“Made in Canada” online copyright infringement regime coming into force
June 24, 2014

by Brian Isaac and Daniel Anthony

The Canadian government announced on June 17, 2014 that Canada’s new Notice and Notice regime for online copyright infringement will come into force without further amendment or regulation as early as January 2015.

The Notice and Notice regime

The Notice and Notice regime is defined in sections 41.25, 41.26 and 41.27 of the Copyright Act, which are the last provisions of the 2012 Copyright Modernization Act to come into force. The government delayed implementation to consider the need for a regulatory process, but determined the Notice and Notice regime could function within the existing framework of the Copyright Act.

The Notice and Notice regime has been described by the government as a “made in Canada” solution to copyright infringement on the Internet. The regime affects Internet service providers (ISPs), hosts, search engine providers, copyright owners and alleged infringers.

Under the regime, when an ISP or host receives proper notice of copyright infringement from a copyright owner, they must forward the notice as soon as feasible to the customers associated with the content. These two notices result in the Regime being described as a “Notice and Notice” regime. The ISP or host must inform the copyright owner once the notice has been forwarded and retain a record of the notice for six months, or one year if the copyright owner commences a court proceeding. ISPs or hosts who fail to comply are subject to statutory damages of at least $5,000, but no more than $10,000.

With respect to search engine providers, liability for automated and passive reproductions is limited to injunctive relief. However, once an infringing work has been taken down pursuant to a notice of copyright infringement, a search engine provider that receives proper notice must remove reproductions of the work (e.g. cached images) within 30 days, or lose the limitation on relief.

Canadian privacy law

The limited nature of the Notice and Notice regime is consistent with current Canadian privacy laws. However, recent developments highlight the difficulties that may be faced in finding the correct balance between privacy rights and enforcement against unlawful activity online.

For instance, Bill S-4, the Digital Privacy Act, has been passed by the Senate and is currently proceeding through the House of Commons. It proposes amendments to the Personal Information Protection and Electronic Documents Act (PIPEDA). PIPEDA governs the collection, use and disclosure of personal information, including by private sector organizations for commercial purposes. Under PIPEDA personal information may only be disclosed without consent in limited circumstances, such as pursuant to a warrant or court order (section 7(3)(c)), or to an investigative body or the government under a reasonable belief that the information relates to breach of an agreement or the laws of Canada (section 7(3)(d)). Bill S-4 proposes amendments to, among other things, permit private sector organizations to disclose personal information to each other without consent if the disclosure is “reasonable for the purposes of investigation of a breach of an agreement or a contravention of the laws of Canada”, and there is a reasonable expectation that seeking consent would compromise the investigation.

In the meantime, on June 13, 2014, the Supreme Court of Canada released the R v Spencer, 2014 SCC 43, decision in which the court recognized constitutional protection for an anonymity privacy interest in the context of Internet usage. In the case, the Supreme Court found that it was an unlawful search and seizure for the police to obtain personal information from an ISP without a warrant in a child pornography investigation, despite an exception in PIPEDA that permits an ISP to disclose information to police who have stated their lawful authority for the request. The court found that the evidence obtained in the case before it could be used despite the unlawfulness of the search since the request and provision of information had been done in good faith and did not bring the administration of justice into disrepute. However, police will now be well advised to obtain search warrants in light of the decision.

With respect to civil litigation, Canadian courts have been willing to order ISPs to disclose identity information to Plaintiffs in proceedings involving online infringement of rights. However, the courts require evidence of the need for the disclosure, and may impose limitations on use of the information. For instance, as reported in our February 25, 2014 IP Update, in a recent decision in Voltage Pictures LLC v John Doe, 2014 FC 161, the court ordered an ISP to release the identity of 2000 subscribers alleged to have illegally downloaded an adult movie, but placed restrictions on the use of the information to prevent abuse.

Contrast to U.S. Notice and Take Down regime

Recognition of the privacy rights of Internet users must be balanced by the need to obtain identity information to address online crime and abuse of rights. The “made in Canada” approach appears to promote the need for court proceedings to balance the interests more than some other systems. For instance, the Notice and Notice copyright regime may be contrasted with the U.S. Notice and Take Down (DMCA) regime that has been in place since 1998. Under the U.S. regime, an ISP is liable for infringement of copyright unless, upon notice of the claimed infringement, it responds expeditiously to remove or disable access to the alleged infringing content. The user whose content has been removed is notified by the ISP and may make a counter-notice that includes contact information, in which case the ISP may put the material back up if the complainant does not file a lawsuit. Under the Canadian regime, ISPs have no obligation to remove content (though they may do so voluntarily) and the copyright owner will have to go to court for relief if the alleged infringer does not respond to the notice. Further, as matters stand, the rights owner will face an initial hurdle and expense when trying to identify the infringer, likely including the need to obtain a court order to compel a third party to provide the private information.

Looking Forward

It will be interesting to see whether Canadian Internet practices will change once the notice and notice provisions are operative. It will also be interesting to watch for further legislative and jurisprudential developments, including when the effectiveness of the provisions is considered during legislative review of the ongoing copyright modernization effort.

For further information, please contact Brian Isaac or another member of our firm’s Copyright & Media group.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

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