A Canadian internet service provider has been ordered to hand over the names and addresses of about 2,000 customers who allegedly downloaded movies online.

A Federal Court decision released Thursday compels Ontario-based TekSavvy to identify the customers allegedly linked to downloads of films by the U.S. production company Voltage Pictures, which is behind the likes of The Hurt Locker, Dallas Buyers Club and Don Jon.

As a result, those TekSavvy customers could eventually receive a letter from Voltage threatening legal action. Under the federal Copyright Act, statutory damages for non-commercial infringement range between $100 and $5,000.

But while the court sided with Voltage's efforts to go after copyright violators, it sought to protect against the company acting, "inappropriately in the enforcement of its rights to the detriment of innocent internet users."

"On the facts of this case, there is some evidence that Voltage has been engaged in litigation which may have an improper purpose. However, the evidence is not sufficiently compelling for this court at this juncture in the proceeding to make any definitive determination of the motive of Voltage," wrote prothonotary Kevin Aalto. A prothonotary is a judicial officer of the Federal Court with many of the powers of a judge.

Aalto ordered that before Voltage can send a letter to the alleged downloaders, it must return to court to get the wording of its communications cleared by a case management judge.

"In order to ensure there is no inappropriate language in any demand letter sent to the alleged infringers, the draft demand letter will be provided to the court for review," Aalto wrote.

"Any correspondence sent by Voltage to any subscriber shall clearly state in bold type that no court has yet made a determination that such subscriber has infringed or is liable in any way for payment of damages."

Case management to discourage copyright trolling

TekSavvy's lead counsel Nicholas McHaffie, a lawyer with Stikeman Elliott, said the safeguards the judge put in place would put Voltage on a "tight leash" and help to discourage “copyright trolling.”

“The concern is that in getting 2,000 names, the copyright holder can simply send out a bunch of letters that threaten legal proceedings and make outrageous demands for compensation and say you’re going to face a lawsuit if you don’t,” he said in an interview with CBC's The Lang & O’Leary Exchange.

Voltage has been accused of threatening lawsuits against thousands of BitTorrent users in the U.S. Typically internet users do not have the resources to fight the threat of a lawsuit, McHaffie said.

But the case management process will ensure that Voltage does not overstate its case in the letters to alleged downloaders, he said.

“There was a real concern that what we had here was not an occasion to enforce copyright, but rather an effort to send out a large number of letters and reap a bit of a reward using the process of the court. The court responded by saying ‘we want to be very careful before we allow that to happen in Canada,’” McHaffie added.

Voltage was also ordered to pay any costs that TekSavvy incurs in identifying the customers in the case, as well as legal fees.

Scare tactics

The Canadian Internet Policy and Public Interest Clinic, which had intervener status in the case, said it was "quite pleased" with the decision and expected Voltage wouldn't see any financial incentive in going after downloaders, particularly since it must pay TekSavvy's "substantial" costs.

CPPIC Director David Fewer said his read of the decision is that the court would not be eager to assign penalties at the higher range of what the Copyright Act allows.

"If Voltage is asking for figures in excess of [$100] I think the court is going to shut them down pretty darn quickly," Fewer said.

"And if that's the case I think Voltage is done because this is no longer a viable business model. And that's what the whole copyright troll thing is about, it's about using the court process to get settlements that are in excess of what you could get for [actual] damages to scare people into settling."

Fewer said he was happy that the court will vet any letters that Voltage sends to alleged copyright offenders, since they're typically designed to scare people into settling a case.

"A lot of people just pay the settlement rather than deal with the uncertainty and the anxiety of the claim and the model is predicated on that," he said.

"Certain people are risk averse and it's cheaper to settle rather than to hire a lawyer to deal with it, even if you are innocent."

Lawyers for Voltage did not immediately respond to an interview request.