The Federal Appeals Court's refusal Thursday to order the disclosure of the identities of 29 suspected music file swappers over the Internet was one lost battle in the Canadian Recording Industry Association's (CRIA) war against illegal music file sharing.
Upholding a previous decision by Federal Court Justice Konrad von Finckenstein, the Appeals Court dismissed CRIA's motion, citing "hearsay" evidence.
"Much of the crucial evidence submitted by the plaintiffs was hearsay and no grounds are provided for accepting the hearsay evidence," Justice Edgar Sexton said in his decision.
Last year CRIA launched a lawsuit against 29 unnamed individuals who allegedly shared music files over Kazaa's peer-to-peer network. The individuals were identified only through pseudonyms they used while swapping files.
CRIA then asked the Federal Court to grant permission for five Internet service providers (ISPs) to identify the individuals by matching the pseudonyms with IP addresses. The Federal Court threw the case out, criticizing CRIA's evidence.
The five ISPs include Bell Sympatico, Rogers Communications, Shaw Communications, Telus and Videotron. Under the Personal Information Protection and Electronic Documents Act (PIPEDA), ISPs cannot disclose subscribers' personal information without legal authorization.
Sexton pointed out that the evidence that supposedly connects the pseudonyms with the IP addresses "was hearsay, thus creating the risk that innocent persons might have their privacy invaded and also be named as defendants where it is not warranted."
Acting as intervener, the Canadian Internet Policy and Public Interest Clinic (CIPPIC) described the latest ruling a "landmark privacy decision."
"The court has reaffirmed the importance of online privacy and confirmed that those seeking to sue Internet users cannot uncover the anonymity of their targets on the basis of mere allegations," CIPPIC's executive director Philippa Lawson said in a statement.
But hope may not be lost for CRIA as the court provided a window of opportunity for the association to regroup and pursue the case with better evidence. In its decision, the Court of Appeals disagreed with Finckenstein regarding the requirement of a prima facie case of wrongdoing before the court can grant the order to disclose the suspects' identities.
Instead, Sexton ruled that the "proper test" is whether CRIA has a bona fide claim against the alleged offenders.
A prima facie case requires very strong evidence establishing the likelihood of success at trial. A bona fide claim, however, is a "good faith" case that poses a serious claim that does not require strong proof of the claim, according to CIPPIC staff counsel David Fewer.
"With a bona fide threshold you do not (necessarily) have to prove the claim. It is not that you are likely to succeed, but you are likely to engage the court in the issue," Fewer said.
He added that this aspect of the court's decision leaves the possibility of CRIA coming back to court "with better evidence (to) begin a U.S.-style 'sue your customer' mass litigation campaign in Canada."
Taking a "half-filled glass" view of the decision, CRIA said the decision provided a guideline that will direct the organization's next step.
"The decision gives us the blueprint we need to proceed. We welcome this clarity. With this in hand, we will be able to act in the interest of artists and those who invest so much time and money in their careers," CRIA president Graham Henderson said in a statement.
The group specifically welcomed the court's "confirmation that Canada isn't a piracy haven," saying this was the "key issue" of their appeal.