Canada: Supreme Court Of Canada Rules ISPs Cannot Charge A Fee For Discharging Their Obligations Under The Copyright Notice-And-Notice Regime

Last Updated: September 28 2018
Article by Jayde Wood

Online copyright infringement has become commonplace. Due to a perceived cloak of anonymity on the internet, the identity of many copyright infringers can be potentially concealed from copyright owners. However, the recent Supreme Court of Canada decision in Rogers Communications Inc. v. Voltage Pictures, LLC 2018 SCC 38 clarifies the scope of an Internet Service Provider (ISP)'s obligations under the notice and notice regime, potentially making it less expensive for copyright owners to obtain the identity of alleged copyright infringers.

In 2016, a group of film production companies ("Voltage") obtained an order from the Federal Court of Canada requiring Rogers Communications Inc. ("Rogers") to disclose the name and address of one of its Internet subscribers who was alleged to have infringed Voltage's copyright: 2016 FC 881. This Internet subscriber is the proposed representative respondent in a "reverse" class action lawsuit being brought by Voltage against about 55,000 as of yet unidentified Internet subscribers. Voltage alleged these subscribers infringed copyright in motion pictures owned by Voltage or related companies through unauthorized file sharing over the Internet.

Rogers was prepared to disclose the identifying information pursuant to a court order, but asked that Voltage be required to pay a fee of $100 per hour (plus HST) for work carried out by Rogers. The Federal Court ruled for Rogers and held that Rogers could be compensated for the work carried out to identify an Internet subscriber to a copyright owner. The Federal Court of Appeal disagreed and held that Rogers was only entitled to recover the costs incurred in the act of disclosure: 2017 FCA 97. This decision was appealed to the Supreme Court of Canada.

To reach its decision, the Supreme Court of Canada interpreted an ISP's obligations under the notice-and-notice regime. The notice-and-notice regime was enacted to deter online copyright infringement and to balance the rights of interested parties. Pursuant to sections 41.25 and 41.26 of the Copyright Act, when a copyright owner gives notice to an ISP claiming that a person at a certain IP address has infringed the owner's copyright, the ISP must forward that notice of claimed infringement to the person to whom the IP address was assigned at the time of the alleged infringement.

The Court concluded that the notice-and-notice regime imposes both express and implicit obligations on ISPs (at paragraphs [47] and [48]):

In brief, the three express obligations contained in ss. 41.26(1)(a) and 41.26(1)(b) carry with them several implicit obligations that an ISP must satisfy under the notice and notice regime. Specifically, s. 41.26(1)(a) requires an ISP to determine, for the purpose of forwarding notice electronically, the person to whom the IP address belonged. It also requires an ISP to take whatever steps that are necessary to verify that it has done so accurately lest it risk statutory liability for failing to actually forward notice to that person. It does not, however, require an ISP to determine the name and physical address of that person.

Similarly, the records that an ISP must retain under s. 41.26(1)(b) must be accurate. Any steps which are necessary to verify the accuracy of those records therefore form part of an ISP's s. 41.26(1)(b) obligations. That said, while those records must be kept in a form and manner that allows an ISP to identify the name and address of the person to whom notice is forwarded under s. 41.26(1)(a), s. 41.26(1)(b) does not require that they be kept in a form and manner which would permit a copyright owner or a court to do so. The copyright owner would, however, be entitled to receive that information from an ISP under the terms of a Norwich order — which process, as I have already said, falls outside the ISP's obligations under the notice and notice regime.

The Court noted that Rogers followed an eight step manual process to respond to the court order requesting disclosure of a subscriber's identifying information. Some of the steps overlap with Rogers' statutory obligations pursuant to the notice-and-notice regime, for which Rogers was not entitled to reimbursement. But others, like maintaining records in a manner or form that would allow copyright owners or a court to discern the identity and physical address of the person to whom notice was sent, were not covered by the notice-and-notice regime. Rogers could therefore be entitled to the reasonable costs of carrying out such steps. The Court anticipates that such reasonable costs may be relatively small but not negligible on a per-subscriber basis.

The Supreme Court of Canada's decision may have important ramifications for both copyright owners and Internet users. It clarifies the scope of an ISP's obligations under the notice-and-notice regime and affirms that an ISP cannot charge a copyright owner for discharging such obligations. This decision means that the cost for copyright owners to obtain identifying information of subscribers who are alleged to have infringed copyright will likely be relatively small on a per-subscriber basis and allow for greater accessibility to peep under that cloak of Internet anonymity.

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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