BMG Canada Inc. et al. v. John Doe et al., (2005) 334 N.R. 268 (FCA)

• Judge: Richard, C.J., Noël and Sexton, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: May 19, 2005
• Jurisdiction: Canada (Federal)
• Citations: (2005), 334 N.R. 268 (FCA);2005 FCA 193

BMG Can. Inc. v. John Doe (2005), 334 N.R. 268 (FCA)

MLB headnote and full text

Temp. Cite: [2005] N.R. TBEd. MY.036

MG Canada Inc., EMI Music Canada, a Division of EMI Group Canada Inc., Sony Music Entertainment (Canada) Inc., Univer­sal Music Canada Inc., Warner Music Canada Ltd., BMG Music, Arista Records Inc., Zomba Recording Corporation, EMI Music Sweden AB, Capitol Records, Inc., Chrysalis Records Limited, Virgin Records Limited, Sony Music Entertainment Inc., Sony Music Entertainment (UK) Inc., UMG Recordings, Inc., Mercury Records Limited and WEA Interna­tional Inc. (appellants/plaintiffs) v. John Doe, Jane Doe and All Those Persons Who Are Infringing Copyright in the plaintiffs' Sound Record­ings (defendants) Shaw Communica­tions Inc., Roger Cable Communications Inc., Bell Canada, Telus Inc., and Video­tron Ltee (third party respondents) and The Canadian Internet

Policy and Public Interest Clinic

(intervener)

(A-203-04; 2005 FCA 193)

Indexed As: BMG Canada Inc. et al. v. John Doe et al.

Federal Court of Appeal

Richard, C.J., Noël and Sexton, JJ.A.

May 19, 2005.

Summary:

The plaintiffs, collectively called the CRIA, were all members of the recording in­dustry in Canada. The CRIA moved for an or­der requiring five Canadian internet service providers (the ISPs) to identify certain of their customers who allegedly infringed copy­right laws by illegally trading in music downloaded from the internet.

The Federal Court, in a decision reported 250 F.T.R. 267, dismissed the motion. The CRIA appealed.

The Federal Court of Appeal dismissed the appeal, without prejudice to the plaintiffs' right to commence a further application for disclosure of the identity of the "users" taking into account the court's reasons for judgment.

Administrative Law - Topic 3202

Judicial review - General - Scope or stan­dard of review - The Federal Court of Ap­peal stated that "the standard of review on questions of law, such as the correct tests to be applied with respect to the granting of equitable bills of discovery or the inter­pretation of the Federal Court Rules, is cor­rectness. The standard of review with re­spect to findings of fact involves a con­sideration of whether the judge made a palp­able and overriding error" - See para­graph 16.

Copyright - Topic 4555

Infringement of copyright - Acts not con­stituting an infringement - Music (incl. peer to peer file sharing) - On a discovery motion, the Federal Court discussed whether peer to peer (P2P) file sharing using programs such as "KaZaA" consti­tuted copyright infringe­ment - The inter­ested internet service providers (ISPs) appealed - The Federal Court of Appeal held that the findings were prema­ture and should the action proceed, it should be done on the basis that no findings were made to date on the issue of infringe­ment - See para­graphs 46 to 54.

Equity - Topic 1142

Equitable relief - Practice - Bill of dis­covery - The Federal Court of Appeal stated that an equitable bill of discovery was an equitable remedy that was discre­tionary in nature - The concept was ac­cepted by the court in 1998 in Glaxo v. M.N.R. where it was stated that "The equit­able bill of discovery is in essence a form of pre-action discovery ... It is of ancient origin. It developed alongside the procedures for discovery which are ordi­narily available in the course of litigation and which, it is worth noting, also orig­i­nated in the courts of equity ... This rem­edy permits a court, acting through its equit­able jurisdiction, to order discovery of a person against whom the applicant for the bill of discovery has no cause of action and who is not a party to contemplated liti­gation. While it appears that an indepen­dent action for discovery cannot be brought against a person who is in the posi­tion of a 'mere witness' or bystander to the cause of action, the case law sug­gests that a bill of discovery may be issued against an individual who is in some way connected to or involved in the miscon­duct" - See paragraph 29.

Equity - Topic 1142

Equitable relief - Practice - Bill of dis­covery - The plaintiffs, collectively called the CRIA, were all members of the record­ing industry in Canada - The CRIA moved for an order requiring five Canadian inter­net service providers (the ISPs) to identify certain of their customers who allegedly infringed copyright laws by illegally trad­ing in music downloaded from the internet - The Federal Court of Appeal held that the plaintiffs could invoke either rule 238 (examination of nonparties) or equitable bills of discovery and in either case, the legal principles relating to equitable bills of discovery would be applicable - See para­graphs 28 to 30.

Equity - Topic 1142

Equitable relief - Practice - Bill of dis­covery - The Federal Court of Appeal held that the first step in the test for granting an equitable bill of dis­covery was that the ap­pli­cant must establish a bona fide claim against the proposed defendants (as op­posed to a prima facie case) - The court adopted the following further criteria as set out by the motions judge in this case: the per­son from whom discovery is sought must be in some way involved in the mat­ter under dispute, he must be more than an innocent bystander; the person from whom dis­covery is sought must be the only prac­tical source of infor­mation available to the applicants; the person from whom dis­cov­ery is sought must be reason­ably com­pen­sated for his expenses arising out of com­pliance with the dis­covery order in addi­tion to his legal costs; the public inter­ests in favour of disclos­ure must out­weigh the legitimate privacy concerns - The court re­iterated that the same prin­ciples applied to an applica­tion under rule 238 for exam­i­nation in a John Doe action - See para­graphs 28 to 35.

Practice - Topic 3603

Evidence - Affidavits - General - Contents of - The plaintiffs, collectively called the CRIA, were all members of the recording in­dustry in Canada - The CRIA moved for an order requiring five Canadian internet service providers (the ISPs) to identify certain of their customers who allegedly infringed copyright laws by illegally trad­ing in music downloaded from the internet - A motions judge ruled that the affidavits relied on by the plaintiffs were deficient in that they failed to comply with rule 81 (i.e., they contained hearsay with no grounds advanced for accepting that hear­say) - CRIA appealed - The Federal Court of Appeal dismissed the appeal - The court stated that "in particular, the evidence purporting to connect the [customers] pseudonyms with the IP addresses was hear­say thus creating the risk that innocent persons might have their privacy invaded and also be named as defendants where it is not warranted. Without this evidence there is no basis upon which the motion can be granted and for this reason alone the appeal should be dismissed" - See para­graphs 20 to 22.

Practice - Topic 4230

Discovery - Examination - Persons who may be examined - Nonparties - The plain­tiffs collectively called the CRIA were all members of the Canadian recording indus­try in Canada - The CRIA applied for an or­der requiring five Canadian internet service providers (the ISPs) to identify certain of their cus­tomers (internet users) who allegedly infringed copyright laws by illegally trad­ing in music downloaded from the internet - The plaintiffs discovered that the internet users used Internet Protocol addresses (IP addresses) registered with the ISPs and therefore sought to compel the ISPs to disclose the names of the cus­to­mers who used these IP addresses under Fed­eral Court rule 238 (i.e., the rule res­pecting examination of nonparties) - The ISPs argued that rule 238 was not appli­cable in this situation - The Federal Court of Appeal disagreed, holding that because the issue inevitably fell within the words in rule 238(1) as being "an issue in the ac­tion", rule 238 was broad enough to permit discovery in cases such as this - See para­graphs 23 to 27.

Practice - Topic 4230

Discovery - Examination - Persons who may be examined - Nonparties - [See second and third Equity - Topic 1142 ].

Practice - Topic 4601

Discovery - Production of documents by nonparties - General - The plaintiffs collec­tively called the CRIA were all members of the Canadian recording industry in Can­ada - The CRIA, relying on rule 233 (pro­duction of documents by nonparties), ap­plied for an order requiring five Cana­dian internet service providers (the ISPs) to iden­tify certain of their cus­tomers (internet users) who allegedly infringed copyright laws by illegally trad­ing in music down­loaded from the internet - A motions judge rejected CRIA's request on the basis that rule 233 presupposed the existence of spec­i­fied documents and in this case the docu­ments - CRIA appealed - The Federal Court of Appeal dismissed the appeal - The court stated that the "information sought by the plaintiffs may be buried in logs and tapes but is not presently in a readable format. Since the documents in a readable format do not currently exist and would have to be created, rule 233 has no application. The rule contemplates the pro­duction of documents which are 'in the pos­session of a person'. It cannot be said that documents which do not exist are in the possession of a person" - See para­graphs 17 to 19.

Telecommunications - Topic 3545

Internet (World Wide Web) - Internet ser­vice providers and site operators - Dis­clos­ure of information (incl. internet proto­col addresses) - The plaintiffs collectively called the CRIA were all members of the Ca­nadian recording industry in Canada - The CRIA applied for an order requiring five Canadian internet service providers (the ISPs) to identify certain of their cus­tomers (internet users) who allegedly in­fringed copyright laws by illegally trad­ing in music downloaded from the internet - The plaintiffs discovered that the internet users used Internet Protocol addresses (IP addresses) registered with the ISPs and therefore sought to compel the ISPs to dis­close the names of the customers who used these IP addresses - A motions judge re­fused to order disclosure - The CRIA ap­pealed - The Federal Court of Appeal dis­missed the appeal, but without prejudice to the plaintiff's right to commence a further application for disclosure of the identity of the "users" taking into account the courts reasons for judgment - See paragraphs 1 to 42.

Telecommunications - Topic 3545

Internet (World Wide Web) - Internet ser­vice providers and site operators - Dis­clos­ure of information (incl. internet proto­col addresses) - The plaintiffs, collectively called the CRIA, were all members of the recording industry in Canada - The CRIA moved for an order requiring five Cana­dian internet service providers (the ISPs) to identify certain of their customers who al­legedly infringed copyright laws by illegal­ly trading in music downloaded from the in­ternet - The Federal Court of Appeal dis­cussed the privacy issues at stake - The court stated that if a disclosure order were to be granted " ... specific directions should be given as to the type of informa­tion disclosed and the manner in which it can be used. In addition, it must be said that where there exists evidence of copy­right infringement, privacy concerns may be met if the court orders that the user only be identified by initials, or makes a confiden­tiality order." - See paragraph 45.

Telecommunications - Topic 3545

Internet (World Wide Web) - Internet ser­vice providers and site operators - Dis­clos­ure of information (incl. internet proto­col addresses) - The Federal Court of Ap­peal, per Sexton, J.A., stated that mod­ern tech­nology "must not be allowed to obliter­ate those personal property rights which so­ciety has deemed important. Although privacy concerns must also be considered, it seems to me that they must yield to pub­lic concerns for the protection of intel­lectual property rights in situations where infringement threatens to erode those rights. Thus, in my view, in cases where plaintiffs show that they have a bona fide claim that unknown persons are infringing their copyright, they have a right to have the identity revealed for the pur­pose of bringing action. However, caution must be exercised by the courts in ordering such disclosure, to make sure that privacy rights are invaded in the most minimal way" - The court cautioned, however, that a lengthy delay between an investigation and a request for information might justify refusing to order disclosure - See para­graphs 41 and 42.

Cases Noticed:

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1, refd to. [para. 16].

Indian Manufacturing Ltd. et al. v. Lo et al. (1996), 199 N.R. 114; 68 C.P.R.(3d) 174 (F.C.A.), refd to. [para. 26].

Irwin Toy v. Doe, [2000] O.J. No. 3318 (Sup. Ct.), refd to. [para. 27].

Loblaw Companies Ltd. v. Aliant Telecom Inc. et al., [2003] N.B.J. No. 208 (Q.B.), refd to. [para. 27].

British Steel Corp. v. Granada Television Ltd., [1981] 1 All E.R. 417 (C.A.), refd to. [para. 28].

Glaxo Welcome Plc v. Minister of National Revenue (1998), 228 N.R. 164; 81 C.P.R.(3d) 372 (F.C.A.), refd to. [para. 29].

Norwich Pharmacal Co. et al. v. Customs and Excise Commissioners, [1973] 2 All E.R. 943; [1974] A.C. 133 (H.L.), refd to. [para. 32].

Straka v. Humber River Regional Hospital et al. (2000), 137 O.A.C. 316; 51 O.R.(3d) 1 (C.A.), refd to. [para. 33].

Johnston's Restaurants Ltd., Re, [1980] P.E.I.J. No. 34 (C.A.), refd to. [para. 33].

Canadian Private Copying Collective v. Canadian Storage Media Alliance et al. (2004), 329 N.R. 101; 2004 FCA 424, refd to. [para. 50].

CCH Canadian Ltd. et al. v. Law Society of Upper Canada (2004), 317 N.R. 107; 2004 SCC 13, refd to. [para. 51].

Statutes Noticed:

Federal Court Rules (1998), rule 81 [para. 20]; rule 233(1) [para. 18]; rule 238 [para. 23].

Counsel:

Harry Radomski, Richard Naiberg and Peter Ruby, for the appellants;

James Hodgson and Jeffrey Percival, for the respondent, Bell Canada;

Wendy Matheson and Amanda Kemshaw, for the respondent, Rogers Cable;

Charles Scott and Rocco Di Pucchio, for the respondent, Shaw Communications;

Joel Watson, for the respondent, Telus Communications;

J. Serge Sasseville, for the respondent, Videotron;

Howard Knopf and Mr. Alex Cameron, for the inter­vener, CIPPIC.

Solicitors of Record:

Goodmans LLP, Toronto, Ontario, for the appellants;

Hodgson Shields DesBrisay O'Donnell LLP, Toronto, Ontario, for the re­spon­dent, Bell Canada;

Torys LLP, Toronto, Ontario, for the re­spondent, Rogers Cable;

Lax O'Sullivan Scott LLP, Toronto, Ontario, for the respondent, Shaw Communications Inc.;

Bennett Jones LLP, Toronto, Ontario, for the respondent, Telus Communications Inc.;

J. Serge Sasseville, Montreal, Quebec, for the respondent, Vidéotron Ltée;

Macera & Jarzyna/Moffat & Co., Ottawa, Ontario, for the intervener, CIPPIC.

This appeal was heard at Toronto, Ontario, on April 20 and 21, 2005, before Richard, C.J., Noël and Sexton, JJ.A., of the Federal Court of Appeal. Sexton, J.A., delivered the following decision on May 19, 2005.