Federal Court Sides with Production Companies in Unauthorized IPTV Dispute

In Warner Bros. Entertainment Inc. v. White (Beast IPTV), 2021 FC 53, the Federal Court released its decision regarding a number of orders relating to an interim injunction issued in November 2020.

In November 2020, an interim injunction was issued against Tyler White and Colin Wright for their roles as “key individuals” at Beast, an alleged pirating service, following an ex parte motion brought by Warner Bros., Amazon, Bell, Columbia Pictures, Disney, Netflix, Paramount Pictures, Sony Pictures, and Universal City Studios Productions (collectively, the “Production Companies”). Beast is purportedly an unauthorized internet protocol television (“IPTV”) service that made a vast amount of motion picture and television content owned by the Production Companies available to its users.

The Production Companies and the Defendants each sought a variety of orders relating to the interim injunction. This included the Defendants’ request to set-aside the injunction and the Production Companies’ application to have the injunction extended until the end of the proceedings.

Background

Under the interim injunctions, control of the infrastructure of the Beast IPTV service was to be transferred to independent supervising solicitors. The Defendants were required to provide an array of information and access needed for the independent solicitors, assisted by computer forensic experts, to take control (e.g., account details, login information, server locations). They were also forced to disclose financial information and to restrain from undertaking activities to run the business or dispose of assets.

Setting Aside the Injunction

The Defendants contended that the interim orders should be set aside for a number of reasons. Mr. Wright argued that the requisite elements to grant an Anton Piller order and a Mareva injunction were not met, as the Plaintiffs relied on confidential sources.

Mr. White argued that the Plaintiffs failed to meet the requirements for an Anton Piller order because, among other things, there was insufficient evidence that he had in his possession incriminating documents or “things”, the Plaintiffs had not shown a real possibility that Mr. White may destroy the documents or “things” before the discovery process; and that the damage to be suffered by the Plaintiffs was not proven through sufficient admissible evidence.

The Court had previously issued the interim order because it was satisfied that the ex parte motion met the test: there was a serious issue to be tried; there would be irreparable harm if the order was not made; and the balance of convenience favored the Production Companies.

Court’s Reliance on a Confidential Source

When ordering the interim injunction, the Court relied on information from a confidential source. Defendant Wright alleged that, in doing so, the Court inappropriately accepted hearsay evidence as the Plaintiffs failed to use the best available evidence.

The Court dismissed this argument and reasoned that the confidential source’s evidence was subsequently corroborated by investigations that proved its veracity. Moreover, the Court acknowledged that the Plaintiffs justifiably wanted to keep the source’s identity secret in order to obtain more information as the investigation continued.

Anton Piller Order

Next, the Defendants argued that the interim order took the form of an Anton Piller order, and did not meet the essential requirements for that type of order.

While the Court rejected that the purpose of the interim order was to seize and preserve evidence to further the Production Company’s claim (as is the case with an Anton Piller order), it acknowledged that the order had a “measure of intrusiveness” similar to that of an Anton Piller order and thus called for a similar test, which was met.

Mareva Order

Defendant Wright also asserted that the Mareva injunction was improperly issued because there was no evidence of a real threat that he would dispose of the assets to make himself judgment-proof. The Court disagreed and reasoned that there was a genuine risk, as the Defendants had the knowledge, motivation and capacity to dissipate their assets.

Conversion of Interim Injunction to Interlocutory Relief

The test for converting an interim injunction to an interlocutory order that remains valid until the final determination of the proceedings mirrors the test for granting an interim injunction (discussed above), but it necessitates a finding that the plaintiff would suffer irreparable harm if the injunction was not continued.

The Court found that unchallenged evidence unearthed since the interim orders were executed, such as the Defendants’ failure to cooperate, tended to confirm that there was a real risk of the assets being dissipated, concealed or illegally protected.

In addition to the obvious damage that could be done to the Production Companies’ businesses if Beast continued operating, the Court accepted that lifting the injunction could cause irreparable harm by risking the potential disappearance of evidence, which would undermine the Production Companies’ ability to assert their rights. Thus, the Court issued the interlocutory injunction.

Author: Jaclyn Tilak