Supreme Court Rules: ISPs Can Collect Fees from Copyright Owners in Infringement Cases
A recent Supreme Court of Canada decision could have wide-reaching implications for Internet service providers (“ISP”s), copyright owners and copyright infringers.
In Rogers Communications Inc. v. Voltage Pictures, LLC, the Supreme Court had to decide who must bear the costs where film copyright holders seek to find illegal downloaders and copyright infringers by obtaining information from ISPs.
The case began after Voltage Pictures and several other film production companies (“Voltage”) alleged that the copyrights to several of their films had been infringed online by unidentified Internet subscribers using peer-to-peer file sharing networks. Voltage brought a motion for a Norwich order to compel Rogers Communications (“Rogers”), as the ISP to an unknown copyright infringer, to disclose the infringer’s contact and personal information. A Norwich order is a type of pre-trial discovery which allows a rights holder to identify wrongdoers.
Voltage relied on sections 41.25 and 41.26 of the Copyright Act, referred to as the “notice and notice” regime, to obtain disclosure from Rogers without paying any fees or disbursements. Upon receipt of a notice from the copyright owner, these sections of the Copyright Act require the ISP to forward the notice of claimed infringement to the person to whom the IP address was assigned and prohibit ISPs from charging a fee for complying with such obligations.
Rogers argued that the statutory requirements did not prohibit charging fees for compliance with a Norwich order; unlike the Copyright Act provisions, a Norwich order requires further steps in providing disclosure of a subscriber’s identity to a copyright owner.
Rogers uses an automated system to notify users under the notice and notice statutory regime, which it estimates to equal approximately 200,000 to 300,000 notices of claimed copyright infringement each month. However, Rogers claimed that complying with a Norwich order required eight steps in a manual process to disclose the identity of one of its subscribers and asked for $100 per hour of work plus HST to perform such steps.
The motion judge allowed for the recovery of costs by Rogers, but that decision was reversed on appeal.
The Supreme Court unanimously allowed the appeal by deciding that Rogers was entitled to reasonable costs for compliance with a Norwich order in providing copyright infringers’ information to copyright owners.
At the outset of its decision, the court explained that the notice and notice regime was enacted to serve two purposes: (1) to deter online copyright infringement; and (2) to balance the rights of interested parties.
It noted, however, that the notice and notice regime was not “intended to embody a comprehensive framework by which instances of online copyright infringement could be eliminated altogether.” While the regime serves its purpose of notifying alleged copyright infringers, a copyright owner must obtain a Norwich order to compel the ISP to disclose that person’s identity. Thus the statutory regime and the use of Norwich orders are separate and complementary means of enforcing the rights of copyright holders.
Therefore, the court concluded:
“To be clear, there is a distinction between an ISP’s obligation under the notice and notice regime to ensure the accuracy of its records that allow the identity of the person to whom an IP address belonged to be determined, and an ISP’s obligation under a Norwich order to actually identify a person from its records. While the costs of the latter are recoverable, the costs of the former are not.”
However, the court stated that ISPs are not entitled to be compensated for every cost incurred; recoverable costs must be reasonable and must arise from compliance with the Norwich order.
The exact amount Rogers may be entitled to recover was sent back to the Federal Court for determination.
The implications of this case are clear for copyright holders. While this case stemmed from a Norwich order to obtain information about one user, Voltage had indicated its intent to ultimately pursue a “reverse class action” against approximately 55,000 persons. Therefore, depending on what the Federal Court determines to be “reasonable” costs, the amount payable to Rogers could potentially climb into the millions. The impact this has on a copyright holder’s decision to pursue legal action will in turn affect ISPs and copyright infringers alike.
Navigating a legal dispute can be stressful and full of uncertainty, no matter what the nature of the dispute may be or how serious it is. Getting advice from the right lawyer can make the process significantly less overwhelming and can even shorten the time it takes to resolve the issue.
Mark Feigenbaum is a highly experienced litigator with significant experience in entertainment law and a wide range of other legal practice areas as well as the related disciplines of tax and accounting. Contact the offices of Feigenbaum Law for more information on this matter and other legal questions. Contact Mark Feigenbaum online or call him at (905) 695-1269 or toll-free at (877) 275-4792 to book a consultation.