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Western Journal of Legal Studies

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Recent Developments in Canada’s “Notice and Notice” Regime

By Don Karl Roberto

 

Introduction

            Earlier this year, the Western Journal of Legal Studies published a paper by Western Law alumnus Colin Hyslop[1] on the Federal Court of Appeal’s decision in Voltage Pictures LLC v Rogers Communication Inc.[2] The case centred around the recovery of costs incurred in complying with Canada’s “notice and notice” regime and a Norwich order. In summary, the FCA held that Rogers (the Internet service provider (ISP)) was not able to recover costs for complying with a Norwich order because the steps taken in complying with a Norwich order are the same as Rogers’s obligations under the “notice and notice” regime, which does not allow for cost recovery. Mr. Hyslop suggests that the FCA’s decision undermines the purpose of the “notice and notice” regime and that the Supreme Court should overturn this decision; he was right.

 

“Notice and Notice”

            ISPs assign Internet Protocol (IP) addresses to each device connected to the ISP’s network, and these IP addresses are associated with an Internet subscriber. The “notice and notice” regime[3] allows copyright holders to notify an Internet subscriber that his or her IP address has been implicated with an alleged copyright infringement activity; however, the copyright holder does not directly contact the subscriber. Instead, the copyright holder provides a “notice of claimed infringement” to the relevant ISP.[4] The ISP must then determine—for the purpose of forwarding the notice—to whom the IP address was assigned at the time. The scope of this identification is limited, as an ISP only needs to obtain the subscriber’s e-mail address to forward the notice; thus, the ISP would not have to determine the subscriber’s name and physical address. The ISP only provides the copyright holder with confirmation that the notice was forwarded, and does not provide to the copyright holder any of the subscriber’s personal information; further, the ISP is not able to recover costs associated with this process.[5] For a copyright holder to obtain the subscriber’s personal information, the copyright holder must obtain a Norwich order against the ISP.[6] In complying with a Norwich order, an ISP is able to recover “reasonable costs” associated with the process.[7]

            In Voltage v Rogers, Voltage served Rogers with a Norwich order to compel Rogers to disclose subscriber information. Rogers agreed to comply only if Voltage paid a fee, which the federal court allowed.[8] On appeal, Stratas J.A. for the FCA held that “Rogers failed to adduce sufficient evidence” in respect of the “actual, reasonable and necessary costs that can and should be compensated” and allowed the appeal.[9] In Mr. Hyslop’s article, he argued that the FCA’s decision would (1) result in increased Internet subscription costs, and (2) compromise user privacy,[10] specifically because it is possible that the person to whom notice is served may not necessarily be the person who committed the alleged infringement.[11] The Supreme Court decision sheds light on some of these concerns.

 

Voltage at the Supreme Court

            The main issue before the Supreme Court was who should bear the ISP’s “reasonable costs of compliance” in discharging its obligations under a Norwich order.[12] In discharging obligations under the “notice and notice” regime, the ISP only needs to gather information such that the ISP can determine “to whom the IP address belonged” in order to “forward the notice electronically” to the appropriate customer.[13] Brown J. held that otherwise requiring the ISP to gather more information about the IP address (e.g., subscriber’s name and physical address) would run contrary to “balancing the interests of all stakeholders” since this would require more work for ISPs.[14] Further, the Court disagreed with the FCA’s interpretation of s. 41.26(1)(b) of the Copyright Act; specifically, the Court held that it was not contemplated that copyright holders would “have access to or use” these records.[15] The Court also held that “retaining” information did not mean “translating” the information such that copyright holders could also read these records.[16]

The Court listed three obligations under the “notice and notice” regime that are not compensable, which are (1) determining who was assigned the IP address at the time of the alleged infringement, (2) verifying that information, and (3) “taking all steps necessary to verify the accuracy of records which would permit the ISP to identify the name and physical address of the person to whom notice was forwarded;”[17] however, Brown J. distinguished this final verification step from the Norwich order obligation to “identify a person from its records”, costs for which are recoverable.[18] In the end, the Court held that “Rogers is entitled to its reasonable costs of compliance with the Norwich order”.[19]

            In concurring, but separate reasons, Côté J. stated that “any work required to determine an alleged infringer’s identity and to disclose that identity pursuant to a Norwich order is not subsumed within the notice and notice regime and can therefore be subject to compensation in accordance with the common law.”[20] Côté J. also stated that she believes that an ISP should be able to recover costs for manually verifying the subscriber’s information when this information will be handed over to the copyright holder because it cannot be assumed that the notice makes its way to the correct individual in every instance.[21]

            In regards Mr. Hyslop’s suggestion that Internet users’ privacy may be violated, the Court discussed the fact that a subscriber’s being associated with an impugned IP address is not conclusive of that person’s guilt.[22] Because the “notice and notice” regime was not legislated to provide the copyright holder with the subscriber’s personal information, it is not expected that an ISP would, in fulfilling its obligations under “notice and notice”, have to determine the name and physical location of the subscriber; to expect so would “be to the detriment of the privacy interests of persons, including innocent persons, receiving notice.”[23] Bill C-86—which has just completed its second reading in the Senate—also addresses these concerns and would amend s. 41.25 of the Copyright Act to include restrictions for content included in the notice of claimed infringement; such prohibited content includes offers to settle the claimed infringement and requests or demands for payment or personal information.[24]

 

Conclusion

            The Supreme Court’s ruling in Voltage sheds light on some of the concerns that Mr. Hyslop raised in his article. In particular, by allowing ISPs to recover the costs associated with taking steps that are uniquely associated with complying with a Norwich order, ISPs should not be overly burdened with these costs, and should not—for those reasons—raise Internet subscription prices. Secondly, the Supreme Court has ruled that expecting ISPs to, in compliance with a “notice and notice” claim, gather the subscriber’s name and physical location constitutes a privacy violation. Finally, if Bill C-86 is passed and the Copyright Act is amended accordingly, subscribers would have an extra level of protection through the prohibition of coercive tactics by copyright holders. The Supreme Court made clear that the “notice and notice” regime and Norwich orders continue to exist as separate instruments, with the latter remaining as the primary way in which a copyright holder can take direct action against an alleged infringer.

 

 

 

 

[1] Colin Hyslop, “Much Ado About Five Hundred Dollars: Why the SCC Should Overturn Rogers v Voltage” (2018) 8:2 UWO J Leg Stud 4.

 

[2] Voltage Pictures LLC v Rogers Communication Inc, 2017 FCA 97 [Voltage FCA].

 

[3] An Act respecting copyright, RSC 1985, c C-42, s 41.25 [Copyright Act].

 

[4] Ibid, s 41.25(1)(a).

 

[5] Ibid, s 41.26(2). The provision states that “[t]he Minister may, by regulation, fix the maximum fee that a person [the ISP] may charge for performing his or her obligations under subsection (1). If no maximum is fixed by regulation, the person may not charge any amount under that subsection”. At the time of writing, no regulations have been made; therefore, in effect, an ISP cannot charge for discharging its obligations under the notice and notice regime.

 

[6] Norwich Pharmacal Co and others v Commissioners of Customs and Excise, [1973] 2 All ER 943 (HL).

 

[7] Rogers Communications Inc v Voltage Pictures LLC, 2018 SCC 38 at para 10, Brown J for Wagner CJ and Abella, Moldaver, Karakatsanis, Gascon, Rowe and Martin JJ [Voltage SCC].

 

[8] Voltage Pictures LLC v John Doe No 1, 2016 FC 881 at para 18.

 

[9] Voltage FCA, supra note 2 at para 75.

 

[10] Hyslop, supra note 1 at 7.

 

[11] Ibid at 12.

 

[12] Voltage SCC, supra note 7 at para 4.

 

[13] Ibid at para 37.

 

[14] Ibid at para 40. This is because not all “notice and notice” orders lead to Norwich orders.

 

[15] Ibid at para 43.

 

[16] Ibid at para 44.

 

[17] Ibid at para 51.

 

[18] Ibid at para 52.

 

[19] Ibid at para 58.

 

[20] Ibid at para 62.

 

[21] Ibid at paras 70–71.

 

[22] Ibid at para 41.

 

[23] Ibid.

 

[24] Bill C-86, A second Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures, 1st Sess, 42nd Parl, 2018, cl 4(7)(c), s 243 (as passed by House of Commons 3 December 2018) [Bill C-86].

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