Executive Summary: Key Legal and Evidentiary Issues

• The motion addressed whether Bell Canada's Further Amended Statement of Defence and Counterclaim exceeded the scope of leave granted by the Federal Court of Appeal.
   
• Millennium Funding, Inc. and its co-plaintiffs sought to strike broad portions of Bell's pleadings under Rule 221 of the Federal Courts Rules.
   
• Central to the dispute was whether Bell's copyright misuse defence disclosed a reasonable prospect of success.
   
• Several allegations concerned whether Bell had withdrawn prior admissions regarding the propriety of Millennium's infringement notices.
   
• Additional issues involved whether Bell advanced positions inconsistent with earlier proceedings and whether its references to third parties were properly pleaded.
   
• Finally, the court considered whether Bell's counterclaim for abuse of process pled sufficient material facts to survive the motion.
   

Facts of the case

Millennium Funding, Inc., Outpost Productions, Inc., Bodyguard Productions, Inc., Hunter Killer Productions, Inc., and Rambo V Productions, Inc. filed a Notice of Action and Statement of Claim in 2021, alleging that Bell Canada and Bell Aliant failed to forward copyright infringement notices as required under the "Notice Regime" in sections 41.25 and 41.26 of the Copyright Act. Using forensic software to detect IP addresses allegedly associated with copyright infringement, the plaintiffs send warning notices to internet service providers, who must forward those notices to the associated subscriber. Statutory damages of almost $400 million were sought under subsection 41.26(3) of the Copyright Act. Bell filed an Amended Statement of Defence on October 28, 2021, denying any breach and counterclaiming against Millennium and its counsel, Aird & Berlis LLP, for torts including abuse of process and unlawful means conspiracy. Millennium successfully moved to strike Bell's pleadings before the Case Management Judge, whose order was upheld by the Federal Court but partially overturned by the Federal Court of Appeal in Bell Canada v Millennium Funding, Inc, 2025 FCA 153, which granted Bell leave to amend its copyright misuse defence while otherwise upholding the strike order. Bell then filed a Further Amended Statement of Defence and Counterclaim on December 8, 2025. Millennium brought this motion on December 19, 2025, seeking to strike broad portions of that pleading, arguing the amendments exceeded the scope of leave granted by the Court of Appeal.

Policy and legislative provisions at issue

The motion turned on Rule 221(1) of the Federal Courts Rules, which permits a pleading to be struck where it discloses no reasonable cause of action or defence, is immaterial, redundant, scandalous, frivolous, vexatious, may prejudice a fair trial, departs from a previous pleading, or is otherwise an abuse of process. Rule 174 requires pleadings to contain a concise statement of material facts, and Rule 245(1) permits a party examined for discovery to correct or complete an earlier answer. Substantively, Bell's defence relied on the Notice Regime provisions in sections 41.25 and 41.26 of the Copyright Act, the ISP liability exemption in section 31.1, and the fair dealing exception in section 29. Bell also invoked the doctrine of copyright misuse, referencing the Supreme Court's observation in Euro-Excellence Inc v Kraft Canada Inc, 2007 SCC 37, that the doctrine's application in Canada remains undecided.

Reasoning and analysis

Justice McDonald held that striking a pleading under Rule 221(1)(a) requires it to be "plain and obvious" that a claim has no reasonable prospect of success, citing R v Imperial Tobacco Canada Ltd, 2011 SCC 42. On the scope of the Court of Appeal's leave to amend, the judge found that Millennium had read isolated paragraphs of the FCA decision out of context and concluded that the FCA's final conclusions at paragraphs 49–50 supported a broad scope for Bell's copyright misuse pleading. Turning to whether that defence disclosed a reasonable prospect of success, the court noted the novelty of the copyright misuse doctrine in Canada and declined to strike allegations concerning the propriety of Millennium's notices, the timing of litigation relative to Norwich orders (citing Voltage Pictures, LLC v Salna, 2025 FCA 131), the scope of the section 31.1 liability exemption (citing Rogers Communications Inc v Voltage Pictures, LLC, 2018 SCC 38), and the adequacy of Millennium's forensic software in accounting for fair dealing defences. The court also rejected Millennium's alternative argument that these paragraphs failed to plead material facts under Mancuso v Canada (National Health and Welfare), 2015 FCA 227, finding Millennium's submissions too generalized to meet its burden. On the question of withdrawn admissions, the court applied the formal/informal admission framework from Apotex Inc v Astrazeneca Canada Inc, 2012 FC 559, and found no unambiguous concession had been withdrawn regarding the propriety of notices, duplicate notices, the scope of the Notice Regime, an amended discovery answer under Undertaking 222, the characterization of uploading or downloading, or copyright ownership in the plaintiffs' films. On contrary positions, the court found that a 2021 demand letter was not a "pleading" capable of triggering Rule 221(1)(e), and that Bell's neutral stance in earlier Norwich order proceedings did not amount to a "diametrically opposed" position. On third-party references, the court struck paragraph 41 in its entirety as a bald, unsupported assertion, struck a sentence within paragraph 125 referencing submissions in unrelated litigation, and struck the list of other copyright-enforcement entities named in paragraph 3 as irrelevant to the claim. Finally, on the counterclaim, the court found Bell had pled sufficient material facts to support its abuse of process claim under Harris v GlaxoSmithKline Inc, 2010 ONSC 2326, and declined to strike Bell's request for declaratory and injunctive relief, noting the Further Amended Defence had cured the deficiencies previously identified by the Court of Appeal.

Ruling and overall outcome

The court granted Millennium's motion only in narrow part, largely siding with Bell. Paragraph 41 of the Further Amended Statement of Defence and Counterclaim was struck in its entirety, a specific sentence within paragraph 125 was struck, the list of other copyright-enforcement entities in paragraph 3 was struck, and the phrase "and an unlawful means conspiracy" was struck from paragraph 167, consistent with Bell's agreement at the hearing to withdraw that portion of its counterclaim. All other relief sought by Millennium, including the wholesale striking of Bell's copyright misuse defence and counterclaim for abuse of process, was refused. Bell was ordered to file a further amended pleading consistent with these narrow strikes within 15 days, with Millennium's Reply and Defence to Counterclaim due 30 days thereafter. No damages or monetary award was ordered; the decision states that costs of the motion shall be in the cause, meaning the amount, if any, will be determined based on the ultimate outcome of the litigation.