Copyright Notice Letters Turn Into Demand Letters

 In IP law, News

Thousands of students at the University of Manitoba have been receiving copyright infringement notices asking them to pay settlement offers. They are just the latest Canadian Internet users to receive these kind of letters. Whether innocent or guilty of copyright infringement, Canadians should ignore these notices. They have no obligation to pay these settlement offers, and they are extremely unlikely to face legal action.
The Regime                
In 2015, Canada created the “Notice and Notice” regime, a copyright notice system that requires internet intermediaries, such as internet service providers (“ISPs”), to forward copyright infringement notices drafted by copyright owners (or their agents) to users whose IP addresses have been identified as being the source of possible copyright infringement. The notice regime is designed simply to notify users that copyright infringement is allegedly taking place at their IP addresses.
Copyright Trolls
But the Notice regime is also being used to shakedown money from Canadians. Companies like CEG TEK International, a US-based copyright monetization firm representing copyright holders, monitor BitTorrent file sharing for content owned by their clients. If a client’s content is identified as being shared by an IP address, a firm will send out a settlement demand email, which will be forwarded by an ISP. The demand letter will state the following:

    • The Internet account has been identified as having been used in the unauthorized copying or distribution of a copyrighted work.
    • Unauthorized copying or distribution is illegal and subject to statutory damages of up to $5,000 or non-statutory damages that could be higher (they fail to mention that the those higher damages are only applicable to commercial infringement).
    • The user has until a certain date to access a settlement offer and settle online.

 

Consequences
A person who receives this notice of alleged infringement is under no legal obligation to pay any settlement offered. Any allegation of infringement would need to be proven in court. The person is also under no obligation to contact the copyright owner or its intermediary; in fact, the Notice and Notice regime does not impose any obligations on a person who receives a notice.
There is little to no evidence that copyright holders have been suing Canadians who have failed to pay settlement offers made by companies like CEG TEK International. It makes little financial sense to sue because the most a copyright holder could get from a person for all of his or her non-commercial infringements is $5,000[1]and the amount actually awarded is likely to be much less as the award must be proportionate to the infringement. The potential award would be significantly less than the costs associated with the legal action.
Another problem for a copyright holder or a company like CEG TEK International is that it only has an IP address; it does not have the personal information associated with that IP address. An IP address cannot be sued. Infringement cannot exist unless there is a person alleged to have committed the infringement, a person who knew or ought to have known known there would be infringement.

[1] Copyright Act (R.S.C., 1985, c. C-42) s 38.1(1)(b)

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