Are Canada’s copyright laws friendly or unfriendly towards wealth destroyers according to Prof. Geist?

March 9th, 2011 by Barry Sookman Leave a reply »

In the last few weeks Prof. Geist has been writing, blogging, tweeting, speaking and even testifying to a Parliamentary Committee about the IsoHunt case and whether there is a need for an amendment to the Copyright Act to create a new cause of action to make online pirate sites and services liable for enabling copyright infringement. His ostensible claim is that representatives of the recording industry secretly filed a copyright infringement claim against IsoHunt three weeks before Bill C-32 was tabled in the House of Commons; kept the suit secret to improve their chances of getting copyright reforms needed to shut the site down – all the while not needing the amendments because they already have the legal tools necessary to put IsoHunt out of business. These claims were made here, here, here, here, here, here, and here, among others, and were widely disseminated and syndicated by Prof. Geist including here, here, here, here, here, here, and here.

Prof. Geist’s claims are misleading. It is clear that Prof. Geist’s objective in this recent spate of activity is to persuade policy makers and the public that the new proposed enablement cause of action is not needed because Canada’s copyright laws are already robust enough to deal with what Minister Clement calls “the wealth destroyers” like IsoHunt. However, for years Prof. Geist has consistently and repeatedly been writing and telling the public that Canada’s laws related to authorization might not be effective against pirate sites and services and that Canada does not have contributory liability laws that can be used against these sites and services.

Prof. Geist’s current opposition to the proposed enablement amendment in C-32 must be judged having regard to his long standing views about the state of current Canadian law as it relates to authorization and contributory liability. In order to oppose laws intended to create or clarify rights against wealth destroyers like IsoHunt, he argues that Canadian law is adequate and that no changes are needed. However, when considering whether rights holders have the means to enforce their rights against peer-to-peer file sharing sites and services and other wealth destroyers, he says that rights holders do not have contributory infringement rights such as inducement and that reliance on the authorization right would be suspect.

The only conclusion that can be drawn from a review of his writings is that he has either changed his long standing opinion about the state of Canadian law – now believing it is effective enough to shut down the wealth destroyers like IsoHunt- or that he is inaccurately describing what he believes Canadian law to be to oppose the amendments in Bill C-32 that are intended to give rights holders the tools needed to close down wealth destroyers.

Prof. Geist’s Claims

Prof. Geist claims about the IsoHunt case and the lack of any need for reforms to the law have recently been made in his blogs, newspaper articles and in testimony before a Parliamentary Committee. In a widely disseminated article, Weak Copyright Laws? Recording Industry Files Massive Lawsuit Against isoHunt, he stated the following:

While the notion of a “legislative holiday” appears to be the impetus for some of the provisions on Bill C-32, my weekly technology law column (homepage version,Toronto Star version) notes that what is left unsaid – and thus far unreported – is that 26 of the world’s largest recording companies launched a multi-million dollar lawsuit against isoHunt using existing Canadian copyright law just three weeks before the introduction of the bill [PDF of May 2010 claimPDF of August 2010 amended claim]…

As the isoHunt lawsuit demonstrates, the legal power to combat online infringement has existed within Canadian copyright law for years

The claims in the isoHunt lawsuit must still be proven in court (as would any case using the new powers contemplated by Bill C-32), but past cases suggest that Canadian law is hardly toothless

The question is not whether Canadian law is equipped to deal with these sites – recent history and the latest lawsuit demonstrate that it is – but rather why the industry has opted for a strategy of damaging Canada’s reputation by loudly claiming that it is unable to address online infringement using existing law while it quietly files court documents that suggest that the opposite is true. (emphasis added)

Prof. Geist elaborated his claims in an interview with the Globe and Mail’s Jeff Gray in an article entitled The case against isoHunt.  In the article he is quoted as stating the following:

…University of Ottawa law professor and prolific blogger Michael Geist has accused CRIA of purposely keeping quiet its lawsuit against isoHunt, even as it calls for reforms to the copyright law.

“It has the feel of doing and saying one thing and then doing something else,” Dr. Geist said in an interview. “Claiming that the site’s causing enormous harm, claiming that Canadian copyright law can’t deal with it and so we need changes to the law – and at the same time filing repeated court documents that claim that the site is operating illegally under the law as it stands today.”

He said the industry did not want to highlight the fact that it was making use of the current law, in order to keep up pressure up on the government to reform it: “I think they waited and they kept it hidden because they wanted to paint Canada as a piracy haven and use it as a method to encourage the government to move forward with copyright reform.”

Dr. Geist insists the details of who filed suit first are irrelevant to his larger point about whether the recording industry believes Canada’s current laws are strong enough to close sites that violate copyright. “At the end of the day, you can focus on timing or you can focus on what the arguments actually are.” (emphasis added)

On February 15, 2010 Prof. Geist appeared before the Standing Committee on International Trade in relation to the proposed Canada EU Trade Agreement (CETA). At that hearing he testified as follows

I’d also just quickly note that we shouldn’t underestimate the ability of copyright law, in its basic principles, to deal with some of these issues. I’ll give you an example. The current bill [C-32] provides a specific provision to deal with what are called enabler sites, sites that are designed to deal with clear pirate websites. Everybody says, well, of course we need to be able to deal with that.

Last year, three weeks before the bill was introduced, 26 record labels secretly filed a massive lawsuit against the largest known alleged pirate site in Canada, a site called isoHunt. They used existing Canadian copyright law. They’re looking for millions of dollars in damages, they’re looking for a full shutdown of the site, and they’re using the law today.

The lawsuit suggests that all these claims that they are powerless and that we need reforms mistake a little bit where we really stand, because in fact there is the ability to use, in many instances, basic copyright principles that have been in place for decades to deal with some of these issues. It’s in a sense old wine in new bottles, but it can still effectively apply.”[1]

The validity of Prof. Geist’s claims

Prof. Geist’s claims that the record labels secretly started the litigation with isoHunt is incorrect. CRIA did send a cease and desist letter to isoHunt on behalf of certain record labels in May 2008. However, it was IsoHunt that started the litigation by filing a lawsuit against CRIA and certain record labels in the BC Supreme Court – some four months later – seeking a declaration that its operations are legal in Canada. That suit was widely publicized including by Prof. Geist. The labels brought a motion to convert IsoHunt’s lawsuit (commenced by way of application) into a regular action. The BC Supreme Court granted the relief requested by the labels in a judgement rendered on March 11, 2009.[2] IsoHunt brought a motion to the BC Court of Appeal for leave to appeal that decision. That motion was dismissed on July 30, 2009.[3] IsoHunt then re-started its lawsuit by filing a Statement of Claim in November 2009, again seeking a declaration from the BC Supreme Court that its operations are legal in Canada. In May 2010, the labels filed their statement of defence and, on the same day, their counter suit alleging that IsoHunt infringed copyright. On agreement of the parties IsoHunt’s action and the counter suit by the labels will be tried together.

Liberal MP Dan McTeague has already pointed out that Prof. Geist’s claims that the labels secretly started the litigation with IsoHunt are misleading in two blogs here and here.

Professor Geist argues that the isoHunt lawsuit demonstrates “the legal power to combat online infringement has existed within Canadian copyright law for years”. As a law professor, however, he must know that what is alleged about the law in court documents is not proof of the state of the law on any issue. Yet he uses this to support his argument that no changes are needed in Canadian liability law. This claim would likely be misleading to the general readers of Prof. Geist’s blogs and other writings. Dan McTeague pointed this out in his recent rebuttal to Prof. Geist commenting that “This, too, is a specious argument and indeed surprising coming from a law professor”; “Nonetheless, if it will serve as an excuse to oppose meaningful copyright reform, it seems that there are some people will try to cite the recording companies’ pleadings as a statement of Canadian law.”

The most surprising aspect of Prof. Geist’s recent public statements that no amendments to Canadian law are needed to address sites and services like IsoHunt is that he has consistently expressed the opinion that Canada’s copyright laws are too weak or uncertain to make sites and services like IsoHunt liable for copyright infringement. The direct contradiction of his own public statements on this topic — where it has served his arguments that rights holders may not be able to successfully assert their rights under Canadian law or agree to international treaties because to do so would require changes to Canadian law — can be seen from the following articles and blogs he has written over the course of many years.

In March of 2004, Prof. Geist wrote an article commenting on the Supreme Court decision in the The Law Society of Upper Canada v. CCH case. He noted that the decision “instantly ranks as one of the strongest pro-user rights decisions from any high court in the world”. He then went on to opine that the court’s analysis of the law related to authorization could open the door to arguments that could legalize the operations of p2p sites and services in this country.

The court also adopted an important new standard for authorization, which has long been used by copyright owners to hold parties accountable for allowing others to infringe copyright. On this issue, the court ruled authorization should be taken to mean “sanction, approve or countenance” and concluded “a person does not authorize copyright infringement by authorizing the mere use of equipment (such as photocopiers) that could be used to infringe copyright.”

This finding will have an immediate impact on copyright issues involving the Internet.

By adopting an approach that allows the providers of equipment to presume their equipment will be used lawfully, the court has opened the door to Internet service providers and even peer-to-peer providers to argue they legitimately presume their subscribers act lawfully and thus cannot be said to authorize copyright infringement. (emphasis added)

In 2005 Prof. Geist wrote a blog in which he considered whether Canadian copyright law is as robust as Australia’s copyright law and could be used to enjoin peer to peer file sharing services like Kazaa. In commenting on an Australian decision which found Kazaa liable for authorizing infringement Prof. Geist doubted whether Canadian law could be used to achieve the same result.

From a Canadian perspective, the case highlights a growing divergence between Canadian and Australian copyright law such that the outcome of a similar case in Canada could potentially be much different (more on that at our comparative conference later this month in Ottawa).

Some of the differences between our two laws are obvious; for example, the existence of a making available right in Australia but only proposed here in Bill C-60. The more important distinction in this case, however, involves the question of authorization (or authorisation).  Critical to today’s Kazaa decision was reliance on the test developed in Moorhouse, an Australian case, for determining authorization.  The court concluded that Sharman Networks, along with several of its directors, met that standard.  While acknowledging the existence of legal warnings against copyright infringement, the court was troubled that “Sharman took no steps to include a filtering mechanism in its software, even in software intended to be provided to new users.”

The Supreme Court of Canada considered the authorization issue last year in CCH v. Law Society of Upper Canada.  The Canadian court explicitly rejected the Moorhouse test, concluding that “Moorhouse is inconsistent with previous Canadian and British approaches to this issue. In my view, the Moorhouse approach to authorization shifts the balance in copyright too far in favour of the owner’s rights and unnecessarily interferes with the proper use of copyrighted works for the good of society as a whole.”

As for the application of authorization test, the Canadian Supreme Court stated that “a person does not authorize infringement by authorizing the mere use of equipment that could be used to infringe copyright. Courts should presume that a person who authorizes an activity does so only so far as it is in accordance with the law. This presumption may be rebutted if it is shown that a certain relationship or degree of control existed between the alleged authorizer and the persons who committed the copyright infringement.”

In other words, under Canadian law, Kazaa would be entitled to presume that its services are being used lawfully consistent with its legal terms. Could the music industry rebut the presumption against a Canadian Kazaa?  Hard to say. It might prove to be a challenge given questions about whether downloading for personal purposes constitutes copyright infringement in Canada and the evidence needed to show a relationship or degree of control that rises to the level of authorization under Canadian law.[4] (emphasis added)

In 2006 Prof. Geist published a blog Does YouTube Deal Foreshadow Licensed P2P?In the blog he discussed the liability of the p2p file sharing site Napster. In the blog he claimed that unlike the US, Canada has no contributory infringement doctrines that could be used against sites like Napster operating in Canada:

First, the differences in legal status of Napster and YouTube may have contributed to the different approach. Napster’s peer-to-peer model raised the spectre of contributory copyright infringement (a legal concept absent from Canadian copyright law), whereas YouTube’s Web-based distribution of user-generated content – much of which does not infringe copyright – likely qualifies for legal protection under U.S. copyright law.

In February 2007, Prof. Geist wrote a blog in which he criticized the efforts of the Entertainment Software Association to stop the sale and distribution of mod chips in Canada. Mod chips are tools that are used to circumvent technical measures that are employed by console manufacturers and game publishers to protect their works against infringement.[5] In his blog he expressed the opinion that the sale of these circumvention tools was legal in Canada and specifically relied on the lack of any inducement liability in Canada as a reason for saying so.

A blog reader has passed along a legal demand letter they recently received from Smart & Biggar, a leading Canadian IP law firm, representing the Entertainment Software Association.  The letter focuses on the sale of modification devices – frequently referred to as “mod chips” that can be used to modify or alter store-bought video games or play infringing copies of those games.

The letter argues that the ESA has both trademark and copyright rights in the video games.  In addition to pointing to Section 27 of the Copyright Act as governing the sale or distribution of unauthorized software, the applicability of criminal offences under Section 42 of the Copyright Act, and the fraud provisions of the Criminal Code, it claims:

“any use, offer for sale or sale of modification devices, or ‘mod chips’ to permit circumvention of our clients’ consoles security systems to play pirated or counterfeit software, is also an offence and constitutes direct or indirect infringement of our clients’ intellectual property rights by inducing and procuring infringement by others of our client’s aforesaid rights.”

Given that the letter makes no reference to patent rights, the intellectual property referred to in this sentence is presumably copyright.  This raises at least two issues.

First, while the ESA makes no secret about the fact that it would like Canada to follow the U.S. model, this letter suggests that it isn’t bothering to wait for the law to change. It is trying to apply U.S. law in Canada today since the doctrine of inducing infringement does not exist here (if it sounds familiar, it is because the U.S. Supreme Court raised inducement in theGrokster case). Moreover, I believe that it is simply wrong to argue that the use of a mod chip alone constitutes an infringing act in Canada…. (emphasis added)

In October 2007 Prof. Geist wrote a blog commenting on a court decision in the US in which the court awarded statutory damages against a downloader. He noted that the Canadian and US statutory regimes are much different and that Canadian courts would be “a bit more reasonable” when it comes to such damages. He then went on to comment on a cease and desist letter CRIA had sent to Demonoid, one of the largest BitTorrent sites which was then operating in Canada.  Relying on his previously expressed interpretation of the scope of authorization in Canada, he argued that the rights of CRIA’s members to shut down that BitTorrent site were “suspect”.

Third, the Canadian music industry is far more divided on the issue of these lawsuits.  Indeed, Canadian musicians have come out vocally against such lawsuits as have leading labels such as Nettwerk.

These differences may help account for the fact that we have not seen file sharing suits in Canada since CRIA was soundly defeated in its attempt to sue 29 alleged file sharers several years ago.  Instead, CRIA has gone after intermediaries, as the recent demand notice against Demonoid demonstrate.  Even those claims are suspect, however, since the Supreme Court of Canada has ruled that providers of equipment (including websites) are entitled to presume that their equipment will be used lawfully and therefore not rise to the level of authorizing infringement.(emphasis added)

In October 2007 Prof. Geist wrote another blog criticizing ISPs for using packet shaping on their networks which he argued had the effect of limiting “the amount of available bandwidth for certain services such as peer-to-peer file sharing applications”. One of his objections to the practice was that these peer-to-peer file sharing applications are legal in Canada.

This raises many issues but I would like to focus on just two in this posting.  First, not only is BitTorrent legal in Canada, but a growing percentage of the file swapping on BitTorrent clients is authorized…

In January 2010 Prof. Geist wrote a blog in which he argued that Canadians should oppose the draft ACTA accord. Among the many reasons he gave for opposing the then current draft of the ACTA treaty was that it would force Canada to amend its laws to introduce inducement, the contributory infringement liability doctrine he admits was used to shut down the p2p file sharing site Grokster in the United States.

Third party liability. The third party liability provisions focus on copyright, though an EU document notes that it could (should) be extended to trademark and perhaps other IP infringement.  The goal of this section is to create an international minimum harmonization regarding the issue of what is called in some Member States “contributory copyright infringement”.  The U.S. proposal would include “inducement” into the standard, something established in the U.S. Grokster case, but not found in many other countries. This would result in a huge change in domestic law in many countries (including Canada).(emphasis added)

As can be seen, Prof. Geist’s current opposition to the enablement amendment in C-32 is based on a stated opinion that contradicts his repeated previous opinions about Canadian law. To oppose laws intended to create or clarify rights against wealth destroyers like IsoHunt, he argues that Canadian law is adequate. But, he previously argued that existing laws related to authorization are “suspect”; that the “door” has been “opened” to peer-to-peer providers to argue that their services are legal; and that it is “hard to say” and “might prove to be a challenge” to find them liable. He also previously argued that contributory infringement is “a legal concept absent from Canadian copyright law” and that the “doctrine of inducing infringement does not exist here” and, accordingly, cannot be used against wealth destroyers like peer-to-peer file sharing sites and services.

So are Canada’s copyright laws friendly or unfriendly towards wealth destroyers according to Canada’s Research Chair in Internet and E-commerce Law? His writings suggest it depends on the circumstances.

For more information about the Copyright Modernization Act or Bill C-11 or copyright reform, see Change and the Copyright Modernization Act.

 


[1] See, also,The Canadian isoHunt Litigation: The CRIA Cease and Desist Letter That Started it AllAs I told the Globe, I think the timing issue misses the larger point – the recording industry has argued in multiple court documents that current Canadian copyright law can be used to shut down isoHunt and to force the site to pay millions in damages. While this must still be proven in court, the good faith reliance on current Canadian law certainly undermines claims that the law is ill-equipped to address the site and raises questions about why the industry has persistently painted Canadian law facilitating a piracy haven when its legal actions suggest otherwise…”

[2] IsoHunt Web Technologies Inc. v. EMI Group Canada2009 BCSC 1837 (CanLII)

[3] IsoHunt Web Technologies Inc. v. EMI Group Canada Inc., 2009 BCCA 618

[4] The Moorehouse decision referred to by Prof. Geist was codified in Australia’s copyright law in 2000 by inserting into s. 101 a new subsection 1(A) to provide a practical enforcement regime for copyright owners in the online environment. Universal Music Australia Pty Ltd. v. Sharman License Holdings Ltd., [2005] FCA 1242 (5 September 2005); Universal Music Pty Ltd. v. Cooper, [2005] FCA 972 (Aust. F.C.).

[5] Prof. Geist has long opposed effective protection for TPMs that can be used to protect entertainment software products. His policies for weak protection for TPMs are frequently cited by organizations like the CCER that represent Canadian mod chip distributors because they would enable them to stay in business. See, The Owens analysis of the Canadian copyright consultations: what are the implications? which exposed how the CCER attempted to game the copyright reform consultations with its letter writing wizard in an attempt to persuade the government to introduce weak anti-circumvention copyright legislation. See also, The Owens analysis of the Canadian copyright consultations: what are the implications?

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