[IP] Canadian Supreme Court Issues ISP & Net Music Decision
Begin forwarded message:
From: Michael Geist <mgeist@xxxxxxxxx>
Date: June 30, 2004 12:04:07 PM EDT
To: dave@xxxxxxxxxx
Subject: Canadian Supreme Court Issues ISP & Net Music Decision
Dave,
The Canadian Supreme Court issued the long-awaited Tariff 22 decision
this morning. The court allowed the appeal, overturning a Federal
Court decision to impose liability on ISPs for caching of content. The
case also has a key jurisdictional element as the court ruled that
there may be liability under Canadian copyright law at both the country
where the music was transmitted as well as where it was received and
has further implications for file sharing lawsuits.
The bottom line -- the ISPs are big winners as they have had their
position as an intermediary strongly affirmed by the court. When
combined with another Supreme Court decision from earlier this year
(CCH), the Canadian Supreme Court has made it very clear that ISPs
should not be held responsible for copyright holders claims of
infringement where they act as conduits for the transmission of data.
There are three other key elements to the case. First, the court
addresses the issue of Internet jurisdiction and rightly concludes that
Canadian law may extend outside the country in certain circumstances.
Second, it raises the prospect for a notice and takedown system,
suggesting that the government should consider establishing rules
around this issue. Third, one judge dives into the peer-to-peer file
sharing case, expressing significant concern over the prospect for
monitoring end users downloading habits and cautioning that copyright
law should be interpreted with full respect for privacy rights.
As you may know, the case literally dates back to 1995 when SOCAN, a
leading Canadian music collective, applied for a new tariff for
downloading online music. After four years of hearings and waiting,
the Copyright Board of Canada issued a decision in 1999 that largely
absolved ISPs from collecting such a tariff. The case was appealed to
the Federal Court of Canada where the court ruled that ISPs could face
liability for the caching of content on their servers since such
activity was not strictly necessary to deliver content and thus fell
outside of the conduit exemption in the Copyright Act. The Canadian
Supreme Court heard the appeal last December. The decision is online
at
http://www.lexum.umontreal.ca/csc-scc/en/rec/html/2004scc045.wpd.html
The key points of the decision are as follows:
1. The court overturned the Federal Court on the caching issue.
The court again turned to its emphasis on balance in copyright in
noting that the exemption for intermediaries is not a loophole but
rather a critical part of the balance. The court concludes that:
"As long as its role in respect of any given transmission is limited to
providing the means necessary to allow data initiated by other persons
to be transmitted over the Internet, and as long as the ancillary
services it provides fall short of involving the act of communicating
the work or authorizing its communication, it should be allowed to
claim the exemption."
It adds that ISPs fall into the conduit category given their lack of
knowledge of the content and impracticality of monitoring Internet
activity.
2. The court again addresses the issue of what it means to
authorize copyright infringement. Just as it did several months ago in
a case involving photocopiers, the court ruled that:
"when massive amounts of non-copyrighted material are accessible to the
end user, it is not possible to impute to the Internet Service
Provider, based solely on the provision of Internet facilities, an
authority to download copyrighted material as opposed to
non-copyrighted material."
The court does, however, raise the specter of a notice and takedown
system in Canada as it notes that failing to take action with knowledge
of infringing content might in some circumstances lead to a finding of
authorization. Given the challenges with what constitutes effective
notice, the court calls on the government to adopt a notice and
takedown system.
3. The court addresses the jurisdictional reach of Canadian
copyright law. It adopts a broad approach, finding that a
communication occurs not just when it originates in Canada. Rather, it
might originate anywhere depending on an analysis of connecting factors
to Canada. Those connecting factors include the situs of the content
provider, the host server, the intermediaries and the end user.
4. A concurring judgment from Justice LeBel raises an important
issue for the peer-to-peer file sharing lawsuits. The judge argues
that the Court should interpret the Copyright Act in a manner that )
"respects end users' privacy interests, and should eschew an
interpretation that would encourage the monitoring or collection of
personal data gleaned from Internet-related activity within the home."
Moreover, he was very troubled by any test that might encourage
monitoring of Internet user activity, noting that "the privacy
interests of individuals will be directly implicated where owners of
copyrighted works or their collective societies attempt to retrieve
data from Internet Service Providers about an end user's downloading of
copyrighted works."
Incidentally, the case now heads back to the Copyright Board for "phase
two" of the proceedings which will be used to determine the amount of
the tariff (phase one addressed the legal issues associated with who is
subject to the tariff).
If you're looking for more information, I've actually written about the
case at each stage. For more on the 1999 Copyright Board decision, see
<http://www.theglobeandmail.com/servlet/ArticleNews/printarticle/gam/
19991118/TWGEIS>
For more on the 2002 Federal court decision see
<http://www.theglobeandmail.com/servlet/ArticleNews/printarticle/gam/
20020516/TWGEIS>
Best,
MG
--
**********************************************************************
Professor Michael A. Geist
Canada Research Chair in Internet and E-commerce Law
University of Ottawa Law School, Common Law Section
Technology Counsel, Osler, Hoskin & Harcourt LLP
57 Louis Pasteur St., Ottawa, Ontario, K1N 6N5
Tel: 613-562-5800, x3319 Fax: 613-562-5124
mgeist@xxxxxxxxx http://www.michaelgeist.ca
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