Federal Court of Appeal allows reverse class action in digital copyright infringement

With the many ways by which copyright infringements are committed in the digital landscape, the Federal Court of Appeal confirmed that a reverse class action is still a proper remedy for copyright owners to enforce their claims.

In Salna v. Voltage Pictures LLC, the appellate court overturned the Federal Court’s decision which denied a respondent class proceeding, known as a reverse class action. Justice Donald Rennie, on behalf of the Court of Appeal, said “To remain relevant, the law must adapt to the evolving digital environment, the channels through which artistic endeavour is expressed and the means by which copyright may be infringed.”

Voltage Pictures LLC, a film production and distribution company, sought certification of a “reverse class action.” The company alleged that the class of respondents, represented by Robert Salna, committed copyright infringement by downloading and uploading five of Voltage’s films in a peer-to-peer file sharing protocol that enabled simultaneous distribution of the films over the internet.

Criteria to certify a class action

Under the Federal Courts Rules, the criteria to certify a class action are comprised of a reasonable cause of action, an identifiable class, common questions of law or fact, that a class proceeding is the preferable method of resolving the common issues and a suitable representative of the class. The lower court dismissed the motion for certification because Voltage failed to meet any of these criteria.

Errors committed by the Federal Court

The appellate court unanimously overturned the decision of the Federal Court. In determining whether Voltage disclosed a reasonable cause of action in its application, the Federal Court erred in analyzing the merits of the arguments rather than simply taking the facts as pleaded. The appellate court found that two of Voltage’s claims, direct infringement and authorizing infringement, were properly pleaded as reasonable causes of action.

The federal court also incorrectly applied a higher threshold in determining an identifiable class. According to the Court of Appeal, the standard that should have been applied is whether an identifiable class of two or more persons has “some basis in fact.” Voltage satisfied this test because its affidavit disclosed that Salna’s IP address “had been chosen,” suggesting that more than one IP address was identified in the proposed class.

The Federal Court also failed to properly determine the common questions of law or fact. The test asks a court to examine whether the resolution of a question is common to the proposed class members. The federal court focused instead on how the outcomes of the various questions may be different for various proposed class members.

Ultimately, the case was sent back to the lower court to determine whether a class proceeding is the preferrable method and whether there is a suitable representative of the class. But the appellate court did not close the doors to a reverse class action within the context of digital copyright infringement claims. In fact, the court even said that the “novelty” of the proposed class action is not a reason to deny the certification.