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

At least one anti-piracy companyis 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 misleadinga"shakedown against Canadians," saidMeghanSaliof Open Media, aVancouver-based groupthatadvocates a free and open internet.

She calls it a "shakedown" becausesuspected illegaldownloaderswho receive a notice don't have to pay any type of fee.

Yet theemailsdemanding cash keep coming.

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

"I believe that copyright owners should be paid for their work," saidinternetlaw specialist AllenMendelsohn.

"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 allinternetservice 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 piracynot to get cash.

But right away, some anti-piracy companies started sending letters to suspectedpirates, asking them to pay a settlement feesometimes hundreds of dollars.

Calgary'sDarrenMycrofttoldCBC Radio's Day 6 last yearthat he received four noticesaccusing 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 aRedditdiscussion 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,JakeEnwrighttoldMetro Newslast year.

He also told both Metro andReutersthat 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.

Mendelsohnsaidhe 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."

Mendelsohnsaid, 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.

CEGTEK'smessage 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 saysthe recipient has a month to pay a settlement fee, which would be revealed when the individual visits a listed copyright settlementwebsite.

• View the CEG TEK notice

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

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

The notice states that if the person doesn'tpay 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 internetprovider to turn over your name and address.

At this point, only your service providerwhich forwards the noticesknows 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.

The CEG TEK lettersays convictedpirates mightactually have to paynon-statutory damages higher than $5,000.

Mendelsohnsaid only people selling unauthorizedcontent 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?

Mendelsohnsaid he believes CEGTEK'sintention 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."

BothMendelsohnandSaliwant 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 DerekMellonsaid 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."

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Read the copyright infringement notice fromCEG TEK

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