Christopher Zaleski
Print
Version
In a landmark decision,
the Supreme Court of Canada unanimously held that Internet Service Providers
(ISPs) cannot be held liable for violations of copyright law committed
by their subscribers. The Canadian Court found that ISPs simply provide
the means for the telecommunication of published materials, and accordingly
are shielded from liability under s. 2.4(1)(b) of the Copyright Act
, R.S.C. 1985, c. C-42 (the "Act"), which deems that participants
in a communication who only provide the means that are necessary for telecommunications
are deemed not to be communicators.
The decision marks the culmination
of close to ten years of litigation and regulatory appeals, which began
in 1995 when the Society of Composers, Authors and Music Publishers of
Canada (SOCAN), asked the Copyright Board (the "Board") to impose royalties,
known as Tariff 22, on ISPs that facilitated the transfer of published
works over the Internet. The central concern was the downloading of music
files. SOCAN argued that ISPs were infringing on the rights of copyright
owners to communicate and authorize the communication of their works to
the public found in section 3(1)(f) of the Act.
The Board refused to hold ISPs
liable because of the exception found in section 2.4(1)(b) of the Act.
The Federal Court of Appeal found that the exception did not apply to
ISPs due in part, to the practice of caching by ISPs. Caching refers to
the temporary storage of data on servers of ISPs. The majority ruled that
when ISPs engage in caching they are no longer simply facilitators of
the telecommunications process, but become communicators and attract liability
for copyright infringement.
The Canadian Supreme Court accepted
the Board's finding that ISPs fall within the exception provided in section
2.4(1)(b) of the Act. The relevant test is to look at each transaction
individually to determine whether an intermediary acts merely as a conduit
for communications for other persons, or whether it is acting as something
more.
The practice of caching did not
vitiate the exception according to the Supreme Court, since caching "is
a serendipitous consequence of improvements in Internet technology, is
content neutral .and ought not to have any legal bearing on the communication.
. Caching is dictated by the need to deliver faster and more economic
service, and should not, when undertaken only for such technical reasons,
attract copyright liability."
Knowledge of potential infringements
by subscribers does not make the ISP liable for authorizing the infringement
because ISPs are entitled to presume that their facilities will be used
in accordance with the law, and ISPs do not grant licenses or permission
to subscribers that permit infringement.
In order to determine Canadian jurisdiction in Internet copyright matters,
the Supreme Court found that there must be a "real and substantial connection"
between Canada and the country where the communication originated. Relevant factors
include a consideration of location of the content provider, the host server,
intermediaries and the end user. The Court rejected the Board's ruling that
jurisdiction could only be asserted where the host server was located in Canada.
This decision is in line with international
trends in Internet copyright law, and a recent Supreme Court of Canada
decision that found that the Law Society of Upper Canada could not be
found to authorize copyright infringement by providing photocopying machines
which could be used to infringe copyright.
For a copy of the decision, visit:
http://www.lexum.umontreal.ca/csc-scc/en/rec/html/2004scc045.wpd.html
