[Politech] Canadian Supreme Court rules on Net music, ISP liability [ip]

From: Declan McCullagh (declan@private)
Date: Tue Jul 06 2004 - 21:33:07 PDT


-------- Original Message --------
Subject: Canadian Supreme Court on Net Music, ISP Liability
Date: Mon, 5 Jul 2004 13:38:41 -0400
From: Michael Geist <mgeist@private>
To: Declan McCullagh <declan@private>
References: <40E0E41D.5000607@private>

Declan,

I can't recall if you covered last week's Canadian Supreme Court
decision involving online music and ISP liability.  If not, your
readers may be interested in my column out today that examines the
case. The column argues that the case may damage the music industry's
strategy of suing individual file sharers as one member of the court
offered a strong endorsement of respecting end user privacy in
interpreting copyright law, noting that the court "should eschew an
interpretation that would encourage the monitoring or collection of
personal data gleaned from Internet-related activity within the
home." Column at
<http://shorl.com/bunovidralybo> [Toronto Star]
Decision at
http://www.lexum.umontreal.ca/csc-scc/en/rec/html/2004scc045.wpd.html

MG

Balancing rights of creators, users

MICHAEL GEIST
LAW BYTES

Last week's Supreme Court online music tariff decision - popularly
known as the Tariff 22 case - culminated nine years of legal
wrangling as the Society of Composers, Authors and Publishers of
Music in Canada (SOCAN), a leading Canadian music collective, failed
in its attempt to pin a new royalty for downloaded music on Canada's
Internet service providers. The result marks another defeat for the
music industry that lost not only this case, but also received
signals from Canada's highest court that its file sharing litigation
may be in for further trouble.

  The Tariff 22 case dates back to 1995 when SOCAN first applied for a
new tariff for downloading online music. After four years of
hearings, the Copyright Board of Canada issued a decision in 1999
that largely absolved Internet Service providers from collecting such
a tariff.

  The case was appealed to the Federal Court of Canada, which ruled in
2002 that ISPs might be required to pay some royalties due to the
common practice of caching content on their servers to speed up its
delivery. The court reasoned potential liability was appropriate
since caching was not strictly necessary to deliver content and thus
it fell outside of the intermediary exemption found in the Copyright
Act.

  The Supreme Court last week overturned the Federal Court decision,
thus protecting the ability to deploy innovative technologies such as
caching that improve the efficiency of the Internet. Canadian ISPs
breathed a sigh of relief as the court concluded that "when massive
amounts of non-copyrighted material are accessible to the end user,
it is not possible to impute to the Internet service provider, based
solely on the provision of Internet facilities, an authority to
download copyrighted material as opposed to non-copyrighted material."

Moreover, the court again emphasized the importance of a copyright
balance between creators and users, noting that the protection of
intermediaries such as ISPs is not a loophole in the Copyright Act,
but rather a critical part of the balance.

Although some in the music industry professed to be pleased by the
outcome, the decision marked a strong rejection of SOCAN's ISP
liability legal theory leaving the copyright collective with a
proposed tariff that few deep-pocketed ISPs will be required to pay.

  In fact, the decision may be even more damaging to the industry than
it appears at first blush. While the case does not directly address
peer-to-peer file sharing, many copyright experts openly speculated
about whether the Supreme Court might use the Tariff 22 case to
provide some insight into its views on peer-to-peer file sharing in
light of last March's federal court decision denying the Canadian
Recording Industry Association's request for information on the
identities of 29 computer users who allegedly uploaded music files
onto peer-to-peer networks.

Given that the case is currently on appeal, the court not
surprisingly did not specifically refer to the decision. It did,
however, address two issues that would appear to support Judge Konrad
von Finckenstein's findings on the scope of Canadian copyright law
and on the importance of factoring privacy rights into the copyright
analysis.

With respect to the scope of Canadian copyright law, Judge von
Finckenstein and the Supreme Court both emphasized that copyright
analysis should be confined to Canadian copyright law as it currently
is, not as it might be should we follow the lead of the United States
in amending our law.

  In the file sharing suit, Judge von Finckenstein referenced the
controversial World Intellectual Property Organization (WIPO)
Internet treaties and concluded that the "treaty has not yet been
implemented in Canada and therefore does not form part of Canadian
copyright law." Similarly, the Supreme Court of Canada noted that
Canada's response to the WIPO treaties "remains to be seen" and that
in the meantime Canadian courts must transpose the existing Copyright
Act to emerging technologies.

More importantly, both Judge von Finckenstein and Justice Louis LeBel
of the Supreme Court articulated the view that respect for privacy
rights must be factored into copyright analysis.

In the file sharing decision, Judge von Finckenstein ruled that
Canadian law requires a balancing between privacy rights on one side
and the rights of others as well as the public interest on the other,
concluding that the privacy interests of the alleged file sharers
outweighed the public interest concerns favouring the disclosure of
their identities.

  In its pending appeal, the recording industry has argued that Judge
von Finckenstein "erred in stating that it was common ground that ISP
subscriber defendants had an expectation that their identity would be
kept private and confidential" and further erred that "the privacy
concerns of the ISP subscriber defendants outweighed the public
interest in disclosure."

That argument may be in for a rough ride in light of a concurring
opinion buried at the end of the Tariff 22 decision in which Justice
LeBel left little doubt about where he stands on the importance of
protecting privacy rights in copyright cases. Justice LeBel argued
that the Court should adopt an interpretation of the reach of the
Copyright Act that "respects end users' privacy interests" and it
"should eschew an interpretation that would encourage the monitoring
or collection of personal data gleaned from Internet-related activity
within the home."

In fact, Justice LeBel was particularly concerned with approaches
that examine the Internet retrieval practices of end users,
suggesting that this encourages the monitoring of an individual's
surfing and downloading habits. He concluded by noting that the
"privacy interests of individuals will be directly implicated where
owners of copyrighted works or their collective societies attempt to
retrieve data from Internet Service providers about an end user's
downloading of copyrighted works. We should therefore be chary of
adopting a test that may encourage such monitoring."

Although it is unclear whether the remainder of the court shares
Justice LeBel's privacy concerns, there is no doubt that he has
succeeded in sending a clear warning against any copyright
enforcement strategies that fail to adequately account for user
privacy. While it took nine years to obtain a final resolution of the
legal issues associated with the online music tariff, the case will
not take that long to resonate in other courts. With the file sharing
appeal around the corner, the Supreme Court's decision will not be
music to the recording industry's ears.

-- 
**********************************************************************
Professor Michael A. Geist
Canada Research Chair in Internet and E-commerce Law
University of Ottawa Law School, Common Law Section
Technology Counsel, Osler, Hoskin & Harcourt LLP
57 Louis Pasteur St., Ottawa, Ontario, K1N 6N5
Tel: 613-562-5800, x3319     Fax: 613-562-5124
mgeist@private              http://www.michaelgeist.ca



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