Given recent reports that a Montreal-based company has captured data on one million Canadians who it says have engaged in unauthorized file sharing, it seemed like it was only a matter of time before widespread file sharing lawsuits came to Canada. It now appears that those lawsuits are one step closer as TekSavvy, a leading independent ISP, has announced that it has received a motion seeking the names and contact information of thousands of customers (legal documents here). To TekSavvy’s credit, the company insists that it will not provide subscriber information without a court order and it has sent notices to affected customers.

The notifications have generated considerable online discussion with some recipients indicating that they have been wrongly targeted. Others wonder what comes next. As I suggested in my posts on this issue, the next steps likely include the following:

1. The Federal Court will hold a hearing next week on the question of whether it should order the disclosure of the customer information. Subscribers affected by the proposed order may contest the motion and others might appear to ensure that privacy issues are fully considered.

2. Should the court order the disclosure of the subscriber information, prior experience suggests that Voltage will follow with legal demand letters offering settle before filing a copyright infringement lawsuit. The letter will likely indicate that the subscriber could face thousands in liability (though there is now a cap of $5000 in liability for non-commercial infringement with a judge able to award as little as $100). Some subscribers may choose to pay in order to settle, while others – particularly those who believe the claims are inaccurate or those looking at the government’s recent copyright reforms that discouraged such lawsuits – will reject the offer.

3. The big question is whether Voltage will proceed with actual lawsuits for those that refuse to settle. It is certainly within its rights to do so, however, the government has expressed concern with “the threat of major penalties that hang over Canadians who infringe copyright for non-commercial purposes.” As I described in detail in a recent column, Canada’s statutory damages rules now distinguish:

between commercial infringement (which still carries liability of up to $20,000 per infringement) and non-commercial infringement, which now features a maximum liability of $5,000 for all infringements. While $5,000 is still very expensive for a downloaded movie, the law permits judges to award damages as low as $100 in such cases. In fact, the law instructs judges to consider “in the case of infringements for non-commercial purposes, the need for an award to be proportionate to the infringements, in consideration of the hardship the award may cause to the defendant, whether the infringement was for private purposes or not, and the impact of the infringements on the plaintiff.”

The new statutory damages rules took effect in early November and would apply to these lawsuits. Voltage could seek actual damages rather than statutory damages, but those would likely be even lower than $100 for the download of a single movie. All of this could lead to clogged courts as Voltage spends thousands of dollars in lawsuits in the hopes of recovering hundreds from alleged copyright infringers.