What did the Supreme Court of Canada say about notice and notice in the SOCAN Tariff 22 case?

Last month, the US based Computer & Communications Industry Association submitted a report to the United States Trade Representative (USTR) in response to a request for comments in the USTR’s 2010 Special 301 Review. The Washington based CCIA made a submission in which it argued that Canada should not be placed on the Special 301 watch list.

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 theE-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

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

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