Monday, October 2, 2023

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Weak IP Address Evidence Collapses 'Non-Responsive Movie Pirates' Lawsuit
Andy Maxwell, 02 Oct 09:02 AM

ip addressVoltage Holdings is one of many mostly American movie companies that have attempted to turn piracy into profit over the last 15 years. A lawsuit the company filed in Canada is broadly the same as others filed elsewhere but the same cannot be said about the outcome.

Background

In 2017, piracy monitoring company Maverickeye collected IP addresses of BitTorrent users sharing the Voltage-owned sci-fi movie 'Revolt'. Canada operates a so-called 'notice-and-notice' regime so Voltage identified the ISPs related to the IP addresses and warning notices were sent to the relevant subscribers. Second notices were sent after Maverickeye found the same IP addresses sharing the same work a week or more later.

In March 2018, Voltage filed a statement of claim against 110 'Doe' defendants, identified only by their IP addresses. Voltage later obtained a so-called Norwich order which compelled the ISPs to disclose the names and addresses of the subscribers.

Voltage labeled a subset of those subscribers "the worst of the worst" and since they failed to respond, the company requested default judgment at Canada's Federal Court.

Justice Angela Furlanetto agreed the defendants were in default but since Voltage only presented IP address-based evidence, questions remained over who had actually shared the movie.

The Judge said that there wasn't enough evidence to show a direct link to the subscriber or draw an adverse inference. Voltage argued that if the subscriber wasn't the infringer, the fact that they had already received warnings under Canada's 'notice-and-notice' regime, among other things, meant that they should be held liable for 'authorizing' infringement carried out by others.

In June 2022, Justice Furlanetto declined default judgment but also refused to dismiss the case. Voltage was given more time to present evidence to support direct infringement or authorization but the company took its case to the Federal Court of Appeal instead.

Basis for Voltage's Appeal

In its 36-page memorandum filed in November 2022, Voltage outlined two legal theories; either the billpayers pirated the movie themselves (direct infringement), or they authorized someone else's direct infringement by allowing them to continue pirating Voltage's movie, despite receiving warning notices from their ISPs.

Arguments were heard on March 28, 2023, and three appeal court judges (Justices Donald J. Rennie, David W. Stratas, Wyman W. Webb) handed down their judgment last week.

The judgment says that the appeal engages two issues: the jurisprudence on what constitutes direct infringement and authorizing infringement, and the burden of proof and circumstances under which an adverse inference can be drawn.

"These issues are closely interrelated. The jurisprudence with respect to the law of copyright determines the minimum evidentiary requirements to establish the asserted types of infringement; in other words, the jurisprudence constrains the extent to which an adverse inference may be drawn in the context of online copyright infringement," the judgment reads.

Judgment Guided By Supreme Court Ruling in 2022

According to Voltage, once it had presented all "technologically available" evidence to the Court, a "tactical burden of proof" shifted to the internet subscribers. This effectively meant they had to show they were not the infringers. In respect of its authorization claims, Voltage said that Justice Furlanetto was wrong to insist on more evidence; the fact that the subscribers received notices yet failed to control their internet connections was sufficient.

The judgment deals with the authorization claims first, guided by a Supreme Court decision handed down in 2022 in Society of Composers, Authors and Music Publishers of Canada v. Entertainment Software Association.

"The Supreme Court endorsed the Copyright Board's determination that 'it is the act of posting [the work] that constitutes authorization' because the person who makes the work available 'either controls or purports to control the right to communicate it' and 'invites anyone with Internet access to have the work communicated to them. The authorizer is the individual directly engaging with the copyrighted material," the judgment clarifies.

As a result, the Court of Appeal says that whoever used the subscribers' internet connections to make Voltage's movie available for download, authorized the infringement. The Supreme Court found that an authorizer permits reproduction but Voltage claims that an authorizer is someone who permits someone to permit reproduction.

The difference in opinion would prove fatal.

Collisions in Copyright Law

Justice Rennie says the Voltage appeal fails to show "any reversible error" in the Federal Court's decision. Furthermore, Voltage's arguments on authorization are "inconsistent" with the Supreme Court's 2022 decision. Voltage's claims of direct infringement also run into trouble.

"Although it accepted that individuals using each respondents' IP address had infringed the appellant's copyright by uploading the Work, the Federal Court found that it could not conclude at this time that the respondents were themselves those particular
individuals. I agree," Justice Rennie writes.

On the question of a subscriber's failure to defend, the Judge agrees that can lead to an adverse inference. However, just because a defendant is found to be in default at an early stage, it does not necessarily follow that an adverse inference should be drawn at the same stage.

"If the fact that a defendant was in default automatically allowed for adverse inferences at the second stage of the test for motions for default judgment, plaintiffs on ex parte motions for default judgment would need to present no evidence to the court in order to be successful. Some evidence is required," Justice Rennie continues.

Indeed, the Federal Court held that "something more is needed than the bare assertion that a subscriber is, by default, the user responsible for infringement." Voltage failed to provide sufficient evidence, the Court of Appeal notes, so no adverse inference could be drawn.

Court of Appeal Tightens the Noose

Voltage's reliance on infringement warnings to show subscribers' failure to exercise control – over internet connections and connected devices – fails.

As clarified in the Supreme Court decision, authorization 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.

Furthermore, to establish an infringing activity, there must be evidence to show what the activity does to the work in question.

"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," the Court of Appeal notes.

Conclusion: Voltage's Appeal is Dismissed

From the judgment: "In the factual matrix of this case and at this relatively early stage of this case, the defendants' lack of participation in litigation does not offset the plaintiff's lack of evidence.

"The Federal Court was not obligated to draw an adverse inference at this stage of the litigation merely because the respondents had, by their silence, not put forward sufficient evidence to rebut the appellant's allegations," Justice Rennie concludes.

For these reasons, Justices Rennie, Stratas, and Webb, dismissed the appeal.

The full judgment is available here (pdf)

From: TF, for the latest news on copyright battles, piracy and more.

Jake Paul Fight Lasted 119 Seconds, H3 Podcast Copyright Battle Hits 124 Weeks
Andy Maxwell, 01 Oct 06:46 PM

h3-jakeIn our brave new world where millions of ordinary people are copyright holders of snaps they publish to social media or videos they upload to YouTube, awareness of copyright law is at an all-time high.

Evidence is easily found on Reddit, where users of /r/copyright and similar subs answer questions including: "Can I print t-shirts with Batman on the front if I only do a few and give them away?" and "Is it copyright if nobody knows I copied a song and changed it so it sounds nothing like the original?"

Similar gems are a regular occurrence on YouTube. Who hasn't seen copies of well-known tracks uploaded in full and protected by the statement: "I do not own this song. Full credits go to the copyright owner. No copyright infringement intended."

And then there's the increasing number of channels posting 'copyright disclaimers' citing Section 107 of the Copyright Act 1976, stating that since everything on the channel is 'fair use', channel owners are exempt and can never be sued.

fair and unfair use

While exemption is an interesting proposition, the image above appears to show a channel going further still; while happily claiming fair use 'protection' for themselves, they warn of legal penalties should anyone else use "any part" of their video.

Success, Fair Use and Lawsuits

With lots of hard work and even more luck, these channels could one day be as successful as the award-winning H3 Podcast. Created by Ethan and Hila Klein, the channel has over 2.93 million subscribers and almost 1.2 billion views.

Not only are the Klein's experts in growing a brand and popularizing their work, they are also very knowledgeable about copyright law, and particularly well-versed when it comes to fair use. Unfortunately, that hasn't stopped them from being sued; of the last seven years or so, at least three years have been spent defending copyright infringement lawsuits.

The Klein's emerged victorious from a lawsuit in 2017 after mounting a successful fair use defense. That wasn't without its traumas; copyright lawsuits can be extremely expensive and the Kleins' lives may have taken a different turn had fans not donated $170,000 towards their defense.

119 Seconds of Boxing, 124 Weeks of Litigation (and counting)

It's not uncommon for the H3 Podcast to discuss current events, providing the type of commentary and criticism that allows for the limited use of copyrighted content without having to obtain prior permission. In April 2021, in the wake of Jake Paul's 119-second knockout of former UFC fighter Ben Askren, H3 Podcast declared the fight "a disaster" in a video on YouTube, alongside footage of the fight to back up their claims.

Event promotor Triller responded with a copyright infringement lawsuit demanding $50 million in damages. Four months later, H3 Podcast's attorneys filed an extremely detailed motion to dismiss, most likely at considerable expense.

If those 'fair use immunity' disclaimers on YouTube actually worked, H3 Podcast wouldn't be spending money defending the use of a clip that represents just a fraction of a four-hour broadcast. Admittedly, things were complicated somewhat by Ethan's claim on the show that he hadn't actually paid for the fight.

Indeed, the clip shown on the YouTube podcast was actually a pirated copy that Ethan had uploaded to a different YouTube channel as an unlisted video. Of course, Triller's legal team seized the opportunity to pile on the pressure.

Does a URL in a Video Infringe Copyright

With a subtle shift in tactics, Triller said it had no interest in stifling H3's commentary and criticism, in a video that had already generated a million views. Triller even implied that under slightly different circumstances, the clip of the fight shown in the commentary video could've been shown legally, if it wasn't for the defendants' "negligence, willfulness, or maliciousness, or some combination thereof."

The image below shows a screenshot of that video, with the offending information redacted.

h3-paul-v-askren-unlisted

The fact that the URL of the unlisted video appeared in H3's commentary piece ('distribution video') allowed Triller to claim that the video facilitated the infringements of those who watched the fight on the unlisted channel, which relied on H3's directly infringing upload.

Order on H3's Motion to Dismiss

With the lawsuit now into its third year, the court has just ruled on a motion to dismiss filed by H3. One aspect of that motion argued that Triller's claims fail because the unlisted fight video was 'fixed' after the broadcast was transmitted. The court found that since Triller alleged that H3 had a copy of the video, but wasn't on the list of those authorized to obtain the broadcast, at this stage, the company's allegations are sufficient.

The court's handling of the URL in the unlisted video, which appeared in the commentary video unredacted, went as follows:

Defendants made the Unlisted Video independently accessible by displaying its URL in the Distribution Video. Anyone with that URL was able to access the Unlisted Video. At the time of the briefing of the Motion, it appears that the Unlisted Video had been viewed 65 times.

Although the Distribution Video displayed the URL in small font, and although no one spoke on the Distribution Video urging viewers to watch the Unlisted Video or read the URL, the URL was visible. The Distribution Video was viewed more than one million times, far more times than the Unlisted Video.

However, drawing every reasonable inference in Plaintiff's favor, and recognizing that evidence of Defendants' claimed intent is not to be considered in considering a motion to dismiss, the allegations of the [Second Amended Complaint] are sufficient to present the inference that Defendants created the Unlisted Video and made it publicly accessible for reasons unrelated to the critical commentary in the Distribution Video.

In conclusion, the motion to dismiss was denied in part and granted in part, meaning the case will continue. For how long isn't clear, but for YouTubers preparing their next counternotice in response to a copyright claim, there's considerable food for thought.

While it's convenient to claim that use of copyrighted content is 'fair', it doesn't necessarily follow that it is. Even in cases where everything points towards a finding of fair use, there is nothing to stop a rightsholder from filing a lawsuit, no obvious timeframe to discover who was right, and no miracle way of paying attorneys' fees.

Millions of people rely on fair use every single day, but it's a legal defense to be called upon sparingly, not a magic YouTube spell for everyday use.

The order on H3's motion to dismiss is available here (pdf)

From: TF, for the latest news on copyright battles, piracy and more.

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