Bell is arguing ‘copyright misuse’ in an effort to counter accusations it failed to send infringement notices to users.Christopher Katsarov/The Canadian Press
BCE Inc.’s Bell Canada BCE-T is fighting a $400-million lawsuit from several film production companies, who claim the internet service provider broke the Copyright Act by allegedly failing to forward tens of thousands of infringement notices to its customers.
The case, first brought in 2021 by major law firm Aird & Berlis LLP on behalf of five film companies, got new wind last week when a Federal Court of Appeal judge partly reversed a previous decision, allowing Bell to continue to argue “copyright misuse.”
It’s the first time the defence – arguing that companies are using copyright law for reasons other than protecting their intellectual property – has been used in Canada.
The judge’s decision to allow the telecom to amend and add detail to its pleadings sets a new precedent that could ultimately protect consumers who have illegally downloaded content, as other ISPs will now be allowed to use the defence, experts say.
The legal battle was based on 80,000 reported illegal downloads, using Bell’s network and BitTorrent, a popular peer-to-peer file-sharing platform, of six movies owned by the production companies: Angel Has Fallen, Hellboy, The Outpost, The Hitman’s Bodyguard, Hunter Killer and Rambo: Last Blood.
When a movie is illegally downloaded, film copyright holders – who track downloads of their content and collect internet protocol addresses of users who share the content – have the right to notify customers that they are breaking the law, and even take them to court for damages.
However, Bell Canada v. Millennium Funding Inc. differs in that the five production companies are not suing the consumers but Bell itself, for failing to deliver notice to potential defendants.
Under Canada’s Copyright Act, an ISP is not liable for copyright infringement taking place over its networks as long as it forwards legal notices to the subscribers doing the infringing. If it does not, it can be liable for statutory damages between $5,000 and $10,000.
The production companies claim that Bell did not forward 40,000 of these notices, and should therefore be liable for the maximum damage in each case.
In an e-mail, Millennium president Jonathan Yunger said the company had previously tried to work co-operatively with Bell, without success. “We are simply trying to make Bell pay compensation for its failure to do its job in fighting piracy,” he said.
Bell has put forward two defences.
First, the telecom has said it did not forward some notices for viable reasons, including that some were duplicates or erroneous, or that it lacked subscribers’ contact information. It has also challenged the argument that the $10,000 statutory penalty should be applied individually to each unsent notice.
Separately, Bell alleges in a counterclaim that the production companies’ method of copyright enforcement is itself unjust, in that it is used to “harass and intimidate alleged infringers, and to make exorbitant claims against ISPs. Bell pleads that it should not be liable for statutory damages in these circumstances,” according to Justice Judith Woods in her Aug. 29 decision.
In doing so, Bell is alleging copyright misuse. At the trial division, the judge felt there were not enough material facts to support that allegation, and another judge found that Bell should not be allowed to alter its pleadings.
But on Aug. 29, the Federal Court of Appeal found that Bell should be able to amend its argument to elaborate on its allegations.
This is a potential setback for content owners, as it may give defendants such as Bell another tool of defence in Canada, said John Simpson, founder of Shift Law and an intellectual-property lawyer in Toronto.
For now, “the facts need to be substantiated with evidence and the evidence needs to be tested,” said Michael Scardicchio, lawyer and founder of SLC Law.
Bell spokesperson Luc Levasseur said the Federal Court of Appeal reaffirmed that the primary intended purposes of Canada’s notice and notice regime are to deter online copyright infringement and balance the rights of interested parties.
“The regime is not intended to be used as a litigation tool to obtain damages,” he said in an e-mail.
Initially, Bell also alleged that Aird & Berlis itself was misusing the legal system – a notable accusation, as Ken Clark, the lead counsel for the plaintiffs, and his team have made a name for themselves taking dozens of copyright claims to court. But this counterclaim was previously struck by a judge for being inadequately supported by evidence.
While Bell now cannot continue to legally pursue the law firm, doing so left an impression in the legal community, Mr. Simpson said. “It’s highly unusual to sue a firm acting for a plaintiff, and suggest that the law firm is complicit in this,” he said.
Aird & Berlis declined to comment.
The dispute is playing out as streaming platforms make movies more easily accessible, albeit at increasing cost to consumers as monthly fees rise.
“It’s a difficult thing to balance the rights of copyright holders with general consumers,” Mr. Scardicchio said.
Bell itself owns and produces television and sports content, and alongside other telecoms was recently involved in a case that saw a father and son sent to jail for running Smoothstreams, a content-piracy service, after they failed to follow court orders.
Editor’s note: A previous version of this article incorrectly stated that Ken Clark previously served as lead counsel for Millennium Funding Inc. He continues to serve as lead counsel.