The article discusses the dynamics of why ISPs and rights holders should be motivated to work together to solve the problem of online file sharing. Apart from good business reasons, she points out that today ISPs are increasingly deploying “smart” technologies within broadband networks. Technologies like deep packet inspection (DPI) have given operators an unprecedented level of control over the content that flows through their pipes. These enhanced capabilities of ISPs may also increase their exposure to copyright liability as they are less and less “dumb pipes”.

Prof. Bridy proposes a set of principles to guide the implementation of private graduated response regimes. She contends that ISPs and rights owners “must take it upon themselves, in the interest of the customers they aim to get and keep, to ensure that their private arrangements for enforcing copyrights online are both adequately transparent and meaningfully consumer protective.”

The article proposes that privately implemented graduated response regimes be designed to minimize the likelihood of mistaken responses, to maximize opportunities for consumer compliance before the imposition of any sanction, and to limit the duration of any access-related sanction imposed in the absence of a neutral adjudication of infringement. In this regard, the following principles are suggested:

• Users should be given an opportunity to contest notices of infringement with their ISPs as the notices are received and before any sanction is imposed.
• When it comes to adding up strikes, ISPs should count a single notice of infringement that alleges multiple instances of infringement as only one ―strike against the subscriber receiving the notice.
• The principle underlying graduated response is that sanctions should escalate as infractions accrete. The disciplinary approach is an incremental one, and in the interest of consumer protection, there should be more, rather than fewer, increments when it comes to the nature and duration of access-related sanctions. To maximize opportunities for Internet users to comply, ISPs that agree to implement a graduated response regime should graduate the access-related sanctions they impose, beginning with a speed sanction after three uncontested notices and graduating to a brief suspension of access with the fourth.
• Broadband providers should provide full disclosure of their copyright enforcement practices to prospective and existing customers.

Others including professors Alain Strowel and Olivier Bomsel have separately made strong arguments for graduated response systems. Prof. Bridy’s article provides an analysis of the legal liability reasons why ISPs and content owners should work together. While the analysis flows from the copyright liability regime in the US, her analysis could well resonate in Canada in view of the decision of the Supreme Court in Society of Composers, Authors, and Music Composers of Canada v. Canadian Association of Internet Providers, [2004]  S.C.R. 427, 2004 S.C.C. 45 which conditioned certain ISP immunities on ISPs being a dumb pipe and being unable to discern the nature of the content flowing through their systems.

The article also provides practical insights into how a voluntary graduated response system might be implemented.

In support of its argument, it stated that the International Intellectual Property Alliance (IIPA) in its Section 301 Report had stated that “Canada has a notice and notice regime for dealing with copyright owner complaints over the online presence of their works, which the Supreme Court of Canada recently held provides effective remedies to copyright owners, Society of Composers, Authors, and Music Composers of Canada v. Canadian Association of Internet Providers, [2004]  S.C.R. 427, 2004 S.C.C. 45.”

It is unclear from the CCIA statement whether it was saying that the IIPA had stated that the Supreme Court had expressed the opinion that notice and notice provides effective remedies to copyright owners, or whether it was making this claim itself. The IIPA never made the statement. In fact, it made the opposite assertion saying:

“…most other developed countries have put in place a procedure for “notice and takedown” to deal more efficiently  with the problem of pirate material being hosted by ISPs. A 2004 decision of Canada’s Supreme Court (SOCAN v. CAIP) observed that enacting such a procedure would be an “effective remedy” for the problem. But the current Canadian government – and its predecessors – appear to be steadfastly opposed to the procedure. Bill C-61 continued this unfortunate trend, confining itself to the same “notice and notice” regime proposed by the Canadian government years ago. One approach is not a substitute for the other. Requiring ISPs to forward notices from  copyright owners to infringing end-users, and to preserve identifying information on those end-users for six months, has value, particularly in the peer-to-peer (p2p) environment. But a “notice and takedown” regime is needed to provide an expeditious means of removing or disabling access to infringing content hosted online. Particularly if coupled with an obligation to terminate the accounts of repeat or serious infringers, combining these approaches could be a useful part of a system that gives ISPs strong incentives to effectively address the dissemination of infringing materials.”

Moreover, the IIPA also pointed out that “there is no evidence that the voluntary “notice and notice system” in which some Canadian ISPs participate has had any appreciable impact on online infringements.”

Accordingly, it has to be assumed that the CCIA itself was asserting that in the SOCAN Tariff 22 case the Supreme Court had stated that notice and notice was an effective system for dealing with online infringements. It is uncertain why the CCIA would make this claim. In the Tariff 22 case, the Supreme Court actually stated that the current law in Canada was inadequate for addressing the responsibilities of ISPs for infringing content which they host and recommended that Canada implement a notice and take down regime like the one enacted under the US DMCA.

The Tariff 22 case, which I know a lot about since I argued the case before the Supreme Court with my partner Tom Heintzman, involved several important issues. One issue was whether ISPs are liable for authorizing the infringement of copyright if they fail to remove hosted infringing content after receiving a notice of infringement.

In their submissions on the appeal, the ISPs had provided the Court with legislative developments internationally including EU and US developments to assist the Court in formulating policies related to ISP liability in the Internet context. The judgement of the Court shows that the Court had read these materials and had formulated specific opinions about the need for law reform in Canada.

For example, the Court, more than 6 years ago in its 2004 decision, noted that other countries had moved forward to clarify their laws related to the Internet and that Canada had not and that this left Canadian courts struggling with how to address copyright issues associated with the Internet:

“In the United States, unlike Canada, detailed legislation has now been enacted to deal specifically with the liability of Internet intermediaries; see theDigital Millennium Copyright Act, 17 U.S.C. § 512 (1998).  Australia has enacted its Copyright Amendment (Digital Agenda) Act 2000, No. 110 of 2000. The European Commission has issued a number of directives, as will be discussed.  Parliament’s response to the World Intellectual Property Organization’s (“WIPO”) Copyright Treaty (1996), CRNR/DC/94,  and the Performances and Phonograms Treaty (1996), CRNR/DC/95, remains to be seen.  In the meantime, the courts must struggle to transpose a Copyright Act designed to implement the Berne Convention for the Protection of Literary and Artistic Works of 1886, as revised in Berlin in 1908, and subsequent piecemeal amendments, to the information age, and to technologies undreamt of by those early legislators.” at para. 43

On the issue of ISP liability for authorizing infringement by hosting infringing content, the Court held that “copyright liability may well attach if the activities of the Internet Service Provider cease to be content neutral, e.g. if it has notice that a content provider has posted infringing material on its system and fails to take remedial action.” at para. 124

In reaching this conclusion, the Supreme Court referred to international standards including the laws in the US under the DMCA and in the EU under the E-Commerce Directive. The Court noted that the existing Canadian law placed ISPs in a difficult legal position of not knowing whether a claim it receives from a content provider is well founded. This requires it to decide whether to choose between contesting a copyright action or potentially breaching its contract with the content provider. After reviewing the deficiencies with the current Canadian system, the Court stated that a more effective remedy would be the enactment of a notice and take down procedure. On this issue, the Court stated the following:

“In the present appeal, the Federal Court of Appeal stated that, in the case of host servers, “an implicit authorization to communicate infringing material might be inferred from their failure to remove it after they have been advised of its presence on the server and had a reasonable opportunity to take it down” (para. 160).  Reference was made to Apple Computer Inc. v. Mackintosh Computers Ltd., reflex, [1987] 1 F.C. 173, aff’d 1990 CanLII 119 (S.C.C.), [1990] 2 S.C.R. 209, at pp. 211 and 208, citing C.B.S. Inc. v. Ames Records & Tapes Ltd., [1982] 1 Ch. 91, at p. 110, i.e., an Internet Service Provider may attract liability for authorization because “. . . indifference, exhibited by acts of commission or omission, may reach a degree from which authorisation or permission may be inferred.  It is a question of fact in each case . . . .”  See also Godfrey v. Demon Internet Ltd., [1999] 4 All E.R. 342 (Q.B.).

The knowledge that someone might be using neutral technology to violate copyright (as with the photocopier in the CCH case) is not necessarily sufficient to constitute authorization, which requires a demonstration that the defendant did “(g)ive approval to; sanction, permit; favour, encourage” (CCH, at para. 38) the infringing conduct.  I agree that notice of infringing content, and a failure to respond by “taking it down” may in some circumstances lead to a finding of “authorization”.  However, that is not the issue before us.  Much would depend on the specific circumstances.  An overly quick inference of “authorization” would put the Internet Service Provider in the difficult position of judging whether the copyright objection is well founded, and to choose between contesting a copyright action or potentially breaching its contract with the content provider.  A more effective remedy to address this potential issue would be the enactment by Parliament of a statutory “notice and take down” procedure as has been done in the European Community and the United States.” at paras 126-227

The Government placed significant emphasis on implementing new measures for success in the modern economy and in particular, for building the jobs and industries of the future. As the Government pointed out, we face new challenges, determined new competitors, and are in a “relentless pace of technology” change. We as Canadian “must keep step as the world races forward”.

The throne speech rightly recognized that to move ahead Canada needs a digital economy strategy and appropriate amendments to our copyright and other IP laws to create the incentives and legal infrastructure to support it:

“To fuel the ingenuity of Canada’s best and brightest and bring innovative products to market, our Government will build on the unprecedented investments in Canada’s Economic Action Plan by bolstering its Science and Technology Strategy. It will launch a digital economy strategy to  drive the adoption of new technology across the economy. To encourage new ideas and protect the rights of Canadians whose research, development and artistic creativity contribute to Canada’s prosperity, our Government will also strengthen laws governing intellectual property and copyright.”

The Government also recognized our need to work cooperatively with our trading partners and to reach agreements with them that will foster economic growth. This appears to include working with the EU with for a Free Trade Agreement (CETA). Though not expressly mentioned, it could include continued participation with our major trading partners in the ACTA negotiations to address worldwide trade in counterfeiting and piracy. The throne speech stated the following in this regard:

“Ensuring the broadest possible market for Canada’s goods and services will require the aggressive pursuit of free trade. Our Government will implement free trade agreements with Peru and the European Free Trade Association and ask Parliament to ratify new agreements with Colombia, Jordan and Panama. Given the disappointing results of the Doha round of multilateral trade negotiations and the rapidly evolving global marketplace, our Government will aggressively diversify opportunities for Canadian business through bilateral trade agreements. It will continue trade negotiations with the European Union, India, the Republic of Korea, the Caribbean Community and other countries of the Americas. Building on the successful negotiation of new or expanded air agreements with 50 countries around the world, our Government will pursue additional agreements to achieve more competition, more choice for Canadians and more economic growth.”

The throne speech also mentioned that the Government plans to introduce legislation to “give police investigative powers for the twenty-first century. Canada’s police officers and chiefs have asked for these vital tools to stay ahead of the tactics adopted by today’s criminals.” This may suggest that the Government intends to re-introduce Bills C-46 and C-47 (lawful access), or variants of these bills in new legislation.

The Government also expressly mentioned “Working with provinces, territories and the private sector” to “implement a cyber-security strategy to protect our digital infrastructure”. This is a critically needed initiative that many other countries have recognized, or are urgently recognizing.

The throne speech did not expressly mention re-introducing the anti-SPAM bill, Bill C-27 (the ECPA). In light of the Government’s concerns about cyber-security, one would aslo expect any future bill that addresses spyware and other forms of malware will be put forward without the unintended consequences associated with previous attempts including ensuring  that such legislation does not inadvertently make it illegal to combat cyber-terrorism or other online threats.

Of course, we have had promises for some of these reforms, like to copyright, in successive throne speeches and the governments of the day have not made good on them.

Further, the devil will be in the details. We don’t just need copyright reforms, for example. We need reforms that will make a difference. That means copyright reforms that will be consistent with international standards so that we can ratify the WIPO Treaties. It means amendments that will protect ISPs when they act as true intermediaries and foster collaboration between ISPs and rights holders to reduce online file sharing and boost legitimate sales of creative products. It also means clarifying exceptions to infringement for users in a way that provides certainty as to what is legal while at the same time not undermining the economic incentives of our english, french and other cultural industries to create and disseminate works for the benefit of the public.