Canada: Privacy And Copyright — An Increasingly Volatile Mixture

Last Updated: September 17 2006

Article by Mark Hayes, © 2006, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Privacy Law, August 2006

While privacy issues have not historically been of major concern to copyright lawyers, the increased importance of privacy issues generally and the desire of some copyright owners to obtain increasing amounts of information about individual users of copyright works has put these two areas of law on a collision course. This article examines two copyright issues where privacy concerns have recently made an impact.

File sharing litigation

To say that the Internet has posed a problem for many copyright owners is to state the obvious. The ease with which digital copies of copyright works can be created and distributed has made the prevention of wide scale piracy increasingly difficult. At the same time, infringement investigations and actions, in many cases, have had to shift their emphasis from larger scale criminal organizations and groups to interdict the roles played by numerous individuals who make copyright works freely available over the Internet or through other electronic means. The need to locate, investigate and sue individual infringers has inevitably engaged privacy issues. The intersection of privacy and IP interests in these cases is best demonstrated by the impact privacy considerations have had on the actions brought against individual Internet file sharers.

Court proceedings have been undertaken by copyright owners – mainly the recording industry but also motion picture studios – in both Canada and the U.S. to stop the sharing of copyright works by Internet file sharers. In each of these cases, the investigations by the copyright owners have found the Internet Protocol (IP) address from which copyright files were being uploaded in order to be accessed by file sharers. To "convert" the IP addresses into usable information, the copyright owners have had to obtain personal information from intermediaries such as the individual’s Internet Service Provider (ISP) in order to identify the defendants to be sued; perhaps not surprisingly, this raised privacy concerns.

In Canada, BMG Canada Inc. v. John Doe is the only substantive decision dealing with the ability of copyright owners to obtain from intermediaries personal information about alleged Internet file sharers. BMG Canada Inc. (BMG) and several other record companies wanted to commence an infringement action against 29 Canadian users of the FastTrack network, which was used by the popular file-sharing program Kazaa. BMG had, during their investigation, obtained IP addresses for the 29 users and then requested the information to identify the 29 users from their ISPs. With one exception, the ISPs were unwilling to turn over the personal information of their subscribers, citing privacy concerns.

The Federal Court Trial Division initially dismissed BMG’s disclosure application on procedural grounds, citing factual weaknesses in the affidavit material that disclosed the alleged infringement. On the appeal by BMG from that decision, the Federal Court of Appeal emphasized at some length the importance of privacy rights and their protection and stated that the "delicate balance between privacy interests and public interest has always been a concern of the court where confidential information is sought to be revealed". This concern, however, must be balanced against the need to protect copyright owners from illegal infringement. The way that this balance is satisfied is to ensure that any disclosure that is ordered is done in a manner that ensures "that privacy rights are invaded in the most minimum way".

Perhaps most importantly, the Court of Appeal held that plaintiffs seeking personal information to further their litigation claims "should be careful not to extract private information unrelated to copyright infringement, in their investigation". The collection of unrelated private information may, in the Court’s view, be grounds for exercizing its discretion to decline to order the disclosure that was sought.

The BMG decision seems to signal an inclination of the Federal Court to apply the "general philosophy" behind the Personal Information Protection and Electronic Documents Act (PIPEDA) and other privacy statutes to the exercize of the court’s discretion in cases involving the disclosure of personal information. It appears that the Federal Court may take into account infringements of the general purpose behind privacy statutes to determine whether the Court’s discretion should be exercized in favour of a party. Because of the implementation of expansive privacy legislation such as PIPEDA, Canadian courts may now be required to consider privacy concerns in almost every context that involves personal information. Although courts may ultimately find that privacy concerns must yield to other interests, a comprehensive analysis of how these interests interact must first be completed.

Digital rights management

Another flash point intersection of privacy and copyright is the use of digital rights management (DRM) technologies to control access to, and use of, copyright material in digital form. Many researchers in Canada have written about the privacy implications of DRM and have argued that the potential impact of this information on a user’s privacy is increased by the fact that this information is often collected while users are personally accessing the content in a setting where they have an expectation of privacy, such as their home.

Concern about the potential privacy impact of DRM has also been expressed by regulators. In 2002, the Ontario Information and Privacy Commissioner published a report which deals with these difficulties entitled Privacy and Digital Rights Management: An Oxymoron? Two of the primary privacy risks identified by the Commissioner were the possibility of a breach in the database that stores the personal information and the fact that many corporations view this personal information as a corporate asset, which could be sold for profit or during bankruptcy proceedings. In 2004, in response to a letter from a public interest privacy organization, the Privacy Commissioner of Canada (PCC) expressed concern about the privacy-invasive potential of DRM and indicated that her office would have "serious concerns about the design and deployment of any technology that facilitated the fine-grained surveillance of individuals without their informed consent".

The debate about DRM and privacy intensified in May 2006 as a result of letters that were sent to the federal Ministers of Canadian Heritage and Industry by the PCC, the Information and Privacy Commissioners of both Ontario and British Columbia and a new group of organizations and individuals calling themselves "Canada’s Privacy Community" or "". The Canadian government is considering the introduction of a new bill reforming the Copyright Act to replace Bill C-60, which died on the order paper when the Liberal government called the last federal election in November 2005, and which contained a number of revisions that would have provided legal protection for DRMs.

While the PCC and provincial Commissioners expressed their concerns about DRMs in general terms and offered to assist in the consideration of Copyright Act amendments that might have privacy implications, the members of "Canada’s Privacy Community" called on the federal government to reject any amendments to the Copyright Act that provide protection for DRMs and instead called on the government to enact legislation to protect the public from the widespread use of DRMs by copyright owners by preventing the use of boilerplate "consents" to the collection, use and disclosure of personal information by DRMs. It is expected that such proposals will meet with fierce opposition from copyright owners.

It is now clear both that the copyright reform agenda in Canada will have an active privacy component and that courts and advocates will increasingly have to consider privacy concepts when dealing with copyright issues. What is as yet unclear is how these disparate legal concepts will be knit together into a cohesive set of principles that can be applied by copyright owners and users alike.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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