Rightsholders operating business models that attempt to turn piracy into revenue are always looking for ways to streamline their work to reduce costs and maximize profits. Identifying infringers in bulk is one of the favored options.

In 2016, a group of movie companies known for their pursuit of alleged BitTorrent pirates attempted something rare in Canada. Voltage Pictures, Cobbler Nevada, Ptg Nevada, Clear Skies Nevada, and several other companies filed an application at Federal Court requesting certification of a reverse class action. Their targets were an unspecified number of BitTorrent users who allegedly shared movies, including The Cobbler, Pay the Ghost, Good Kill, Fathers and Daughters, and American Heist.

Schemes targeting large numbers of internet subscribers are fraught with difficulties and rarely popular beyond the plaintiffs. Interveners in the case included Canadian Internet Policy & Public Interest Clinic (CIPPIC), Bell Canada, Cogeco Connexion, Rogers Communications, Sasktel, Telus Communications, Videotron, and Xplore.

All opposed the class action approach and in November 2019, the Federal Court supported their position. The Court found that since a file-sharing case involving many alleged infringers would require multiple individual fact-findings for each class member, class certification would be denied on all grounds.

Voltage and related plaintiffs have a reputation for exhausting every option before conceding defeat, a track record maintained in Canada. In 2021 at the Federal Court of Appeal, Justice Rennie set aside the 2019 Federal Court ruling, reversing it on all grounds.

In a process over six years old, Voltage's goal of targeting more than 55,000 subscribers in a class action has faced deterioration over time. As of September 16, 2022, potential class members (internet account subscribers who allegedly infringed Voltage's copyrights during the previous six months) had been reduced to less than 1,000.

As is often the case when rightsholders target large numbers of internet users, ISPs are expected to assist in processes that involve their subscribers and their data. In this case the ISPs objected to Voltage's plan, which would require them to send a class action "Certification Notice" to the alleged infringers and "retain data on identities of their subscribers until following final determination of the hearing on the merits (including any appeals)."

The ISPs said that retaining subscriber data would mean the unrealistic proposition of storing all data for all customers for years, redesigning their software and databases to automatically preserve only data retroactively selected by Voltage, or manually saving data for potentially tens of thousands of customers.

Inevitably the ISPs would face other subscriber-related issues, including customers calling for legal advice and the need to train staff to deal with these sensitive discussions. Some customers may choose to complain or blame their ISP for their predicament, or even leave to join another ISP. Others may be tempted to sign up with bogus contact information to avoid legal liability, preventing ISPs from contacting their own customers in relation to their accounts or developing business with them.

More fundamentally, the ISPs said that using the "notice-and-notice" system to communicate with class members would be illegal under Canadian law. The Federal Court agreed and said that would not happen.

"Voltage's proposed use of the notice-and-notice regime to advance this class proceeding is inconsistent with the Copyright Act, and is contrary to law," Justice Fothergill's order reads. "It is therefore unnecessary to reach definitive conclusions regarding the ISPs' concerns about cost, inconvenience and the potential disruption of their relationships with their subscribers."

In conclusion, the Federal Court found enough deficiencies in Voltage's litigation plan to deny class certification, at least for now.

"Voltage remains at liberty to present a revised litigation plan that does not depend on the notice-and-notice regime in the Copyright Act to identify and communicate with Class Members, and that makes adequate provision for the funding of Class Counsel," the order reads.

How the case will progress from here is unclear. In very basic terms, the settlement model favored by Voltage is no different from any other business; costs of doing business are weighed against anticipated revenue (via settlements) and if the difference represents an acceptable return, there's a reason to press ahead.

Since free use of the notice-and-notice has now been ruled out, costs appear to be going in the wrong direction, something particularly problematic in Canada. Unlike most other regions where Voltage is active, Canada places a $5,000 cap on non-commercial infringement, something that significantly dampens the psychological pressure to settle "or else".