By Guillaume Lavoie Ste-Marie for Smart & Biggar/Fetherstonhaugh
MESSAGE: Rights holders in the media industry that are victims of piracy should therefore consider enforcing their rights before the Federal Court of Appeal, which demonstrates an understanding of the piracy ecosystem and which can issue remedies when the infringer can be identified and is located in Canada.
On February 20 2018 the Federal Court of Appeal issued its judgment in Bell Canada v Lackman,(1)declaring that an interim injunction authorising the shutdown and seizure of piracy websites and an Anton Piller order were legal and had been properly executed. The court also granted an interlocutory injunction that will remain valid until the trial against the owner and operator of these websites, which had hosted and distributed a number of add-ons for the popular Kodi media player. The court noted that these add-ons had been “clearly designed to facilitate access to infringing material” and could not benefit from the “merely a conduit” exception to infringement.
The appellants – part of the Bell, Rogers and Québecor media groups – were broadcasters and broadcast distribution undertakings that owned and retransmitted television programming in Canada.
The respondent, Adam Lackman, owned and operated the TVAddons website, through which he promoted and distributed a large number of add-on applications for the Kodi media player, including add-ons that were specifically configured to provide users with unauthorised access to a vast amount of television programming owned and distributed by the appellants.
Given the infringing nature of TVAddons and the respondent’s known past illegal activities, the appellants sought and obtained an ex parte interim injunction and Anton Piller order before Justice LeBlanc on June 9 2017. The interim injunction restrained the respondent from further engaging in the operation of the TVAddons website and, notably, authorised bailiffs and computer technicians to shut down and take custody of the TVAddons servers and domain names to ensure that they would not be transferred outside the court’s jurisdiction. The Anton Piller order authorised:
• the bailiffs to seize or make copies of relevant evidence; and
• the appellants’ solicitors to question the respondent on topics relating to the operation of TVAddons.
On June 21 2017, after the execution of these interim orders, the appellants brought a motion before Justice Bell for a declaration that the execution was lawfully conducted and to convert the interim injunction into an interlocutory injunction. In his June 30 2017 judgment,(2) Justice Bell reviewed the appellants’ case de novo and held that their evidence did not support a strong prima facie case of infringement against the respondent, thus failing at the first prong of the Anton Piller test.
Specifically, he found that the add-ons hosted and distributed by the respondent were akin to “mini Google” search engines and that, as such, they could benefit from the conduit exception to infringement provided in Section 2.4(1)(b) of the Copyright Act. He also held that issuing an injunction would cause the respondent undue financial harm.
Justice Bell therefore dismissed the appellants’ motion in its entirety by:
• revoking the Anton Piller order and the interim injunction order; and
• ordering the TVAddons online assets and all articles seized or copied during the execution of the June 9 2017 order to be returned to the respondent.
Urgent stay pending appeal
Due to the risk that control over the relevant websites and servers could easily be taken out of the court’s jurisdiction and that crucial electronic evidence could be destroyed or hidden, the appellants urgently requested a stay from the Federal Court of Appeal immediately following the July 2 2017 decision, the Sunday of a holiday weekend. Later that day, Justice Stratas granted an interim stay of the June 30 2017 order – which he then renewed until the Federal Court of Appeal could hear a formal motion – noting that he had been persuaded that the appellants had an arguable case on appeal. Within two weeks, Justice Scott granted a formal stay pending appeal.(3)
Federal Court of Appeal decision
The Federal Court of Appeal held that Justice Bell’s conclusions were based on:
a misapprehension of case law and the Copyright Act; and
overriding and palpable errors in construing the evidence.
The court therefore:
set aside the entirety of Justice Bell’s order;
declared that the interim injunction and the Anton Piller order had been lawfully executed; and
issued the interlocutory injunction sought by the appellants.
On the issue of the Anton Piller order, the Federal Court of Appeal first concluded that Justice Bell had misconstrued the respondent’s activities in holding that the add-ons distributed by TVAddons were akin to a mini Google search engine and noted the important difference between:
an indiscriminate search engine, such as Google; and
infringing add-ons, which are designed to target predetermined content in a manner that is both user friendly and reliable.
The court therefore held that:
the appellants had presented a clearly strong prima facie case of infringement of their exclusive right to make their programming available to the public by telecommunication; and
the respondent could not benefit from the Section 2.4(1)(b) conduit exception and “cloak himself in the shroud of an innocent disseminator, when his website clearly targets those who want to circumvent the legal means of watching television programs and the related costs”.
The court then held that Justice Bell “would have had no choice but to find that the appellants met all the [other] criteria for the issuance of an Anton Piller order” – namely, the risk that:
they would suffer serious harm;
the respondent possessed incriminating evidence; and
evidence would be destroyed.
On these points, the court held that Justice Bell should have considered the respondent’s history of satellite television signal piracy and the sale of jail-broken set-top boxes. The court also found that some aspects of the respondent’s untrustworthy character were relevant, including the fact that he had previously been found guilty of lying to a police officer and had attempted to conceal crucial evidence and lied to the independent solicitors during the execution of the interim order.
Finally, because of the clearly infringing nature of TVAddons and the lack of evidence regarding the respondent’s alleged lack of financial resources – which was partly due to the fact that the respondent had gone to great lengths to conceal his identity and had operated TVAddons through offshore businesses and bank accounts – the court found that Justice Bell’s findings were fatally flawed and that an interlocutory injunction should be issued.
Notably, the court also held that because online assets such as websites can easily be moved and reactivated elsewhere, it was justified for the appellants to seek, obtain and execute an interim injunction that authorised computer technicians to completely shut down the TVAddons websites, servers and social media and transfer them to the custody of bailiffs.
This decision confirms that the Federal Court of Appeal will issue extraordinary remedies to curb the effects of media piracy and that these remedies are flexible and can include website shutdowns and transfers when necessary.
The Federal Court of Appeal has acknowledged the harm that results from the dissemination of software that provides unauthorised access to infringing content and had already issued an interlocutory injunction against retailers of set-top boxes loaded with such software (for further details please see “Injunction against retailers of set-top boxes loaded with infringing applications”). In its February 20 2018 decision, the court confirmed that offering the same service through a website is also punishable because:
“the means through which access is provided to infringing content is different (one relied on hardware, while the other relied on a website), but they both provided unauthorised access to copyrighted material without authorisation of the copyright owners.”
As such, the court held that “there is no principled reason to distinguish one from the other”.
Rights holders in the media industry that are victims of piracy should therefore consider enforcing their rights before the Federal Court of Appeal, which demonstrates an understanding of the piracy ecosystem and which can issue remedies when the infringer can be identified and is located in Canada.
For further information on this topic please contact Guillaume Lavoie Ste-Marie at Smart & Biggar/Fetherstonhaugh by email (email@example.com).
(1) 2018 FCA 42.
(2) 2017 FC 634.
(3) 2017 FCA 154.