Executive Summary: Key Legal and Evidentiary Issues

• Reverse class action certification was denied due to an unworkable litigation plan and misuse of statutory notice provisions

• The court ruled that the notice-and-notice regime under the Copyright Act cannot be used to deliver litigation notices or collect information

• Voltage failed to show that a class proceeding was preferable to individual litigation given the need for individualized factual determinations

• Being an internet subscriber alone was deemed insufficient to establish copyright infringement or authorization

• The Federal Court of Appeal confirmed that flaws in the litigation plan could not be remedied through reapplication

• Robert Salna, the proposed representative respondent, was awarded substantial costs for successfully defending against the proceeding

Facts and outcome of the case

Background and parties involved

Voltage Pictures, LLC and related film production companies sought to initiate a reverse class action in Canada against a large group of unnamed internet subscribers, alleging they had illegally downloaded and shared five copyrighted films using the BitTorrent file-sharing network. The proposed representative respondent was Robert Salna, a landlord who provided internet service to tenants in rental units. His IP address had been identified by Voltage's forensic software as one allegedly involved in infringing activity.

The proposed respondent class initially consisted of over 55,000 individuals but was later reduced to fewer than 900 by the time of the certification hearing. The appellants aimed to obtain statutory damages and injunctive relief under the Copyright Act. They intended to use the statutory notice-and-notice regime to notify class members and facilitate communication, opt-outs, and mitigation of damages—effectively replacing the need for individual Norwich orders to identify users.

Litigation plan and statutory conflict

Voltage’s litigation plan involved sending out notices under section 41.25 of the Copyright Act, which would include not only the required notice of infringement but also details about the class proceeding, a request to contact class counsel, and a hyperlink to related legal documents. The courts found this proposed use of the notice-and-notice regime to be contrary to subsection 41.25(3), which prohibits settlement offers, payment demands, or requests for personal information in such notices.

The Federal Court held that Voltage’s plan improperly attempted to convert a deterrence-based statutory mechanism into a litigation tool, overstepping what Parliament had intended. Additionally, the court ruled that the plan’s funding arrangements for class counsel were insufficient and that the attempt to maintain class member anonymity through ISP-generated reference codes lacked legal support.

Findings on class action preferability

Both the Federal Court and the Federal Court of Appeal examined whether a class proceeding would be the preferable method for resolving the common legal questions. The appellate court emphasized that, following recent jurisprudence, being an internet subscriber is not enough to establish liability. Instead, proof of direct involvement in the infringing act or control over the infringer is necessary. Given this, the common issues identified by Voltage were found to be minor in the context of the entire claim, with individualized inquiries predominating.

The Court of Appeal concluded that a class proceeding would not materially advance the litigation and was therefore not preferable. It emphasized that individualized fact-finding would still be required to determine liability in each case, undermining the purpose of class action efficiency.

Outcome and costs

The Court of Appeal upheld the Federal Court’s rejection of class certification and went further by removing the option to reapply with a revised plan. It dismissed the appeal by Voltage and granted Salna’s cross-appeal in part, finalizing the dismissal of the proceeding.

The court awarded Salna a lump sum of $50,700 in costs for the Federal Court proceedings and additional costs for the appeal, assessed at the mid-point of Column IV of Tariff B of the Federal Courts Rules. The court also declined to award costs to or against the intervening ISPs or the public interest clinic. The decision marked a firm rejection of the attempt to use procedural mechanisms to pursue mass copyright enforcement without meeting the evidentiary and procedural standards required for class actions.