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TekSavvy Customers Win Big in Federal Court

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After weeks of getting bashed in the blogosphere, TekSavvy emerged from the hearing on Monday in the Federal Court with a big bright check-mark against the privacy problem, CIPPIC's involvement, the mapping of IPs against human beings, and the what-have-you-done-for-us-lately problem.

Let's summarize the issues that have framed the debate so far.

The big beef about TS since mid-December has been that it hasn't done enough to protect its customers -- especially its customers' privacy. And what it should have done is "oppose" the Voltage motion. Few commentators have explained in any detail, if at all, how that would work. That includes Howard Knopf, who had the following to say in his post on Friday:

If an ISP can successfully and inexpensively oppose an inadequately documented attempt to breach its customers' privacy, then why should it be able to walk away and leave its customers on their own and just tell them they can hire their own lawyers?

First, "if" an ISP can find a cheap way to oppose, etc. is worth nothing as a statement of empirical value. If I could fly, I'd spend a lot more time hiking in southern California. Second, let's update the "inexpensive" part of this with real numbers: Nick McHaffie revealed in court Monday that TS will be seeking $190,000 in costs from Voltage. Marc Gaudrault assures me this figure represents a very conservative accounting of his legal and technical costs to date -- and this case is far from over. Third, there's no way in our system you can oppose a motion for disclosure purely on privacy grounds.

Several factors led critics to reach wrong-headed conclusions about what TS was or was not doing for its customers. Many took to heart Marc's statement that TS was not going to "oppose" the Voltage motion. In retrospect, he probably regrets emphasizing this position when TS was in fact working against Voltage on several fronts. Moreover, because that assertion was only the tip of a much larger iceberg, many of these same folks also assumed they knew what TekSavvy's legal strategy was: cave in and wait for the court order to arrive, then drop all that personal customer info into Voltage's lap.

For anyone with lingering doubts about whether Marc gives a shit about his customers, Monday's hearing should provide a major wakeup call. But before we get to the courtroom drama, let me raise three points that need to be hammered home:

Notice to customers. For reasons I still don't get, the critics chose to ignore one obvious way in which TS stuck its neck out to help its customers. They provided notice to everyone who appeared on the charge list -- something they were under absolutely no obligation to do. That took a lot of work at a time when TS and its lawyers were hard pressed preparing for the December 17 hearing. This notice provided a service in particular to customers who did not download any of Voltage's property, giving them a heads-up they might be dragged into a proceeding despite their putative innocence.

The common carrier defence. I wish people like my friend and colleague Dwayne Winseck would stop reminding me I raised the eventuality that TS might see its neutrality eroded if it opposed the Voltage motion. I cited differing legal positions on this point; I did not think there was a pat answer, even if I said there might be some risk involved. In any case, that was my point, not TekSavvy's. I don't recall Marc or his colleagues hiding behind the common carrier defence and refusing to come out because they might be censured by the court, or transformed into a defendant. In any case, whatever they thought, being a carrier with a safe harbour didn't stop TS from working against Voltage on behalf of its whole customer base from the get-go.

The annointed guardian of Canadian privacy. One of the most frustrating themes in the recent debate has been the insistence that TS must somehow not merely stand up for its customers, but go on the offence as a privacy advocate. Whose privacy are we talking about anyway? Naturally, everyone wants to see the putatively innocent protected from any unjust disclosures. As for those who might turn out to be guilty, who say their privacy wouldn't be respected as far as public disclosure is concerned?

Imagine a John Doe who has shared and infringed, and would have to suffer some loss of privacy. If you were that John Doe, would privacy be your biggest worry? Personally, I'd be much more concerned about a) getting good, cheap legal advice, and b) facing a $5,000 payment in statutory damages. My belief now -- which I can't prove -- is that privacy has been a stand-in for other elements of the law some critics just don't like.

Be that as it may, it was never TekSavvy's job to rise in court and argue to the presiding judge that our copyright law is defective, or that the activities set in motion in November somehow amounted to an unlawful or unethical violation of customer privacy. As we'll see, setting up TekSavvy as a kind of privacy traitor ran afoul of what the ISP was actually doing behind the scenes.

What happened in the courtroom

The second round Monday was another quiet affair, with barely two dozen people in the room. The hearing started almost 30 minutes late, and Mr Justice O'Keefe was replaced by his colleague, Mr Justice Mandanin.

In the first hearing, TS counsel Nick McHaffie offered three reasons for adjourning the hearing without consideration of Voltage's motion: errors in the evidence that needed cleaning up; providing defendants more time for notice and preparation; and giving CIPPIC a chance to make its case for standing in the proceeding. Despite the fact O'Keefe cited the errors as his grounds for granting an adjournment, Monday's hearing began with arguments from CIPPIC's Toronto agent, Felix Tang, as to why CIPPIC should be involved.

CIPPIC's case. Tang had an opportunity to speak to some important substantive reasons as to why CIPPIC was a qualified friend of the court. For one thing, CIPPIC has had lots of experience addressing public interest issues before the courts, quasi-judicial tribunals like the CRTC and parliamentary committees. Tang also made a point of reassuring the judge that a further adjournment would not prejudice the plaintiff's case -- a point that turned out to be both contentious and important in the final reckoning. Tang concluded by noting CIPPIC was looking for the right to cross-examine and would work with both sides to make its role effective.

Unsurprisingly, James Zibarras, counsel for Voltage, was having none of this. He went so far as to charge that, since TekSavvy said it had no views on the Voltage motion, their counsel shouldn't be allowed to argue on behalf of CIPPIC's involvement - a notion the judge disposed of quickly. A remarkable amount of time was subsequently spent by both sides on procedural minutiae regarding the timing of CIPPIC's involvement. McHaffie accused Zibarras of accusing the other parties of "breaches of civility," a notion McHaffie didn't take kindly to. The calendar was brought up repeatedly. For his part, Zibarras argued that CIPPIC had behaved badly as an intervenor because they had left notice of their intended involvement to the last moment. McHaffie retorted it was counsel for Voltage who had behaved badly, since he ignored CIPPIC's overtures in the apparent hope that would make them go away.

Tedious procedurals turn into major revelations

McHaffie then dropped a bombshell. Make that two bombshells. He first noted the parties should be in no rush to get the issues settled, especially since it was not at all clear whether Voltage was in fact embarked on a bona fide path to litigation. Then McHaffie set aside this haste-makes-waste concept to discuss some paperwork we'd all forgotten in the moment: the court order that will ultimately be the tool that pries the customer information out of TekSavvy. McHaffie complained right back at Zibarras that despite a request made as far back as December 11, no draft of the court order had been forthcoming.

Why did that matter?

Three reasons: timing, costs and wording. The timing didn't get much play, nor much reaction from us spectators. Unlike the point on costs, which made jaws drop. McHaffie revealed for the first time that TekSavvy intends to claim costs from Voltage to the tune of $190,000. And that wasn't even the most dramatic element. McAffie added almost as an afterthought that his client would need to get paid before agreeing to the final wording of the draft court order.

I want to emphasize what should be obvious by now. TekSavvy has spent a lot of money, directly and indirectly, in not merely following the letter of the law but also in helping defend its customers' interests. Moreover, this case ain't over by a long shot. One other thing. The cost figure is one reason I've believed it was absurd for critics to lay the whole privacy battle at TekSavvy's doorstep. TekSavvy isn't Bell or Rogers and doesn't have limitless access to capital.

I learned something else very telling from the discussion surrounding the eventual court order. That concerns the process whereby counsel for the opposing parties are expected to work together on the court order. This process is obviously a shrewd way to outsource work the court would otherwise be burdened with. What I didn't appreciate, however, is that each side gets to write in what it wants to protect. And lo and behold, McAffie made it very clear he intends to put language into the draft order that will protect the privacy of potential defendants.

From that point, two issues dominated the exchanges. One concerned the seesaw battle between the two lawyers over whether granting a second adjournment would prejudice the plaintiff's welfare, in particular by allowing file-sharers to keep distributing the likes of Balls to the Wall to "millions of people around the planet." The other issue concerned the state of the evidence - something the judge had strong views on in his closing remarks.

Adjournment and prejudice to the plaintiff

It was clear from the tone of the exchanges Monday that Voltage was desperate to cut short any further delays. Neither McHaffie nor Mandanin, however, was in a mood to be rushed. Nor was the judge persuaded that the plaintiff was at risk of losing much if he did grant the additional adjournment.

Zibarras went so far as to say in the oral exchanges that part of the risk to Voltage's welfare arose from the sheer presence of downloaded movie files on the computers of offending customers. More delays would mean more opportunities for Voltage's movies to drift back onto the Internet and around the globe. The problem with this alarmist view, of course, is that a movie file sitting on a computer won't go anywhere unless the customer launches her BitTorrent client, selects the movie file, goes online and ensures she's opened some bandwidth on the uplink so packets from her computer can join a swarm in progress.

Zibarras was chastised by the judge for speculating as to whether Mr Justice O'Keefe actually intended for the Voltage motion to go forward Monday. Zibarras kept coming at prejudice from every conceivable angle - including what he saw as conspiratorial conversations between TekSavvy and CIPPIC. In his view, CIPPIC missed its chance through its own failure to make timely contact with the parties. And TekSavvy and CIPPIC were making up for the fact they had no case by dragging it out using procedural tactics.

Marc and McHaffie then pulled a genius idea out of a hat (unless they'd been planning it all along). Even though I don't see how Mandanin could possibly have been inclined to buy Voltage's prejudice argument, TekSavvy offered on the spot to let Zibarras write a further warning letter to the customers on the master list, which TS would then distribute (without of course having to give away any customer information).

Bottom line

That offer seemed to please everyone and seal the deal for Mandanin. The moment the lawyers were finished, the judge said without missing a beat or hinting at misgivings that he was granting the adjournment. While this decision does not guarantee CIPPIC will be given standing by the court, I would be very surprised if it turned out otherwise. Mandanin then noted this case is too important to be rushed; that the court would benefit from some expert guidance; and that he wants to ensure that they "get it right."

The judge also warned that no one should assume there's an automatic connection between a numeric IP and an alleged infringer - despite the fact that the evidentiary threshold is now much lower under our new legislation. The court, he said, has to be "well informed" and not take for granted that the evidence gathered so far proves that copyright in the Voltage movies has in fact been infringed.

I was especially struck by the judge's concern that he may wake up one day to find 1,000 defendants elbowing their way into his court. A lot of people have commented on the unprecedented scale of the Voltage action -- and they are now joined by the presiding judge, who said the court must have a "clear picture" of how this case is going to proceed. Further to this issue of scale, Mandanin added that this case will not be decided in a few hours, but will require a special, multi-day hearing (which btw may be heard by yet another Federal Court judge).

The net effect of everything we heard from the bench Monday is that Voltage left without winning any victories - on CIPPIC's involvement, on the further adjournment, on the reliability of the evidence, on the putative risk to the plaintiff's welfare or anything else substantive or procedural. As the judge left the courtroom, everyone looked around in a happy state of shock. With his quiet remarks lasting barely ten minutes, Mr Justice Mandanin had vindicated TekSavvy and assured its customers that their privacy and right to a fair hearing will be respected as this remarkable case proceeds.