Next Steps: The Aftermath Following the Dismissal by the Federal Court of Canada of CRIA's Motion For Disclosure In File Sharing Suits

© 2004, Deeth Williams Wall. All Rights Reserved By: Colin Adams, Student at Law (April 14, 2004)

As reported in the E-Tips Special Report (Vol 2, No 21, March 31, 2004), the Federal Court of Canada dismissed the Canadian Recording Industry Association's (CRIA) motion to compel several Internet Service Providers (ISPs) to disclose the names of customers who allegedly traded music on the Internet. In reaching its decision, the Court made three key conclusions:

In addition, the Court made two additional key findings regarding copyright infringement and privacy. Not only did the Court conclude that copying a song for personal use does not amount to infringement, it went on to hold that the mere placement of personal copies of music files in a shared directory which can be accessed via a P2P service does not amount to distribution or authorization. In keeping with the position that the privacy rights of individuals must be balanced against the public interest, the Court ruled that the privacy concerns outweighed the public interest concerns in favour of disclosure in this case given the unreliability of the data and the serious possibility of an innocent account holder being identified.

In reaction to what for many commentators was a surprising decision, CRIA will now regroup and consider its next steps. Shortly after the decision was released, CRIA announced its intention to appeal. In doing so, CRIA will undoubtedly attempt to find a more convincing way to present its arguments for infringement. In his reasons for judgement, Justice Konrad von Finckenstein was critical of CRIA's decision to submit the affidavit of Gary Millin, the President of MediaSentry Inc., whose company was employed by CRIA to investigate the file sharing of songs by Canadians. Mr. Millin did not conduct tracking of the file sharers nor was he able to provide evidence to support how his company linked Internet protocol addresses to the file sharer aliases. Further, the Court questioned CRIA's decision to wait to file its motion for disclosure while it continued to gather evidence, thus allowing the reliability of the information to weaken somewhat.

In addition, it is expected that CRIA will intensify its lobbying campaign in an attempt to speed the copyright reform process. From CRIA's perspective, the key change would be the speedy ratification and implementation of the rights contained in the WIPO treaties – the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT) – into Canadian copyright law.

The WPPT offers greater promise for CRIA since it would give sound recording producers and performers the exclusive right to make available copyright material on an on-demand basis. In other words, if ratified, the WPPT would give CRIA the exclusive right to make its recordings available in a P2P environment. In meeting this goal, CRIA has the support of the Minister of Canadian Heritage, Hélène Scherrer, who has vowed to make changes as soon as possible to outlaw the free file sharing of copyrighted music.

Currently, the Intellectual Property Directorate of Industry Canada and the Canadian Heritage Copyright Policy Branch are studying proposed changes to modernize Canada's Copyright Act (the Act) and make it more responsive to challenges and opportunities presented by Internet and digital technologies. Tabled in Parliament in October 2002, the Supporting Culture and Innovation: Report on the Provisions and Operation of the Copyright Act (the Section 92 Report), identified key issues for short term consideration which included ratification of the WCT and the WPPT, photographic works, Internet Service Provider (ISP) liability, and access. To that end, the Minister of Canadian Heritage and Minister of Industry presented a status report (Status Report) to the Standing Committee on Canadian Heritage – it sets out the progress and the work that remains to be done on the short term issues.

The Status Report considered a number of key issues relating to the implementation of the WCT and WPPT in the context of online file sharing:

• A "Making Available" Right: At present, it is believed that the Act's current exclusive communication right for authors satisfies the making available right provisions under the WCT. However, amendments would be required in order to implement the making available right under the WPPT for performances and sound recording. The Status Report suggests that the amendment to satisfy the making available right under the WPPT could be effected by giving sound recording producers and performers an exclusive making available right with respect to on-demand communication of their material. Alternatively, the amendment could be effected by a granting a new exclusive making available right both to authors and sound recording producers and performers.
• Legal Protection of Technological Measures: Both the WCT and WPPT contain and require provisions against the circumvention of a technological protection measure (TPM) such as encryption. There is currently no provision in the Act that prohibits the circumvention of a TPM. Although a TPM would need to be defined, it is suggested that the Act be amended to introduce a remedy against acts of circumvention of TPMs when done for purposes of infringing copyright. In addition, a further provision is being considered against distributing copyright material from which a TPM has been removed or rendered ineffective.
• Legal Protection of Rights Management Information: Similarly, there is no provision in the Act that specifically protects against tampering with rights management information (RMI). The WCT and WPPT contain provisions that require this form of protection. At present, RMI would be defined as information used in association with digital material, such as the name of the author, performer, title, and terms and conditions of use. The approach being considered is to amend the Act to introduce a remedy against tampering with RMI when done for the purposes of furthering or concealing infringement. A further provision is also being considered against knowingly distributing copyright material from which the RMI has been removed.
• Moral Rights For Audio Performers: Although the Act provides authors with moral rights for their works, performers are not accorded the same rights for their performances. The inclusion of this right would be required by the WPPT. While the Status Report suggests that the Act should be amended to include such a right, it notes that further consideration is required for the application of moral rights to live performances and the potential implications that the extension of such rights may have for specific interests such as live music promoters or music venues.
• Reproduction Right For Performers: The Act's exclusive reproduction right for performers is currently limited to fixations made without their consent. The WPPT would require a full reproduction right, which would entail the exclusive right to authorize any fixation or any reproduction of a performer's performance fixed in the preceding 50 years. The approach under consideration is to amend the Act to grant performers a full reproduction right that would apply retrospectively. However, the Status Report notes that consideration must be given to the application of full reproduction right to online uses of old material relating to performers from several decades ago.
• Private Copying – Implications For Ratification: The Act includes an exception to copyright that permits the making of a copy of a sound recording for personal use. The Act also provides for a levy to be paid by manufacturers and importers of blank audio recording media, which is then distributed to authors regardless of nationality, but only to Canadian sound recording producers and audio performers. The WPPT would require that the treatment of nationals of member countries be no worse than that of one's own nationals In addition, there is a further requirement that any exception be consistent with certain specific standards, e.g. that the exception not interfere with the normal exploitation of the performance or sound recording. Consequently, questions have arisen regarding Canada's ability to comply with the WPPT provisions without making changes to the existing private copying regime. The Status Report states that this issue continues to be analyzed and, as yet, no approaches have been suggested to deal with this issue.
• Internet Service Providers' Liability: The Act contains a limited exemption from copyright liability for persons that merely provide the necessary means of telecommunication. At present, ISPs can qualify for this exemption. However, the Status Report notes that the extent of an ISP's reliance on this exemption will be clarified when the Supreme Court of Canada sets down its ruling in the Tariff 22 case, which considers the liability, if any, of ISPs to pay royalties for the telecommunication of copyright material over their facilities. Two potential approaches are being considered to deal with this issue. First, the Act could be amended to exempt ISPs from any liability for copyright infringement when they act merely as intermediaries. ISPs failing to comply with requirements designed to deal with the removal of infringing material communicated over their facilities could be subject to civil suits. Second, the Act could alternatively be amended to provide that ISPs would be subject to liability for copyright material on their facilities. Following this scenario, ISPs could only escape liability if they meet certain prescribed conditions such as timely and effective "action" in responding to the requests of rights holders regarding copyright material on their facilities. Action could include such things as forwarding notices regarding infringing material or collecting royalties for copyright material.

For a copy of the CRIA decision, see: http://makeashorterlink.com/?A22C230F7..

For a copy of the Status Report on Copyright Reform, see: http://makeashorterlink.com/?Q398211F7.

For more information, see: http://makeashorterlink.com/?D1C8221F7; http://makeashorterlink.com/?A5D8231F7; http://makeashorterlink.com/?M2F8121F7; http://makeashorterlink.com/?F509231F7.

For more information on the Tariff 22 case, see the article, "Supreme Court of Canada Begins Hearing Arguments On Tariff 22".

Contact James Kosa for additional information on Disclosure In File Sharing Suits.