In September 2019, Super Channel owner Allarco Entertainment filed a lawsuit in Canada’s Federal Court targeting Staples Canada, Best Buy Canada, London Drugs, Canada Computers, several related companies and up to 50,000 ‘John Doe’ customers.
The controversial legal action saw Allarco accuse the retailers and their staff of promoting, encouraging and instructing in the use of set-top boxes that could enable buyers to access copyright-infringing content.
The complaint was supported by 100 hours of undercover recordings that purported to show retailers’ staff showing prospective customers how to use software such as Kodi, or offering advice on where to get devices configured for piracy.
Allarco demanded an injunction to prevent the defendants from “communicating or facilitating the communication” of its works without permission, including by “configuring, advertising, offering for sale or selling Pirate Devices.”
Allarco Ends Federal Court Lawsuit, Launches Another
A month after the lawsuit was filed, Canadian lawyer Howard Knopf wrote that in nearly four decades of being an intellectual property lawyer, he had never seen a more unusual Statement of Claim.
He noted that it claimed copyright infringement in unspecified works, circumvention, making available, unspecified “pirate devices”, trademark infringement, the Criminal Code, through to theft, stealing, interference with the economic and business relations of the Plaintiff, and conspiracy.
After the retailers fought back, Allarco discontinued its Federal Court lawsuit on January 6, 2020. However, Allarco had already filed another similar lawsuit on December 6, 2019, this time at the Court of Queen’s Bench of Alberta (Alberta’s superior court). The complaint added unknown suppliers of ‘pirate’ devices as defendants and demanded CAD$50m in damages.
“It’s too early to speculate about what Allarco will attempt to do and what the Court might let it do about the 50,000 John Doe Customers or the now added John Doe Suppliers and how their interests will be represented if things ever get anywhere near that far,” Knopf wrote at the time.
However, several months later, a new report indicates that matters are now progressing.
Allarco Demands ‘Pirate’ Set-Top Device Ban
Doubling down on its allegations of wrongdoing at the retailers, Allarco is now demanding an injunction from the Court that would prevent them from offering the set-top boxes for sale.
Whether the Court will find such a request reasonable in respect of devices that are used by millions to access entirely legal services such as Netflix is yet to be determined. Allarco, meanwhile, believes that people buy them for only one thing – piracy.
“The only reason why people buy these boxes is to steal content,” says Allarco president and chief executive officer Donald McDonald, as quoted by Globe and Mail.
Interestingly, in common with his counterparts right across the streaming industry, McDonald says that the ‘pirate’ devices – which are largely Android-based and imported from China – are often preloaded with malware that targets consumers and puts their security at risk.
“These devices are dangerous to your home network, dangerous to your personal data and could end up costing you a lot more money in the end,” he says, showing concern for the people his company is hoping to sue.
Retailers Deny The Allegations
Ever since the first lawsuit was filed in 2019, Staples Canada, Best Buy Canada, London Drugs, and Canada Computers have vigorously denied the Allarco/Super Channel allegations. All were reportedly sent cease-and-desist notices before the actions were filed but all claim to have acted within the law.
“We offer technology from reputable manufacturers and leading brands. We take claims of intellectual property infringement seriously, but we believe that Super Channel’s claims are without merit, and intend to defend this action vigorously,” an earlier Best Buy statement reads.
While Staples and Best Buy are opting not to comment at this stage, London Drugs said it would “never intentionally take or condone” any action that would infringe intellectual property rights.
“London Drugs has always respected the rights of content creators and holders of copyright in all forms. We sell products and provide services for many parties engaged in content creation and distribution and recognize and fully support their right to fair compensation,” the company says.