The launch of the Canadian copyright notice system earlier this year raised serious concerns as Rightscorp, a U.S.-based anti-piracy company, sent notices that misstated Canadian law and demanded that users pay to settle claims. The misuse of the Canadian system was the result of the government’s failure to establish regulations prohibiting misleading content or the use of notice-and-notice to demand settlements. Despite more than a year of work on potential regulations – including possible costs to rights holders for sending notifications – Industry Minister James Moore abandoned the process, implementing the system with no costs, no limitations on notice content, no restrictions on settlement demands, and no sanctions for the inclusion of false or misleading information. The government’s backgrounder says that the law “sets clear rules on the content of these notices”, however, it does not restrict the ability for rights holders to include information that goes beyond the statutory minimum.

The furor over the Rightscorp notices died down in recent weeks, but now another U.S. anti-piracy firm is flooding the Canadian market with thousands of notices, all seeking payment for alleged infringements. CEG TEK, a well-known U.S. firm, is sending notices that reference Canadian copyright law, but use the notice-and-notice system to pressure recipients into paying large settlements. A blog reader sent along a sample notice posted below (TekSavvy has posted a similar one they received).

The notice raises many concerns. First, CEG TEK is using the Canadian notice system to send thousands of demand letters at no cost. In fact, the cost is effectively borne by consumers, since Internet providers are required to forward the notifications and will ultimately pass along the charges in the form of higher access fees. The government was asked to include a fee, but having declined to do so, effectively invited abuse of the system.

Second, the notice references Canadian copyright law, but still may leave users with an inaccurate impression. Users’ personal information has not been disclosed (ie. CEG TEK does not know who receives the notices unless the recipient tells them by settling), the settlement demands (which are apparently US$150 per notice) bear no correlation to a likely award, the maximum statutory damages of C$5000 is for all infringements (not per infringement as implied in the notice), and the likelihood of non-statutory damages referenced in the notice is incredibly remote.

All of this could have been avoided had the government established regulations with the notice-and-notice system as many stakeholders urged Moore to do. Instead, the notice is system is again being abused, leading to significant ISP costs and settlement demands to thousands of Canadians. The solution is obvious: implement the missing regulations by establishing an appropriate fee for forwarding notices, prohibit the use of notices to demand settlements, and give ISPs the leeway to refuse to forward notices where they contain misleading or inaccurate information.

The sample CEG TEK notice is posted below:

Pursuant to the provisions of Sections 41.25 and 41.26 of the Canada Copyright Act, please electronically forward as soon as feasible the entire copyright infringement notice set forth below to the ACCOUNT HOLDER OF IP ADDRESS xxx.xxx.xxx.xxx at 2015-01-31 xx:xx North American Eastern Time and inform us on behalf of Rights Owner once it has been forwarded or (if applicable) the reason it was not possible for you to do so.***



February 26, 2015



NOTICE TO MANAGED NETWORK SYSTEMS ACCOUNT HOLDER IP ADDRESS xx.xx.xx.xx at 2015-01-31 xx:xx North American Eastern Time Re: Notice of Unauthorized Use of Copyright Owned by Paperstreet Media LLC, Case #: XXXXX



This notice is intended solely for the primary Managed Network Systems service account holder. CEG TEK International (“CEG”) is the agent for Paperstreet Media LLC (hereinafter “Rights Owner”) whose address is 14 NE 1st Ave Suite 304, Miami, FL 33132, US. All communications with Paperstreet Media LLC with respect of this notice should be made to our attention as its agent. CEG’s contact information is shown below. Rights Owner owns all right, title and interest, including copyrights, in and to the work listed below (hereinafter the “Work”). (Some individuals may find certain words in titles of works to be offensive. CEG apologizes in advance if this is the case.) Your Internet account has been identified as having been used in the unauthorized copying, performance, and/or distribution, via peer-to-peer sharing, of the Work listed below. (Note that the time/date noted is the time/date that the unauthorized copying was identified. The actual downloading, copying, and/or distribution through your Internet account may have begun or occurred significantly earlier.)



Copyright Owner: Paperstreet Media LLC Unauthorized File Name: *****mp4 Unauthorized Hash: xxxxx Unauthorized File Size: xxx Unauthorized Protocol: BitTorrent Timestamp: 2015-01-31 xx:xx North American Eastern Time Unauthorized IP Address: ***.*.***.*** Unauthorized Port: 51413 The following files were included in the unauthorized copying, performance, and/or distribution: File 1: ****.mp4



Paperstreet Media LLC is the sole and exclusive owner and distributor of the Work in Canada, and at no time have you, or anyone using your account, received authorization or consent to download or distribute Rights Owner’s exclusive property.



Your ISP has forwarded this notice to you pursuant to provisions of the Canada Copyright Act.



In Canada, the unauthorized copying, performance, and/or distribution of Rights Owner’s Work is illegal and is subject to civil sanctions (with statutory damages of up to $5,000 or non-statutory damages that could be higher) and/or criminal sanctions, and is a violation of the Canada Copyright Act (R.S.C., 1985, c. C-42). The recent amendments to the Copyright Act, which came into force on November 2012, have confirmed Rights Owner’s right to have its copyright protected in Canada.



Moreover, such copying, performance and/or distribution of unauthorized works may also violate (i) the Berne Convention for the Protection of Literary and Artistic Works, (ii) the Universal Copyright Convention, (iii) bilateral treaties with other countries (including Canada), and/or (iv) the copyright laws of Canada.



If you have questions about your legal rights, you should consult with your own legal counsel (i.e., barrister, solicitor, lawyer, and/or attorney).

CEG HAS BEEN AUTHORIZED BY RIGHTS OWNER TO OFFER A SETTLEMENT SOLUTION TO RESOLVE THIS MATTER AND PREVENT LEGAL ACTION.



You have until Saturday, March 28, 2015 to access the settlement offer and settle online. To access the settlement offer, please visit https://www.copyrightsettlements.com/ and enter Case #: xxxx and Password: xxx. To access the settlement offer directly, please visit https://www.copyrightsettlements.com/?u=xxxxx&p=xxx



Settlement Information: Direct Settlement Link: https://www.copyrightsettlements.com



If this matter is not resolved by the date shown above, the original settlement offer will no longer be an option and any future resolution may require an increased payment from you.

In the event that Rights Owner proceeds with legal action against you, you will be required to produce all relevant documents, including electronic documents and files that bear on Rights Owner’s claim against you. Until this matter is resolved, whether by settlement or otherwise, we require you to accept this as written notice to preserve any and all hard drives or other means of electronic storage used with your above referenced IP address and to take no steps whatsoever to remove, erase, discard, conceal, destroy or delete from any means of electronic storage any evidence of piracy and/or other illegal or unauthorized downloading and distribution of Rights Owner’s Work.



This notice is NOT a bill or invoice. It is a notice made on behalf of Rights Owner of (i) a potential claim against you and/or those who you have allowed access to your Internet account for infringement of the Rights Owner’s copyright in the Work, and (ii) an opportunity to completely resolve that claim now.

AGAIN, IF YOU HAVE QUESTIONS ABOUT YOUR LEGAL RIGHTS, YOU SHOULD CONSULT WITH YOUR OWN LEGAL COUNSEL (I.E., BARRISTER, SOLICITOR, LAWYER, AND/OR ATTORNEY).

Nothing contained or omitted from this correspondence is, or shall be deemed to be either a full statement of the facts or applicable law, an admission of any fact, or waiver or limitation of any of Rights Owner’s rights or remedies, all of which are specifically retained and reserved.

The information in this notice is accurate. CEG has a good faith belief that use of the material in the manner complained of herein is not authorized by the copyright owner, its agent, or by operation of law. CEG and the undersigned declare under penalty of perjury, that CEG is authorized to act on behalf of Paperstreet Media LLC.



Sincerely,

CEG TEK International 8484 Wilshire Boulevard, Suite 515 Beverly Hills, CA 90211 United States of America

Toll Free: +1-877-526-7974

Email: support@cegtek.com

Website: www.copyrightsettlements.com