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US firm runs mass copyright shakedown in Canada

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When Canada’s new copyright rules went into effect in January, critics feared that someone would use them to run settlement extortion schemes of the sort that have long plagued the American legal system. Those fears have proved to be justified. This week, a second U.S. company has come into Canada, apparently using an automated process to blast thousands of settlement notices far and wide.

If you’re unfamiliar with the scheme, it works like this: under Canada’s new rules, a copyright owner who detects an unauthorized download can send a notice to the subscriber’s ISP, which is then obliged to notify the subscriber. The problem is that copyright owners can abuse the system by sending out notices that are actually threats, based on false information, and scare people into paying a settlement.

This has already happened once when a company called Rightscorp began making outlandish claims based on American law (for instance telling notice recipients that they faced $150,000 fines for downloading songs — even though the maximum fine in Canada is $5,000).

Now, a second group is trying its luck. This time, the culprit appears to be the porn industry working with an enforcement firm called CEG TEK. Lawyer Bram Abramson, who is counsel for a Canadian ISP, took to Twitter to flag what’s going on:

In other words, CEG TEK is using a bot to send out thousands of “notices” that are, in reality, shakedown letters. Recipients of such notices are typically invited to call a number where someone squeezes them to pay up what they can before something much worse happens to them (the enforcement agency and the copyright owner then divvy up the proceeds).

Law professor Michael Geist, who also reported on the story, observed that the latest notices aren’t as egregious as the previous Rightscorp batch. The CEG TEK notices at least claim to be based on Canadian law, even though they also misrepresent the damages at stake as well as other basic facts about the process.

But as Geist points out, they are still a gross abuse of the process, and also impose a financial burden on Canadian ISPs, who are obliged to process this flood of trumped up notices. Both Geist and Abramson recommend the Canadian government pass regulations to curb this sort of abuse, possibly by imposing a charge on those who send notices.

Some readers will point out that the letter recipients shouldn’t be infringing copyright in the first place, and they deserve what they get. The problem with this attitude, in my view, is that it encourages an abuse of the legal process (never a good thing), and undermines overall respect for copyright law. A better approach would be for copyright owners to follow the process in good faith, and save the big legal guns for repeat and flagrant offenders.

11 Responses to “US firm runs mass copyright shakedown in Canada”

  1. I’d like to hear from some people who have received some of these email notices and ignored them past the “settlement date”, and what the outcome was.

    • shakethemonkey

      But the revenue drop is largely not due at all to file sharing. People are buying fewer albums and more individual songs, and the population is aging. The truth is, overall music revenue is *up*, when you factor in live performances.

  2. TimeKeeper

    It would be cool if someone went after CEG TEK solicitations under CASL (Canada’s anti-spam legislation). The email is a solicitation to do business, veiled in the form of a legal request, where the receiver of the email did not give them explicit permission to contact them directly.

    From their email: ” this 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.”

    Sounds both spammy and scammy. Someone please report them.

    • Graham Walker

      Timekeeper CegTek is a wholly owned subsidiary of Prenda Law as far as I can ascertain! They deny this but are still facing disclosure in over 8 cases where they are fighting tooth and nail to delay or dismiss with prejudice to avoid having to disclose their corporate structure. They use a discredited German tech company who again are suspected of being owned by them.

      Hopefully one or more of the cases in dispute will end in them having to disclose the truth but I’m not holding my breath. They are not interested in actually going to court to face legal scrutiny nut only in extorting as much as possible from gullinle people who believe their BS.

  3. steeleword

    The real “shakedown” is what has happened to artists and content creators in Canada as internet companies have made billions distributing content and pushing ads on content while choking off revenues to content creators. The real story here is that Canadians have lost a national treasure and trampled the rights of their creative class. The recorded music business was $900m a year in Canada before “filesharing” it shrank to $300m a year by 2010. Meanwhile “filesharing” grew to 107 Petabytes a month in Canada in 2014 according to Cisco. That is 2 Billion CDs worth of content a year consumed and distributed by Canadians without compensation to the creators in violation of their rights. In my opinion, it is a national tragedy. “Filesharing” is forecast to grow to 126 Petabytes per month by 2018. There is essentially nothing a songwriter, software developer, filmmaker or author can do if someone decides to give their song, movie or book away for free to the world from Canada. How anyone could support that behavior is incomprehensible. Firms that attempt to stand up for artists against these piracy advocates should be applauded. https://openmedia.ca/blog/debunking-bill-c-11-why-canadians-should-be-concerned http://www.ciscovni.com/forecast-widget/advanced.html

    • Graham Walker

      I’m sorry Steeleword but I have to respectfully disagree with you.

      1. That article is over 3 years old and has since been proven incorrect.
      2. It has been proven over and over again that so called “pirates” actually spend more on physical copies of music and movies than most others.
      3) Filesharing is not illegal and the vast majority of that bit torrent traffic is for fully legal items, for instance I use BT to do my nightly business back up the the cloud which is normally around 2GB. This kind of service was in it’s infancy three years ago but it’s now being lumped in with so called “piracy” statistics.
      4. The figures you quote come from none other than Rightscorp itself so they are dubious to say the least.
      5. Finally When companies like Rightscorp do get a monetary payment they only forward 50% to the copyright holder (usually the MPAA or RIAA) who then take their cut before passing on pennies in the dollar to the actual artiste. THe real pirates here are the very people you want to applaud.

      This is just my honest opinion and not an endorsement of any particular view.

    • Concerned Canadian

      Hmm Steeleword you wouldn’t just happen to be the John Steele who works with Prenda Law would you by any chance? The tone and format of your comment leads me to believe that you are. For anyone interested here’s a quick rundown on that John Steele:

      John Steele, the lawyer who told me he’d made “millions” going after people who illegally download pornographic movies, is experiencing some legal trouble of his own. A district judge in Los Angeles has questions about the way in which Steele and his colleagues have conducted their litigation. Ars Technica and Popehat have been providing detailed (and often gleeful) coverage of a series of hearings that may lead to the unraveling of hundreds of lawsuits filed by Steele and his colleagues at Prenda Law against alleged XXX-movie lovers whose IP addresses were caught downloading the films online.

      Steele and his colleagues have been pursuing “John Does” who download XXX films without paying for them for copyright violations. When I interviewed him last year, he told me he had filed over 350 of these suits, and that he was at that time suing approximately 20,000 people. The tactic is similar to the one employed by the recording industry years ago, but where RIAA wanted to scare people out of illegal downloads by getting massive, scary judgments in highly publicized cases against individual Napster users, Steele and the lawyers like him are content to get relatively small settlements — deal letters often ask for $3000 or so — from individuals who pay up quietly to avoid being named in public court filings for allegedly watching a film such as “Illegal Ass 2.”

    • I don’t think filesharing has anything to do with the lost sales, i use to buy music 5 or 6 cd at a time, up to where the music got to be not worth buying, an it sounded like crap an not worthh buying, an still does.

  4. Expat Brit

    CegTek doesn’t even bother to check if the IP being used is actually infringing either. They base their conclusions on a less than 1 second timeslice so if someone is just using bit torrent to download a small demo to see if it’s worth paying for they will get flagged as pirates.

    Also there is evidence starting to come to light that porn companies like Malibu Media are actually the initial seeders in some cases so they can then start this type of shakedown! If this turns out to be the case then I would say in all honesty that anyone downloading should be covered under “fair use”.