Table of Contents Hide
In a proceeding before the Federal Court Voltage sought a default judgment against Internet subscribers for copyright infringement. Voltage argued that individuals who receive notices under the Copyright Act Notice and Notice Regime can be found liable for infringement as direct infringers or for authorizing infringement merely because their accounts were allegedly used to commit acts of infringement. Voltage’s motion for default judgement was dismissed by Furlanetto J. This decision was just affirmed by the Federal Court of Appeal in Voltage Holdings, LLC v. Doe #1 2023 FCA 194. In short, the FCA held that a person is not liable for copyright infringement without evidence other than it is a holder of an account that has been used to infringe copyright.
Voltage sought default judgment against individuals (the respondents) for two types of copyright infringement: direct infringement and authorizing infringement. In respect of the first, Voltage asserted that the individuals who were ISP account holders directly infringed copyright by making a protected work available for download online (by posting or uploading the work); in respect of the latter, Voltage asserted that the individual account holders authorized an unknown person (a user of the Internet connection) to directly infringe the appellant’s copyright.
The Court explained the background of the default judgment motion as follows.
 In 2012, Parliament enacted the Copyright Modernization Act, S.C. 2012, c. 20 (the CMA), to amend the Copyright Act, R.S.C. 1985, c. C-42 (the Act) and respond to new technological pathways that facilitate online copyright infringement. The summary accompanying the CMA states that the amendments to the Act aim to “update the rights and protections of copyright owners to better address the challenges and opportunities of the Internet, so as to be in line with international standards.” The summary also notes that the amendments seek to “clarify Internet service providers’ liability and make the enabling of online copyright infringement itself an infringement of copyright.” The CMA established a system by which copyright owners may send a notice to internet service providers (ISPs), alleging online copyright infringement occurring at a particular electronic location called an Internet Protocol address (an IP address). On receipt, the ISP must forward a notice to the Internet subscriber corresponding to the IP address identified by the copyright owner. This is known as the “notice and notice” regime (the Act, ss. 41.25 and 41.26).  The appellant, Voltage Holdings, LLC, is a movie production company and the owner of the copyright to the film Revolt (the Work). The appellant detected that internet users at certain IP addresses were making the Work available using BitTorrent software, a protocol for distributing files on a peer-to-peer network. BitTorrent is particularly well suited for transferring large files such as movies, music, or computer software due to its capacity to upload and download files from a group of hosts instead of from a single source server. Using this software, internet users at the flagged IP addresses were uploading and offering copies of the Work without the appellant’s consent.  Warning notices were sent to the internet subscribers through the notice and notice regime, advising that infringing activity had been detected at the internet subscribers’ IP addresses. If a second instance of infringement occurred at the same IP address within seven days of the first notice, the appellant sent a second warning notice to the subscriber at the offending IP address. The appellant subsequently obtained Norwich orders requiring ISPs to provide it with information about the internet subscribers’ identities based on the IP addresses at which the infringement was occurring. The appellant then served the respondents, a subset of all the internet subscribers who had received two warning notices, with a statement of claim. No defences were filed.
Reason for dismissing claim for direct infringement
The FCA held that Voltage’s claim of direct infringement was not proved. The FCA relied on the Supreme Court’s decision in Rogers where the court acknowledged “that there will likely be instances in which the person who receives notice of a claimed copyright infringement will not in fact have illegally shared copyrighted content online”. “An internet subscriber therefore cannot be assumed to be the individual responsible for any infringing activity connected to their internet account.”
The claim for direct infringement failed because Voltage adduced no evidence that the Internet account holders had committed any acts of direct infringement. The FCA rejected Voltage’s arguments that an adverse inference should be drawn against the account holders merely because they received notices of claimed infringement but took no action to defend the copyright claims against them. Further, copyright infringement cannot not be proved merely by contending that further evidence of infringements is unavailable.
 The appellant’s argument regarding its inability to collect further evidence is, in the absence of an attempt to obtain discovery from the account holder, unpersuasive. The appellant’s assertion that it could not have proven more than it did, technologically speaking, does not afford it more flexibility in the weighing of its evidence, lower the applicable standard of proof, or displace what must be advanced to establish a copyright owner’s claim of infringement. Legal burdens are not shifted to the defendant merely because the plaintiff has put forward all of the evidence possible. Further, adverse inferences do not necessarily follow only because a party has presented all the evidence “reasonably available” to it on an ex parte motion. The appellant was still required to prove its claims of infringement to the Federal Court on a balance of probabilities. The Federal Court found that it had failed to do so, and I see no error in this conclusion in light of the guidance from Rogers that a mere association with an offending IP address is not conclusive that the corresponding internet subscriber shared copyrighted material online (Reasons at para. 56; Rogers at paras. 35 and 41).
 The appellant’s evidence that an internet subscriber is often the individual using BitTorrent software to distribute files does not overcome the speculation required to conclude that these particular respondents, in this particular case, are the infringing internet users (Perino Affidavit at para. 16, Appeal Book at 203). The appellant itself acknowledged that “it is well known that home internet accounts can be used by more than one person” in its written submissions (Appellant’s memorandum of fact and law at para. 32).
Reasons for dismissing claim of authorizing infringement
The law of authorizing infringement
The FCA correctly noted that Voltage’s action depended on the legal parameters of copyright infringement and the evidentiary principles guiding what is required to satisfy a trier of fact that the circumstances constitute infringement. The court therefore canvassed both the law of authorization and the evidence required to establish infringement.
The FCA summarized the law of authorization as follows.
 First, subsection 3(1) of the Act grants a copyright owner the exclusive right to produce (or reproduce), perform, or publish their work. It also grants a copyright owner the sole right to “authorize any such acts.” Accordingly, anyone who authorizes any of these expressions of the copyrighted work, absent a licence to do so, infringes the copyright owner’s exclusive authorization right (the Act, ss. 3(1) and 27(1)).  Second, and relatedly, authorizing infringement requires that the authorizer hold themselves out as capable of granting one of the copyright owner’s exclusive rights (Barry Sookman, Steven Mason & Carys Craig, Copyright: Cases and Commentary on the Canadian and International Law, 2nd ed. (Toronto: Carswell, 2013) at 1001):
To authorize an act, the alleged infringer must grant or purport to grant, either expressly or by implication, the right to do the act complained of. Further, the grantor must have some degree of actual or apparent right to control the actions of the grantee before he will be taken to have authorized the act. An act is not authorized by somebody who merely enables or possibly assists or even encourages another to do that act, but who does not purport to have any authority which he can grant to justify the doing of the act. Third, in copyright law, to “authorize” means to “sanction, approve and countenance” (CCH at para. 38). Although “countenance” in this definition may initially appear to include some degree of passivity within the scope of “authorization”, the Supreme Court has confirmed that the term “countenance” here “must be understood in its strongest dictionary meaning, namely, ‘[g]ive approval to; sanction, permit; favour, encourage’” (CCH at para. 38).  Fourth, there are certain objective factors that, on their own, do not amount to authorizing infringement. An individual who provides the means or equipment to infringe another’s copyright has not necessarily authorized the infringement, for example (ESA at para. 106; CCH at para. 38). Similarly, upon receiving a warning notice, an internet subscriber is not automatically assumed to have been responsible for the asserted copyright infringement; the mere association with an IP address is not conclusive of guilt (Rogers at para. 41).  Fifth, the law of authorizing infringement relies in part on a subjective standard. The knowledge that someone might be using neutral technology for infringing activity is not necessarily sufficient to establish authorization, and courts presume that an individual who authorizes an activity does so only so far as it is in accordance with the law (SOCAN at para. 127; CCH at para. 38; Sookman at 1002). In some cases, however, a “sufficient degree of indifference” may allow a court to infer that the individual has indeed authorized the infringement (CCH at para. 38; SOCAN at para. 127).  Sixth, in authorization analyses, courts have historically considered the relationship between the alleged authorizer and the person who infringes as a result of the authorization. A “certain relationship or degree of control” existing between these parties may rebut the presumption that a person who authorizes an activity has only authorized lawful forms of that activity (CCH at para. 38). Control over the means by which the infringement occurred may also warrant a finding of implicit authorization; additionally, authorization may be inferred where the supply of such means was “bound to lead to an infringement and was made specifically for that purpose” (Sookman at 1002). These factors suggest that the alleged authorizer played an active role in leading the other party to infringe the copyright owner’s exclusive rights under subsection 3(1) of the Act.
Reasons for dismissing the authorization claim
Voltage’s liable theory was held to be untenable under the law of authorization for two key reasons.
First, a claim for authorization cannot be made out merely by alleging that a person made available a technology (an internet connection) that can be used to infringe copyright.
 “Authorization” therefore depends on the alleged authorizer’s control over the person who committed the resulting infringement; it does not depend on the alleged authorizer’s control over the supply of their technology (CCH at paras. 38 and 45; Sookman at 1002). Allowing the “mere use of equipment that could be used to infringe copyright”, which at best is all we have here, does not fall within the legal definition of “authorizing” (CCH at paras. 38, 42-43). The Federal Court adhered to this principle, and found that the appellant had not proven any activity beyond the respondents’ sharing of their internet accounts (Reasons at paras. 59, 68 and 70).
Second, under the recent Supreme Court decision in ESA the court held that if a work is downloaded, the author’s reproduction right is engaged; and, importantly, “if the work is made available for downloading, the author’s right to authorize reproductions is engaged”. “The authorizer is the individual directly engaging with the copyrighted material.” Based on ESA, “the person using the respondents’ internet accounts to make the Work available for download via BitTorrent is authorizing infringement.” However, Voltage’s claim of infringement is that “an authorizer is someone who permits someone to permit reproduction.”
 ESA establishes clear guidance as to the legal and evidentiary requirements of infringement in the context of online infringement. To establish an infringing activity, there must be evidence that what the activity does to the work engages one of the three interests in subsection 3(1) of the Act (ESA at paras. 56-57). Posting a work online and inviting others to view it engages the author’s authorization right; however, sharing internet access after receiving notices of alleged infringement does nothing to the work in question, and does not therefore engage any copyright interest granted to the author exclusively (ESA at paras. 56-57, 106; the Act, ss. 3(1) and 27(1)). Because the latter scenario arises here, the activity asserted by the appellant as “authorization” cannot justify protection under the Act.
Voltage’s loss in this case follows its recent loss in Voltage Pictures, LLC v. Salna, 2023 FC 893, in which its request for certification of a reverse copyright class action was dismissed by the Federal Court. That decision is also being appealed by Voltage.