers are breaching its copyright to send a notice to the ISP, and this in turn obligates the ISP to forward that notice to its customer(s), and to maintain certain records regarding the matter.

The notice is meant to serve as a warning, to allow the customer to take steps to cease the allegedly infringing activity ( Rogers Communications at para 23 ). The notice can also serve as a precursor to the launch of a claim for copyright infringement. In this regime, the ISP is viewed as merely a conduit between the copyright owner and the subscriber – it is not, itself, liable for the infringement.

However, an ISP that fails to fulfil its obligations under the Act may be subject to statutory damages. [ 37 ] The objectives of the statutory reform are discussed at length in Rogers Communications , which finds that the notice and notice regime serves " “two complementary purposes: (1) to deter online copyright infringement; and (2) to balance the rights of interested parties” " (at para 22). [ 38 ] The SCC found that " “by requiring notice of a claimed infringement to be forwarded to the person who was associated with the IP address that is alleged to have infringed copyright, the regime is aimed at deterring that person, or others who are using the IP address, from continuing to infringe copyright (see Canada, Office of Consumer Affairs, Notice and Notice Regime (online))” " ( Rogers Communications at para 23 ). [ 39 ] In relation to the second objective, the SCC finds that the regime sought to balance " “not only… the rights of copyright owners and Internet users who may infringe those rights, but also the interests of Internet intermediaries such as ISPs…” " ( Rogers Communications at para 25 ). [ 40 ] The decision finds that Parliament intended the notice and notice regime to serve as a deterrent, with the backstop of the Courts and the opportunity for copyright owners to pursue their rights by seeking to obtain a Norwich order, if the notice to the subscriber did not halt the allegedly unlawful activity: [24] The notice and notice regime was not, however, intended to embody a comprehensive framework by which instances of online copyright infringement could be eliminated altogether.

As a representative of Rogers explained before the House of Commons committee considering what would become the Copyright Modernization Act , “notice and notice is not a silver bullet; it’s just the first step in a process by which rights holders can go after those they allege are infringing. . . . Then the rights holder can use that when they decide to take that alleged infringer to court” (House of Commons, Legislative Committee on Bill C-32, Evidence , No. 19, 3rd Sess., 40th Parl., March 22, 2011, at p. 10).

This is why, as I have explained, a copyright owner who wishes to sue a person alleged to have infringed copyright online must obtain a Norwich order to compel the ISP to disclose that person’s identity. The statutory notice and notice regime has not displaced this requirement,

but operates in tandem with it. This is affirmed by s. 41.26(1)(b), which contemplates that a copyright owner may sue aperson who receives notice under the regime, and fixes the ISP’s obligation to retain records which allow that person’sidentity to be determined for a period of time after such notice is received. [41] In view of the SCC’s finding that the notice and notice regime did not displace the requirement to obtain a Norwich order to compeldisclosure, "“but operates in tandem with it”" (Rogers Communications at para 24), it is necessary to set out a brief

summary of the priorjurisprudence on Norwich orders, which will set the stage for my analysis of the issues. C. The Law on Norwich Orders [42] A Norwich order is extraordinary equitable relief; it is derived from the equitable bill of discovery and is a means of obtainingnecessary information from a third party.

Cases are generally brought ex parte, and so the applicant is under a duty to make full andfrank disclosure of all relevant information (United States of America v Friedland, [1996] OJ No 4399 (QL) (ON Ct J (Gen Div))[Friedland]; Canada (National Revenue) v Cormark Securities Inc, 2011 FC 1472). [43] This type of order has been employed in cases involving alleged online copyright infringement prior to the enactment of the noticeand notice regime.

The test to obtain such an order in this Court was set out in BMG Canada Inc v Doe, 2005 FCA 193 [BMG]: The applicant must establish a bona fide claim against the unknown wrongdoer; The person against whom the disclosure order is sought must be in some way involved in the matter under dispute – they must bemore than a mere witness; The person must be the only practical source of the information; The person must be compensated for reasonable expenses incurred in complying with the order; and The public interest in favour of disclosure must outweigh the legitimate privacy interests. [44] The test has been stated by other courts, with minor differences: see, for example: Leahy v B (A), 113 NSR (2d) 417, (SC (TD)); GEA Group AG v Ventra Group Co (2009), 2009 ONCA 619 , 96 OR (3d) 481 (CA) [GEA Group]; 1654776Ontario Limited v Stewart, 2013 ONCA 184, leave to appeal to SCC denied (case no 35394).

The BMG test was cited with approval inRogers Communications. [45] The BMG decision confirms that this remedy is available in the Federal Court, pursuant to subsection 238(1) of the Rules, whichgoverns examination of non-parties (see also Rule 233 regarding production of documents from non-parties, discussed in HospiraHealthcare Corporation v Kennedy Institute of Rheamatology [sic], 2018 FC 992 at paras 17-20). BMG involved a case similar to thisone – a copyright owner claimed to have evidence of unlawful downloading of its songs, but it could not identify the individualoffending subscribers.

So, it went to court to seek a Norwich order forcing the ISPs to turn over the names. [46] The FCA confirmed that a Norwich order is available but found that the evidence provided by the copyright owner was notsufficient to merit the granting of the order. The Court found that the unnamed subscribers had important privacy interests that had to berespected. This is discussed in more detail below. [47] Norwich orders have been granted in a wide variety of circumstances and courts have emphasized the importance of maintaining theflexibility inherent in equitable relief, while guarding against potential abuse.

The point is expressed in the following way in GEA Groupat para 85: "“The important point is that a Norwich order is an equitable, discretionary and flexible remedy. It is also an intrusive andextraordinary remedy that must be exercised with caution.”" [48] An illustration of the potential for misuse of Norwich orders in this type of case – namely, the rise of the "“copyright troll”" – hasbeen described in some detail in another decision by Prothonotary Aalto, Voltage Pictures LLC v John Doe, 2014 FC 161 [VoltagePictures (2015)]. This has been a particular concern in the United Kingdom and the United States.

The phenomenon is described in thefollowing passage: [103] As in the UK, Courts in the U.S. appear to accept that identifying alleged infringers for purposes of pursuingcopyright infringement claims is merited, but the Courts have expressed concern with the use of the courts’ subpoenapowers to “troll” for quick and easy settlements. [104] U.S. courts have not shied away from using strong language to admonish the “low-cost, low-risk revenue model”tactics of copyright owners, and in particular adult film companies: “It has become clear in many cases that the companieshave no intention of pursuing litigation, but rather initiate a lawsuit to hold a proverbial guillotine over the accuseddownloaders’ heads to extract settlement because of the fear of embarrassment over being accused of downloadingpornography” (see, for example, Patrick Collins, Inc., v John Doe 1, 2012 US Dist LEXIS 71122 (ED NY, 2013) at p. 5). [49] In Voltage Pictures (2015), Prothonotary Aalto established a non-exhaustive list of considerations for the granting of a Norwichorder in order to prevent any such abuse.

These included putting safeguards in place to avoid intimidation of the recipient of the order,limiting the information that would be provided pursuant to the order, and requiring court approval of any proposed demand letter priorto the correspondence being sent. [50] These considerations are meant to ensure that valid efforts to enforce copyright are not stymied, but also that the integrity of thecourt process is not impaired by abusive conduct, and most importantly, that individuals are not subject to inappropriate pressures.

Ishould note here that there is no allegation of inappropriate behaviour by the Plaintiffs in the case before me.

[ 51 ] As the SCC noted in Rogers Communications at para 45 : " “Parliament knew that the regime was only a first step in deterring online copyright infringement, and that a copyright owner who wished to sue an alleged infringer would still be required to obtain a Norwich order to identify that person.” " It is therefore necessary to consider whether the rules established by Norwich order jurisprudence which pre-date the Copyright Modernization Act amendments need to be amended or refined to take into account the new legislative framework. That will be done in the following sections. D. The Four Issues

(1) Did the CMJ err in dealing with the issue of full and frank disclosure? [ 52 ] Did the CMJ err in issuing the order, despite the finding that there had been mistakes and omissions in the material originally filed in support of the motion for the Norwich order? [ 53 ] I will deal first with the Plaintiffs’ argument that TekSavvy does not have standing to advance this argument before considering the merits.

To understand the issue, it is necessary to provide more detail regarding the alleged failure to make full disclosure. [ 54 ] In their affidavits in support of the Norwich order, the Plaintiffs asserted that " “[t]he Defendants in this action were all sent first and second notices, as set out herein at Exhibit “C” for each unknown Defendant.” " The affidavits also state: " “[i]t is my understanding that each of these Defendants [the numbered, unnamed “John Doe” defendants] have [ sic ] had these first and second notices sent to them by their ISP at or about the date of the sending of these notices.” " In a subsequent affidavit, this was modified to state that the Defendants " “had, or should have had” " the notices sent to them.

The affidavits further state: " “[a]ttached hereto… are all the communications from the Non-Party Respondents [the ISPs] indicating that the notices were forwarded.” " [ 55 ] TekSavvy points to e-mail exchanges with the law firm representing the Plaintiffs that pre-date the swearing of these affidavits.

These exchanges make clear that due to a variety of technical and practical issues, some of TekSavvy’s subscribers received the second notice before they were sent the first notice, while a few had not been sent notices at all because their IP addresses could not be correlated to the information provided by the Plaintiffs or that information was no longer available. The CMJ found that in regard to four subscribers, the Plaintiffs had not received confirmation from TekSavvy that it had sent any notice.

TekSavvy claims that this information contradicted the categorical statements in the sworn affidavits and that this information was in the possession of the Plaintiffs but not disclosed to the Court. It further states that some of its e-mail correspondence was not included, which contradicted the statements in the affidavits. [ 56 ] The Plaintiffs replied that some of the information was, in fact, disclosed to TekSavvy and the Court, but admitted that some of the background information regarding its exchanges with TekSavvy had not been included in the original material.

They filed supplementary material prior to the hearing before the CMJ, which included clarification of the record as well as further information about the timing of the notices and its exchanges with TekSavvy. [ 57 ] In essence, the Plaintiffs argued that some of the difficulties regarding the timing of the notices were due to TekSavvy’s failings, and that the errors were simply due to inadvertence in dealing with a large volume of information about hundreds of subscribers and several ISPs.

There was no intention to mislead the Court, and with the filing of the supplementary material the CMJ was not, in fact, lacking any relevant information at the time of the hearing. The Plaintiffs also contended that the missing documents were simply background material, which did not affect the substance of their claim. (

a) Does TekSavvy have standing to advance this argument? [ 58 ] The Plaintiffs argued that TekSavvy’s allegations relating to the failure to make full and frank disclosure rest on an estoppel argument. They say that the alleged disclosure failure related to " “background information” " regarding the e-mail exchanges between TekSavvy and the law firm for the Plaintiffs about the delays and difficulties in forwarding the notices to subscribers.

Since TekSavvy cannot claim that it relied to its detriment on the Plaintiffs’ policy of a one-week grace period, it does not have an interest in the matter, and it therefore lacks standing to advance this argument. [ 59 ] TekSavvy denies that it is relying on an estoppel argument. It takes no position as to the merits of the underlying copyright infringement action.

It does assert, however, that it has a role in reviewing the evidence put forward in support of the Norwich motion to assist the Court in determining whether the criteria have been met, and thereby ensuring the proper balance between its subscribers’ important privacy interests and the interests of copyright owners in pursuing infringement claims. [ 60 ] I reject the Plaintiffs’ argument that TekSavvy lacks standing to advance this claim. The duty to make full and frank disclosure is owed to the Court, not to any party (see the discussion of the issue by Justice Sharpe in Friedland at paras 26-29).

In the circumstances of this case, TekSavvy is in possession of information which is relevant to whether the Plaintiffs met their obligation to the Court. Nothing more is required. (

b) Did the Plaintiffs fail to make full and frank disclosure? [ 61 ] As noted earlier, the CMJ found that the Plaintiffs had no intention to mislead the Court, and any lapses in their disclosure related to background information which was not provided due to inadvertence. He attributed it more to " “growing pains” " associated with adjusting to the requirements of the notice and notice regime. [ 62 ] The duty of full and frank disclosure has been found to apply to Norwich order motions, since such proceedings are generally conducted on an ex parte basis.

The rationale for the obligation rests largely upon the idea that in an ex parte proceeding the party before the Court has to disclose all relevant information – whether in favour or against its position – in order to enable the judge hearing the matter to act properly and judicially: Canada (National Revenue) v RBC Life Insurance Company , 2013 FCA 50 at para 31 ; Friedland at paras 26-27.

[ 63 ] The failure to meet this duty does not require any intention to mislead the Court, although the intentional withholding of relevant information – and, in particular, information which would tend to be adverse to the applicant’s position – is of particular concern to the Court: see, for example MacLachlan v Nadeau , 2017 BCCA 326 [ MacLachlan ]. [ 64 ] However, the cases make clear that the judge hearing the matter has discretion in the face of a non-disclosure – it does not automatically result in a dismissal of the ex parte proceeding.

Among the relevant considerations in exercise of this discretion, courts have found that the nature of the failure and the degree and extent of the applicant’s culpability, are highly material factors: see MacLachlan at para 37 ; Marciano (Séquestre de) , 2012 QCCA 1881 at para 56 , leave to appeal to SCC denied (case no 35142). [ 65 ] In this case, TekSavvy argues that the Plaintiffs made material misstatements regarding the notices that its subscribers had received, and in relation to whether all of the relevant e-mail correspondence regarding these notices had been included in the evidence.

The Plaintiffs reply that some of the information was, in fact, included in their materials, and that other background information was omitted due to an innocent error. They point out that they corrected this error with a supplementary affidavit prior to the hearing of the matter before the CMJ.

They also state that certain difficulties in organizing and presenting the material related to a failure by TekSavvy to fulfil its obligations under the notice and notice regime to forward the notices " “as soon as feasible.” " [ 66 ] I find that the CMJ did not commit a palpable and overriding error in his treatment of this issue. He found that the Plaintiffs addressed the disclosure mistakes in a forthright manner and that the lapses related to the correspondence between the parties and background information regarding whether and when notices were sent.

None of the misstatements related to the core underlying issue of whether there had been a copyright infringement. The CMJ noted that the Plaintiffs admitted their mistakes and took prompt steps to correct the record.

All of these findings are amply supported by the record. [ 67 ] TekSavvy argues that the CMJ made an error in law when he stated that " “the issues to be determined are whether the Plaintiff has failed to provide full and frank disclosure and thereby misled the Court.” " They submit that this is incorrect as a matter of law – there is no requirement of any intention to " “mislead the Court.” " [ 68 ] The statement of the issue by the CMJ is not a legal error.

He understood and applied the correct legal test, but he also expressed the underlying rationale for that test – namely, to avoid misleading the Court, so that it can act judicially in considering the matter before it, with a full understanding of the surrounding circumstances and the strengths and weaknesses of the moving parties’ case. There is simply no indication in the decision that the CMJ treated the " “intention to mislead the Court” " as a separate element of the test. [ 69 ] Full and frank disclosure is vital in ex parte proceedings, for the reasons outlined previously.

However, it should be noted that under the notice and notice regime, an application for a Norwich order may not always be truly ex parte , in the sense that there is no other party with notice of the matter. It is ex parte in relation to the individual subscribers whose privacy interests are at stake. However, in the normal course the copyright owner seeking the order will have complied with the notice and notice regime, and so it will have provided a notice to the ISP which specifies the details of the alleged infringement, including the date, time and IP address associated with the activity.

The ISP would presumably first confirm that this IP address relates to one of its subscribers and would then forward the notice to that subscriber. [ 70 ] Only after that is done would the application for the Norwich order be sought, and it should normally be served – as was done here – on the ISP. If an error has occurred in identifying the correct IP address or in relation to the download, the ISP and the subscriber would have had an opportunity to communicate this to the copyright owner.

The ISP would also have the opportunity to raise any of these issues before the Court on the motion for disclosure, as TekSavvy has done here. [ 71 ] I make no comment on the situation that may arise where a copyright owner seeking a Norwich order does not comply with the notice and notice regime prior to seeking the order. I leave the question of whether any such order could ever be granted for another day. [ 72 ] In this way, the usual steps in obtaining a Norwich order may be modified by the notice and notice regime.

Although the individual subscriber would not generally be given notice of the Norwich order application, the matter would normally be brought only after the ISP has been given notice of the alleged infringing activity, and in turn the ISP will have sent that notice to the subscriber. In addition, the ISP should be provided with notice of the application for the Norwich order.

And so, the standards that are normally applied for truly ex parte proceedings should be adapted to reflect this reality. [ 73 ] I will say more on this issue later, but at this stage I would simply note that it is incumbent on an applicant seeking a Norwich order to ensure that it has disclosed all relevant information to the Court, and that its material is organized in a manner which can be easily understood and verified.

While I accept Prothonotary Aalto’s finding that the errors here reflect the growing pains associated with implementing a new regime, I note that all of the parties have now had several years to adjust. Materials from copyright owners seeking Norwich orders should now be organized and complete. The Court, the subscribers whose privacy interests are affected by such extraordinary orders, and the ISPs to whom the order will be directed, deserve no less.

(2) Did the CMJ err in finding that the evidence satisfied the requirements for a Norwich order? [ 74 ] The issue here is whether the evidence submitted by the Plaintiffs in support of their motion was sufficient to obtain a Norwich order. TekSavvy advances three arguments: (

i) the evidence is improper hearsay that does not comply with the Rules or the binding jurisprudence; (ii) the affidavits do not comply with the requirements of Rule 81(2) because they do not set out the basis for the deponents’ belief in their truth; and (iii), the Arheidt Declaration is expert evidence which was also not in compliance with the requirements set out in the Rules . [ 75 ] The Plaintiffs dispute this characterization of the evidence and argue that similar evidence has been accepted in previous motions for similar orders under the notice and notice regime.

They say their approach to the evidence is consistent with the direction of the FCA in the Voltage Pictures decision, confirmed by the SCC in Rogers Communications , that these proceedings are to be quick and efficient, and based on standardized materials.

[ 76 ] As noted previously, the evidence in support of the motions for Norwich orders consisted of affidavits of law clerks who worked for the law firm that represents the Plaintiffs.

These affidavits provide some background information on the claims and the process followed regarding the giving of notice. [ 77 ] The substance of the evidence required for the Norwich order – namely the evidence that downloading has occurred, the date and time of such activity, the IP address connected to it, and the details regarding the notices sent to the ISP – are all contained in an exhibit attached to the affidavit, i.e. the Arheidt Declaration.

That declaration contains the substantive information as well as the explanation of how the computer monitoring is done and the steps taken to verify that the downloading activity is linked to the particular IP address. The affiants simply state: " “I repeat and rely on this declaration, and I believe it to be true.” " They also indicate that the Arheidt Declaration " “contains the technical details in respect of this action.” " [ 78 ] Once again, I will address the standing issue before considering the merits of the argument. (

a) Does TekSavvy have standing to advance this argument? [ 79 ] The Plaintiffs submit that the CMJ ruled that TekSavvy did not have standing to advance this argument, and since it has not appealed that aspect of the ruling, it should not be allowed to advance these arguments on appeal. They link the arguments about the evidence and the full and frank disclosure, and say both rest on a foundation of estoppel.

The Plaintiffs describe the estoppel argument as follows: they submit that TekSavvy is essentially asserting that since the Plaintiffs did not follow their policy of sending two notices to the subscriber with a one week " “grace period” " in between, it would be unfair and inequitable to allow them to obtain a Norwich order. [ 80 ] Regarding the sufficiency of evidence argument, the Plaintiffs argue that while this may be an argument which the individuals alleged to have infringed copyright can raise at the copyright infringement hearing, it is not available to TekSavvy at this stage, since TekSavvy is merely a conduit for the information and it is insulated from any liability for copyright infringement.

The Plaintiffs also point out that TekSavvy did not take any steps to test or challenge the evidence; it failed to cross-examine on the affidavits and therefore, it cannot now raise concerns about the nature and sufficiency of the evidence. [ 81 ] This argument rests on the following passage from the Prothonotary’s Order (p 16): … Arguments relating to the inadmissibility of the evidence of the technician via a clerk’s affidavit are also not persuasive.

TekSavvy is not prejudiced by the evidence and the Court has accepted this evidence in support as have other ISP’s who have provided the names and addresses of alleged infringers. The purposive approach to the legislation is required as noted by Justice Stratas in Voltage . I find that the arguments of the Plaintiff [ME2] in the circumstances of this case to be persuasive on the issues of standing, issue estoppel and admissibility. The evidence is sufficient to support a Norwich type order. [ 82 ] The decision does not contain an analysis of the law on standing.

The CMJ appears to have reached this conclusion on the basis that TekSavvy is not in a position to raise these issues, because they do not concern its interests. The CMJ stated that " “TekSavvy is not prejudiced by the evidence” " and that the " “alleged infringers will have a full opportunity to defend themselves.” " [ 83 ] The law on standing simply requires that the party before the Court have some sort of direct and meaningful interest in the matter: see the discussion in Sauvé v Canada (Attorney General) , 2016 FC 401 at paras 93-97 .

The " “public interest” " aspect of the law on standing does not arise on these facts and it is not necessary to say more on that branch of the test. [ 84 ] Here, TekSavvy is before the Court as a non-party respondent. It takes no position on the merits of the application but asserts that it has a role to test the evidence and ensure that proper procedures are followed. [ 85 ] In analyzing this question, I begin by recalling that the Plaintiffs have come to the Court to seek a Norwich order, which is an exercise of an extraordinary equitable jurisdiction.

TekSavvy is before the Court as the third-party holder of the relevant information, to whom the order will be directed. [ 86 ] In light of the jurisprudence, I find that TekSavvy has standing to raise this issue. In BMG the FCA considered similar issues which were raised by ISPs in response to a request for a Norwich order. The substance of the decision will be discussed below; at this stage it is sufficient to note that the FCA accepted the arguments advanced by the ISPs, on behalf of their subscribers.

A major focus of that decision is how to balance the interests of copyright owners with the privacy interests of individual subscribers, but these individuals had not yet been identified.

The Court ruled on the question based on the submissions of the ISPs as well as those of the intervener, the Canadian Internet Policy and Public Interest Clinic. [ 87 ] In Rogers Communications the SCC goes further, noting that one of the main purposes of the notice and notice regime is to balance the interests of all stakeholders in the copyright regime, including copyright owners, Internet users, and intermediaries such as ISPs.

The Court finds that the notice and notice regime was designed, in part, to account for the interests of Internet subscribers " “by maintaining the presumption of innocence and allowing them to monitor their own behaviour (and, more specifically, to avoid continued copyright infringement)” " (para 26).

It also finds that the deterrence objective of the regime is advanced by giving the subscriber the opportunity to cease the infringing activity, and thereby possibly avoid a claim for copyright infringement. [ 88 ] If these two regimes are to operate " “in tandem,” " it only makes sense that a court must consider the privacy rights of individual subscribers in deciding whether to grant a Norwich order.

While it is true that such individuals will have every right to defend their interests if their identities are disclosed and they are subject to a claim of copyright infringement, I find that their interests are not limited to that stage of the proceeding. This is the teaching of BMG , and it is consistent with the objectives of the notice and notice regime as found by the SCC in Rogers Communications . [ 89 ] I find that TekSavvy has both legal and commercial interests that warrant granting it standing in this matter. TekSavvy is in possession of the personal information of its customers.

It has a legal obligation to protect such information and an obvious commercial

interest in doing so. It is anything but a "“busybody”" or idle bystander seeking to initiate or prolong litigation. TekSavvy’s participationin this matter reflects its legal and commercial interests. It is also in possession of practical information relevant to the consideration ofthe issues in this case, information which can be of assistance to the Court.

While it is entirely the choice of an ISP whether or not toparticipate in such applications, consistent with BMG and Rogers Communications, I find that where the ISP chooses to become an activeparticipant, it should not be barred at the courthouse door. [90] For these reasons, I find that TekSavvy has an interest, and therefore has standing to advance these arguments.

This relates to acentral issue before the Court in this case and the Court will benefit from the submissions of the ISP, as well as any other intervener orparty that may be granted a role in a future case. [91] This leads to the substance of the argument on this question. (

b) Did the CMJ err in finding that the evidence satisfied the requirements of a Norwich order? [92] TekSavvy argues that the evidence is inadmissible for three reasons: (

i) the key evidence from Mr.

Arheidt linking the allegeddownloading to individual IP addresses and providing details about the notices sent to the ISPs is inadmissible hearsay; (ii) there is noinformation as to the basis for the deponents’ belief that this information is accurate, and so the affidavits do not comply with Rule 81(2);and (iii) the Arheidt Declaration is "“expert opinion evidence”" which does not comply with Rule 51.2 regarding expert evidence. [93] The Plaintiffs reply that this evidence should be sufficient despite the fact that it isn’t commissioned because the ArheidtDeclaration is signed and solemnly declared by Mr.

Arheidt. They say it is equivalent to an un-commissioned sworn statement.Furthermore, they note that TekSavvy did not seek to cross-examine on the affidavits, and so should not be permitted to challenge theevidence.

Finally, they argue that this type of evidence has been accepted as sufficient by a large number of other ISPs, and this Court, ina number of other cases. [94] I would observe that the same counsel at the law firm representing the Plaintiffs here acted for the other copyright owners in theseother cases, and the evidence was essentially identical to that in evidence here – it appears that the only thing changed was the names ofthe parties, and the dates and times of the alleged infringements.

The essence of the affidavits, to which the Arheidt Declaration isattached as an exhibit, appears to be identical in these other cases. I would further observe that, as TekSavvy has pointed out, it appearsthat Mr. Arheidt has sworn an affidavit in an earlier case: see Voltage Pictures LLC v Jane Doe, 2011 FC 1024 at paras 7 and 9. [95] At the outset, it is worth remembering that the initial threshold for an applicant to obtain a Norwich order is not a high bar. All thatis required is to demonstrate that there is a bona fide case. Here, if the evidence of Mr.

Arheidt is accepted the Plaintiffs would meet thistest since they have produced evidence linking the downloading and sharing of movies in which they have copyright to a number of IPaddresses for subscribers of TekSavvy. The evidence also shows that the ISP received two notices about this, in accordance with thePlaintiffs’ policy and practice. As the CMJ noted in his decision, TekSavvy has not taken issue with the substance of much of thisevidence.

Rather, their attack is on more technical grounds. [96] The basic rules governing affidavit evidence in this Court are set out in Rule 81: "Content of affidavits " "Contenu ""81

(1) Affidavits shall be confined to factswithin the deponent’s personal knowledgeexcept on motions, other than motions forsummary judgment or

summary trial, in whichstatements as to the deponent’s belief, with thegrounds for it, may be included. " "81 (1)"" Les affidavits se limitent aux faits dont ledéclarant a une connaissance personnelle, sauf s’ilssont présentés à l’appui d’une requête – autrequ’une requête en jugement

sommaire ou en procèssommaire – auquel cas ils peuvent contenir desdéclarations fondées sur ce que le déclarant croitêtre les faits, avec motifs à l’appui. ""Affidavits on belief " "Poids de l’affidavit ""

(2) Where an affidavit is made on belief, anadverse inference may be drawn from the failureof a party to provide evidence of persons havingpersonal knowledge of material facts. " "(2)"" Lorsqu’un affidavit contient des déclarationsfondées sur ce que croit le déclarant, le fait de nepas offrir le témoignage de personnes ayant uneconnaissance personnelle des faits substantiels peutdonner lieu à des conclusions défavorables.

" [97] The Court has rejected efforts to file affidavits which attach as exhibits substantive evidence from another person, largely on thebasis that this would shield that evidence from cross-examination: see Parshottam v Canada (Citizenship and Immigration), 2008 FC 51,aff’d 2008 FCA 355.

In a case where a party filed an affidavit as an exhibit to another affidavit, the Court ruled that the attachment wouldhave very little weight where the deponent of the first affidavit was not produced for cross-examination: 594872 Ontario Inc v Canada(1992), (FC), 55 FTR 215, [1992] FCJ No 253 (QL) (TD) at para 14. [98] Furthermore, there is ample jurisprudence from this Court stating that, while there is no absolute rule against members of a law firmacting for one of the parties swearing an affidavit, this is not a good practice (see, for example, Cross-Canada Auto Body Supply(Windsor) Ltd v Hyundai Auto Canada, 2006 FCA 133).

This is particularly the case where the affidavits refer to contentious issuesgoing to the substance of the dispute: Bell Helicopter Textron Canada Limitée v Eurocopter, 2013 FCA 261. [99] Prior to the enactment of the notice and notice regime, the leading authority on the evidentiary standards to be applied in this sort ofcase is the decision of the FCA in BMG.

The FCA described the evidence filed by the copyright owners seeking the Norwich order in thefollowing manner: [11] On the motion, the plaintiffs filed affidavits of Gary Millin, President of MediaSentry Inc. (MediaSentry), a companythat provides online anti-piracy protection by specializing in automated detection of the unauthorized distribution ofcopyrighted materials on the Internet. The plaintiffs had retained MediaSentry to investigate file-sharing of the Songs.

[12] The affidavits explained that the plaintiffs provided a list of the Songs to MediaSentry. MediaSentry through its computer program then searched the Internet and identified 29 IP addresses as addresses from which large numbers of sound recordings, including the Songs, were being offered for copying. Screenshots were saved showing the numerous files being offered at these IP addresses. Copies of the files were then requested and received from these IP addresses. MediaSentry’s program also matched each of the 29 IP addresses to the specific ISP who administered each IP address at the relevant time.

MediaSentry provided the files it received to a representative of the plaintiffs who confirmed that the contents of these files corresponded with the Songs. [ 100 ] The Motions judge rejected this evidence because it failed to comply with Rule 81. The FCA upheld the Motions judge on this finding: [21] Much of the crucial evidence submitted by the plaintiffs was hearsay and no grounds are provided for accepting that hearsay evidence.

In particular, the evidence purporting to connect the pseudonyms with the IP addresses was hearsay thus creating the risk that innocent persons might have their privacy invaded and also be named as defendants where it is not warranted. Without this evidence there is no basis upon which the motion can be granted and for this reason alone the appeal should be dismissed. [Emphasis added.] [ 101 ] The FCA went on to consider other aspects of the Rules governing the granting of Norwich orders in these types of cases because the reasons of the Motions judge went beyond the hearsay evidence issue.

In its decision, the Court repeatedly emphasized the need to consider the privacy interests of the subscribers.

It agreed with the Motions judge that " “the public interest in disclosure must outweigh the legitimate privacy concerns of the person sought to be identified if a disclosure order is made” " (para 36) but added the following important caution, at paragraphs 39-42: [39] The delicate balance between privacy interests and public interest has always been a concern of the court where confidential information is sought to be revealed… [40] … Copyright law provides incentives for innovators - artists, musicians, inventors, writers, performers and marketers - to create.

It is designed to ensure that ideas are expressed and developed instead of remaining dormant. Individuals need to be encouraged to develop their own talents and personal expression of artistic ideas, including music. If they are robbed of the fruits of their efforts, their incentive to express their ideas in tangible form is diminished. [41] Modern technology such as the Internet has provided extraordinary benefits for society, which include faster and more efficient means of communication to wider audiences.

This technology must not be allowed to obliterate those personal property rights which society has deemed important. Although privacy concerns must also be considered, it seems to me that they must yield to public concerns for the protection of intellectual property rights in situations where infringement threatens to erode those rights. [42] Thus, in my view, in cases where plaintiffs show that they have a bona fide claim that unknown persons are infringing their copyright, they have a right to have the identity revealed for the purpose of bringing action.

However, caution must be exercised by the courts in ordering such disclosure, to make sure that privacy rights are invaded in the most minimal way. [ 102 ] The Plaintiffs contend that this is precisely what they were doing – following a standardized approach to proof at this stage of the process, an approach which they have used in many other cases where the Court granted similar orders. In order to achieve the deterrence effect that Parliament sought, the type of evidence submitted in this case should be accepted.

The Plaintiffs submit that the amendments to the Act , as interpreted in Rogers Communications , have overtaken the strict approach to the evidentiary basis set out in BMG . [ 103 ] This is a case of first impression: there is no binding authority directly on point nor any decisions of this Court, so I must step back and assess it from first principles, guided by the decision in Rogers Communications . [ 104 ] The starting point for my analysis is that the notice and notice regime did not displace the requirement to obtain a Norwich order.

As the SCC declared, the two must now operate " “in tandem.” " Disclosure of the names and other information of subscribers who are alleged to have infringed copyright is under the control of the courts through the granting – or refusal – of Norwich orders. So what does this mean in relation to the type of evidence that should be required? [ 105 ] As I have noted earlier, the initial threshold to obtain a Norwich order is not generally a high bar – all that is required is to demonstrate that the applicant has a bona fide case ( BMG ; Rogers Communications ).

On the other hand, it has long been recognized that a Norwich order is extraordinary equitable relief and courts must exercise a degree of caution in granting such orders ( GEA Group ). [ 106 ] In a case such as this, consistent with the decision in Rogers Communications , this must involve a consideration of the interests of copyright owners in quick and effective enforcement of their rights.

It must also involve a consideration of the privacy interests of individual subscribers whose names are subject to disclosure – and who may thereby be exposed to the challenges, costs and inconvenience of defending a claim of copyright infringement, together with the potential public exposure and embarrassment such an action may bring. [ 107 ] In this regard it is worth remembering that the SCC contrasted the notice and notice regime – which it found maintained the " “presumption of innocence” " of Internet subscribers – with the " “notice and takedown” " regime adopted in the United States.

Under the U.S. approach, the ISP is required to remove or block allegedly infringing materials upon receipt of notice from the copyright owner. This approach has been " “criticized as undermining the presumption of innocence and unnecessarily limiting free expression…” " ( Rogers Communications at para 26 ). Under the notice and takedown regime, the allegedly infringing material would be removed before the subscriber received any notice of the claimed copyright breach.

This approach was rejected by Parliament in favour of a regime that provided an initial opportunity for the subscriber to know of the claim prior to a court action being launched against them.

[ 108 ] A further relevant consideration is that Parliament chose to limit the liability of ISPs under the regime – they are insulated from liability for the copyright infringement of their subscribers and are only liable to statutory damages if they fail to comply with their specific statutory obligations under the Copyright Modernization Act ( Rogers Communications at para 27 ). [ 109 ] In this case, TekSavvy says that the evidence is inadequate: the key evidence that is found in the Arheidt Declaration is hearsay which cannot be subject to cross-examination since it is simply an exhibit to the affidavits.

This is exactly the type of evidence which was rejected in BMG , which remains good law. Further, it contends that the affidavits provide no basis to explain why the law clerks adopt the Arheidt Declaration or believe it to be true and that it is opinion evidence which is not properly submitted in accordance with the Rules or jurisprudence.

TekSavvy argues that before the Court can grant extraordinary relief such as a Norwich order, it must demand better evidence from copyright owners. [ 110 ] The Plaintiffs respond that these are all technical complaints and that TekSavvy’s arguments should not be accepted because they do not go to the merits of the evidence about alleged copyright infringement – evidence which TekSavvy did not challenge. They note that TekSavvy did not seek to cross-examine on any of the affidavits and so the substance of the evidence is not in question.

They also submit that TekSavvy contributed to the problems because it did not live up to its statutory obligation to forward the notices " “as soon as feasible.” " The Plaintiffs say they were simply trying to enforce their rights in a manner consistent with the direction in Rogers Communications , that the notice and notice regime was meant " “to allow copyright owners to protect and vindicate their rights as quickly, easily and efficiently as possible while ensuring fair treatment of all” " (para 46). [ 111 ] I find that the CMJ made a palpable and overriding error in finding that the evidence submitted by the Plaintiffs was sufficient to support the granting of a Norwich order.

The CMJ rejected the arguments on the sufficiency of evidence in the following terms: " “TekSavvy is not prejudiced by the evidence and the Court has accepted this evidence in support as have other ISPs who have provided the names and addresses of alleged infringers. The purposive approach to the legislation is required as noted by Justice Stratas in Voltage ” " (p 16). [ 112 ] I find this is in error in several respects. First, the question of whether TekSavvy is prejudiced by this evidence may be pertinent, but it is far from determinative of the essential question.

As is made clear in BMG , and resoundingly affirmed in Rogers Communications , the Court must consider the interests of the copyright owner, but it must also be concerned to protect the interest of the individual subscribers whose names are subject to disclosure. [ 113 ] Second, while a " “purposive” "

interpretation of the Act is undoubtedly important, that legislation does not govern the granting of a Norwich order. The two regimes must operate " “in tandem,” " but the ultimate protection against wrongful disclosure of subscribers’ names, and the breach of privacy and public exposure that may be associated with it, rests with the Court.

This is reflected in the final element of the test in BMG : " “… the public interest in favour of disclosure must outweigh the legitimate privacy concerns of the person sought to be identified if a disclosure order is made” " (para 36). [ 114 ] These are weighty matters and the Court is entitled to demand the best available evidence to be filed in support of a motion seeking the extraordinary equitable relief of a Norwich order. [ 115 ] I am reinforced in this belief by the finding of the SCC in Rogers Communications that ISPs have important responsibilities to verify the information contained in the notice submitted by the copyright owner before sending it to their subscriber.

This is because the Court finds that the purposes of the legislative regime can only be fulfilled if the ISP takes steps to ensure the accuracy of the notices it is forwarding (paras 31-34). [ 116 ] In Rogers Communications the focus was on the obligation of the ISP to ensure that it had accurately correlated the IP address identified in the notice with the e-mail address of the subscriber connected to that IP address.

I find that the same holds true in respect of the more fundamental question of whether the copyright owner has provided an accurate notice to the ISP, for example whether the notice relates to an IP address which is associated with any of its subscribers at all. In the matter before me it appears that the Arheidt Declaration shows that one of the IP addresses included in the materials sent to TekSavvy was actually associated with a customer of another ISP.

It is not clear how or why this IP address was included in the motion materials associated with the order sought against TekSavvy, but it does confirm the importance of seeking the best available evidence. [ 117 ] Other mistakes in this case underline the importance of ensuring that the copyright owner bringing the motion takes sufficient steps to organize and present its best case.

For example, it appears that ME2 sought a Norwich order in respect of up to four TekSavvy subscribers who had not, in fact, ever received any notice of possible copyright infringement. [ 118 ] While I have no basis to question the finding of the CMJ that this was an inadvertent error and that it was all part of the " “growing pains” " associated with the transition to the new notice and notice regime, the fact remains that the Court could have issued a Norwich order that would have revealed the names of up to four subscribers who had never received the notice they should have received under the Copyright Modernization Act .

Furthermore, the Court would have issued this order without knowing that the notice requirements had not been met. [ 119 ] This underlines the importance of accuracy – starting with the copyright owner in bringing forward the best available evidence as to the basis for its belief that unlawful downloading and sharing has occurred, that it is linked to a particular IP address, that this address is within the bank of IP addresses allocated to the ISP, and that the required notice has been provided to the ISP. [ 120 ] I find that there are two inter-related problems with the evidence filed by the Plaintiffs which both demonstrate why their affidavits are not the " “best available evidence.” " [ 121 ] First, the affidavits of the law clerks do not meet the requirements of Rule 81.To put it bluntly, there is absolutely no indication of the basis for the statement that the law clerks swearing the affidavits adopt the Arheidt Declaration or believe it to be true.

Nor is there any explanation as to why the best evidence is not available. The fact that they work in the " “copyright enforcement group” " of the law firm representing the Plaintiffs may be relevant, in that they may have gained knowledge and expertise about how Maverickeye and its software function and why their reports should be viewed as accurate, but this is not explained. Nor is there any explanation as to why

Mr. Arheidt did not swear an affidavit in these matters. [ 122 ] Second, the key evidence in support of the granting of the Norwich order is set out in the Arheidt Declaration, but it is simply an exhibit to an affidavit. It is therefore beyond the reach of cross-examination. [ 123 ] This evidence is simply not good enough. I find that before granting a Norwich order better evidence must be filed. I have noted earlier the obligation on the copyright owner to provide as accurate information as is possible in the circumstances.

To this I would add that the key evidence of alleged copyright infringements must normally be set out in an affidavit, sworn either by a person with direct personal knowledge of how the evidence was gathered, or by someone who can explain why such evidence is not available and why they have reason to believe the truth of the material they are submitting. [ 124 ] These types of cases will normally involve high volumes of claims and a need for prompt action to prevent further copyright infringement: see, for example, the volume of requests received by Rogers in Rogers Communications at para 40 .

The Plaintiffs say they have adopted a practice of filing standardized materials, precisely because of these factors. This is consistent with the case before me where many notices were provided to several ISPs, and the Plaintiffs also point to numerous other similar cases where this type of evidence was accepted. [ 125 ] The need to deal with high volume claims and to do so quickly is undoubtedly a relevant consideration.

However, this does not explain why a standardized affidavit could not be produced from an affiant with direct personal knowledge of how the Maverickeye system works, why its reports should be accepted as reliable, and any steps which may have been taken in the normal course to verify the accuracy of the operation of the system. I observe that some of the language in BMG – and some of the arguments made by TekSavvy here – would seem to relate to concerns that the testimony of the individual who did the actual searches is not in evidence.

This could perhaps be explained because the system does not depend on individuals conducting searches. Rather, it appears that the " “searching” " is done by programming the software to look for sharing of copyrighted material. This software then scans the Internet on a continuous basis. This is precisely the type of information that should be provided to the Court in support of an application seeking such extraordinary relief. [ 126 ] This case illustrates why it is so important for the Court to have the best available evidence.

Mistakes were made which could have easily resulted in the disclosure of several individuals’ names, in a context where that disclosure would almost certainly have resulted in these people receiving letters indicating that they were being sued for copyright infringement and that they needed to seek legal advice. One can easily imagine the reaction of such individuals when this is the first notice they would have received of the matter. This is precisely what Parliament was seeking to avoid when it adopted the notice and notice regime in the Act .

This is also precisely what was of concern to the FCA in BMG (at para 21 ). [ 127 ] This did not happen here because TekSavvy opposed the motion and the errors were discovered. If the proceeding had been ex parte the mistake may have been prevented by the Court’s efforts – in questioning the Plaintiffs and poring over the records. What is clear is that it would never have come to light through cross-examination since the person in possession of the key information, Mr.

Arheidt, was beyond the reach of that. [ 128 ] Parliament intended that the notice and notice system operate in tandem with the process for disclosure through a Norwich order. The Act did not modify the law governing disclosure, although it did make provisions that will ensure that the copyright owner will be able to get access to the information it needs if it obtains such an order – since the ISP is required by paragraph 41.26(1)(

b) to retain certain key information upon receipt of a notice of alleged copyright infringement. In this way the law enables copyright owners to better protect their rights. [ 129 ] However, in leaving the Norwich order as the ultimate backstop for this regime, Parliament also left it to the courts to ensure that the stringent requirements for such extraordinary relief are satisfied. This is necessary to ensure that the privacy rights of individual subscribers are adequately protected.

This remains an important function of the Court in assessing whether to grant a Norwich order in a particular case. [ 130 ] I therefore find that the CMJ made a palpable and overriding error in finding that this evidence was admissible and sufficient to support the granting of a Norwich order. In making this finding I underline

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