'A shakedown against Canadians': Hollywood still telling internet pirates to pay up

At least one anti-piracy company is still sending copyright infringement notices on behalf of Hollywood studios, demanding that Canadians pay for their alleged crimes. Critics say the letters are misleading and it's time for the federal government to rewrite the rules on piracy notices.

Critics say it's time for federal government to rewrite rules for piracy notices

Suspected Canadian pirates continue to get email notices telling them to pay a settlement fee. But they are under no obligation to pay up. (Peter Mountain/Disney Enterprises/Associated Press)

At least one anti-piracy company is still sending copyright infringement notices on behalf of Hollywood studios, demanding Canadians pay a settlement fee.

If they don't pay up, they're warned they could wind up in court and face fines as high as $5,000, or even more in some cases.

Critics say such letters are misleading — a "shakedown against Canadians," said Meghan Sali of Open Media, a Vancouver-based group that advocates a free and open internet.

She calls it a "shakedown" because suspected illegal downloaders who receive a notice don't have to pay any type of fee.

Yet the emails demanding cash keep coming.

Critics argue the federal government needs to rewrite the rules of its piracy notice system so Canadians fully understand their rights.

"I believe that copyright owners should be paid for their work," said internet law specialist Allen Mendelsohn.

"But at the same time, this [notice] system is also open to abuse and I think the system is being abused."

Show me the money

At the start of 2015, a new Canadian law came into effect called the notice-and-notice system.

It requires that all internet service providers forward copyright infringement notices to customers suspected of downloading unauthorized content like movies and TV shows.

The purpose of the notice system is to discourage piracy — not to get cash.

But right away, some anti-piracy companies started sending letters to suspected pirates, asking them to pay a settlement fee — sometimes hundreds of dollars.

Calgary's Darren Mycroft told CBC Radio's Day 6 last year that he received four notices accusing him of illegally downloading porn movies.

He said he didn't do it and chose to ignore the request to fork over $450.

But other Canadians have paid up, mistakenly believing they were obligated to do so.

"I just received this notice yesterday and out of panic, I paid. Now I did research and found that I shouldn't have done it," an angry commenter wrote on a Reddit discussion forum.

Demands for cash don't let up

The federal government publicly acknowledged the problem. "There is no obligation for Canadians to pay these settlements," then Industry Canada spokesman, Jake Enwright told Metro News last year. 

He also told both Metro and Reuters that the ministry was informing stakeholders that the letters shouldn't ask for money.

But the demands for cash continue along with the threats that if Canadians don't pay, they could face legal action.

Mendelsohn said he constantly gets inquiries from people who received a notice and want to know their rights.

"I've been contacted by many upstanding professionals who are obviously quite nervous," the Montreal lawyer said. "They're fearing some sort of lawsuit that may destroy their personal or professional reputation."

Mendelsohn said, in his experience, the majority of letters requesting cash are penned by CEG TEK. The Los Angeles firm sends the notices on behalf of movie studios.

CBC News reached out to CEG TEK multiple times but the company offered no comment.

CEG TEK's message to Canadian pirates

CBC News obtained a notice from CEG TEK sent last month on behalf of Millennium Films. It informs the Canadian recipient that his internet account was used to obtain and/or share an unauthorized copy of the blockbuster movie London Has Fallen.

The notice says the recipient has a month to pay a settlement fee, which would be revealed when the individual visits a listed copyright settlement website.

"This letter is essentially asking people to pay money before any wrongdoing has been proven," said Open Media's Sali.

"This is not the way our court system works."

Anti-piracy company, CEG TEK, tells suspected Canadian pirates to pay a settlement fee or face possible legal action. (Shutterstock)

The notice states that if the person doesn't pay in time, "any future resolution may require an increased payment."

That's because, the letter implies, the case could go to court. But Mendelsohn believes that scenario is highly unlikely.

To pursue legal action, he says, a company first must get a court order to force your internet provider to turn over your name and address.

At this point, only your service provider — which forwards the notices — knows who you really are.

Then the anti-piracy company would have to sue you, which is a costly process. Unless it was launching a class action lawsuit, the firm could only win a maximum of $5,000 in damages.

"Limitations on fines for non-commercial infringement make it economically, relatively unfeasible to sue one person at a time," Mendelsohn said.
Critics want the federal government to rewrite the rules for Canadian piracy notices. (The Lonely Island)

The CEG TEK letter says convicted pirates might actually have to pay non-statutory damages higher than $5,000.

Mendelsohn said only people selling unauthorized content could be fined more than the $5,000 limit.

"It's misleading, certainly," he said of the letter. "But I think that's by design, obviously."

Will requests for money stop?

Mendelsohn said he believes CEG TEK's intention isn't to sue anyone, but to do something more profitable: scare Canadians into paying a fee.

The lawyer said asking for cash violates the spirit of Canada's notice system, but it doesn't technically break any rules.

"There are really no limitations as to what can be in these notices."

Both Mendelsohn and Sali want the government to design a template for piracy notices that companies must follow and that won't mislead Canadians.

Innovation, Science and Economic Development Canada now oversees the notice system. 

CBC News asked the ministry if it's re-evaluating the rules for copyright infringement letters.

In an email, spokesman Derek Mellon said the system is up for review in 2017, which will be "an opportunity to take stock and consider whether the act is meeting desired policy objectives."

Read the copyright infringement notice from CEG TEK

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Sophia Harris

Business reporter

Based in Toronto, Sophia Harris covers consumer and business for CBC News web, radio and TV. She previously worked as a CBC videojournalist in the Maritimes where she won an Atlantic Journalism Award for her work. Contact: