ACCORD

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May 31, 2021

This submission is being submitted jointly by Canada’s songwriters, composers, and music publishers as well as the organizations and collective management organizations that support them.

Modernizing the Copyright Act to ensure Canadian rights holders have the same protections as their international competitors is a much-needed move to help Canadian creators, and the companies that invest in them, to continue exporting their creations around the world. A globally competitive copyright regime will foster Canadian innovation, investment, and growth in a key economic sector for our great country.

Executive summary

This submission is filed on behalf of APEM, CCMIA, CMRRA, MPC, SAC, SCGC, SOCAN and SPACQ (together, “ACCORD”).

Together, ACCORD represents over 160,000 English and French-Canadian songwriters, composers and publishers as our members. We are pleased to submit this document that addresses the policy issues concerning music creators and other members of the Canadian music industry in the digital age. This submission forms our collective response to the consultation process on a modern copyright framework for online intermediaries organized by the Government of Canada.

ACCORD makes the following recommendations in response to each of the points in the consultation

Topic ACCORD Recommendation
4.1 Clarify online intermediaries’ safe harbour protections
4.1.1 Recalibrate the knowledge standard for eligibility The “hosting” safe harbour should not apply to an online intermediary who has received notice of infringement from a rights holder, or becomes aware of facts or circumstances where infringement would be apparent.
4.1.2 Clarify the permitted involvement of qualifying intermediaries The “conduit” safe harbour should be clarified to only apply to Internet Service Providers that provide access to the Internet.

ACCORD recommends that the Government of Canada adopt the approach in the EU Copyright Directive 2019/790 that certain online intermediaries are communicating to the public and are required to obtain authorizations from the appropriate rights holders. Safe harbour protections should not apply where an online intermediary is actively involved in content curation, moderation, and filtering nor should an online intermediary who profits off copyright infringement be protected.

4.1.3 Enact new obligations for qualifying intermediaries ACCORD recommends that online intermediaries enact “notice-and-staydown” mechanisms for infringements on their services.
4.2 Compel remuneration through collective licensing
Compulsory licensing Compulsory licensing is an inappropriate remedy for modernizing the copyright framework for online intermediaries. Implementing compulsory licensing is a step backwards for copyright reform and replaces the exclusive rights of creators with simply a right to remuneration. ACCORD recommends that this option be rejected.
Extended collective licensing There may be an opportunity for an extended collective licensing (“ECL”) system in the digital world for certain rights holders and for certain uses. However, the benefits and risks of ECL need to be examined more closely and further study is therefore needed.
Private copying reform Although this topic was not addressed in the consultation paper, ACCORD recommends the private copying regime be made technologically neutral, expanding to smartphones and tablets to reflect where unlicensed copying occurs.
4.3 Increase transparency in remuneration processes
4.3.1 Greater transparency from intermediaries ACCORD recommends that statutory mechanisms are needed to require online intermediaries to provide adequate information to rights holders and collectives regarding the intermediaries’ practices and the use of music on their platforms.
4.3.2 Greater transparency from rights management organizations Transparency already exists at Canada’s Rights Management Organizations (“CRMO”) and adequate information is already available to the general public, government and rights holders (including the songwriters, composers and publishers who are represented through this submission). Intermediaries should therefore be, at the very least, held to the same standard as CRMO.
4.4 Clarify or strengthen enforcement tools against online infringement
4.4.1 Establish a statutory basis and procedure for injunctions against intermediaries ACCORD recommends that the Copyright Act be amended to include a statutory procedure for seeking site-blocking and de-indexing injunction orders against online intermediaries, regardless of the online intermediaries’ own liability, to provide a streamlined and efficient enforcement tool for rights holders.
4.4.2 Clarify or strengthen other enforcement tools against online infringement ACCORD recommends that section 27(2.3) be amended to remove the requirement to prove “an actual infringement of copyright” and that general knowledge of infringing activity is sufficient to enforce this section.

ACCORD addresses each of the potential options for copyright reform posed by the consultation paper according to the numbering and headings used.

4.1 Clarify online intermediaries safe harbour protections

The consultation paper sets out the following types of safe harbour protections for online intermediaries in the Copyright Act:

  • a "mere conduit" safe harbour shields from liability anyone who merely provides the means for the telecommunication or reproduction of copyright-protected content by way of the Internet or other digital network;
  • a "caching" safe harbour shields anyone who merely stores such content as data so future commands drawing upon that data can be performed faster to make the telecommunication more efficient; and
  • a "hosting" safe harbour shields anyone who merely provides digital memory in which another person stores copyright-protected content for the purpose of allowing its telecommunication through the Internet or other digital network.

ACCORD addresses each of these safe harbour protections and recommendations for clarifying these protections in the points below.

4.1.1 Recalibrate the knowledge standard for eligibility

There is no knowledge standard applied to either the “mere conduit” safe harbour nor the “caching” safe harbour. As a result, ACCORD’s submission focuses on the sole safe harbour that does have a knowledge standard for eligibility, being the “hosting” safe harbour.

The current knowledge standard for the “hosting” safe harbour is that the safe harbour applies unless the host knows of a decision of a court of competent jurisdiction to the effect that a user of the host’s service is infringing copyright.

ACCORD submits that this knowledge standard is too high.

An example of this should demonstrate the problem. Consider a rights holder who informs and proves to a host that a user’s content hosted on its site is infringing the rights holders’ copyright. This does not affect the host’s safe harbour, because the notification from the rights holder is not a “decision of a court of competent jurisdiction”. There is no legal liability to a host to continue hosting this infringing content despite knowing that the content is infringing. The rights holder is forced to obtain a legal decision that the content is infringing before the “hosting” safe harbour evaporates. This presents a further issue: how does the legal decision apply if the user closes their account and simply creates a new account hosting the same infringing content? It may mean the rights holder has to obtain another decision of a court of competent jurisdiction to apply to that same user.

Instead of this high threshold, ACCORD recommends leveraging the “notice-and-notice” system already in place. Once a rights holder sends a notice of claimed infringement to the host, then the host has received knowledge of facts or circumstances where infringing content may be hosted on their service and the safe harbour does not apply. In addition, ACCORD recommends that absent notice, where a host becomes aware of facts or circumstances that infringing materials are hosted on their service, such as content caught through an automatic copyright filtering algorithm, then the safe harbour does not apply in that circumstance either.

Recommendation:

ACCORD recommends the “hosting” safe harbour should not apply to an online intermediary who has received notice of infringement from a rights holder, or becomes aware of facts or circumstances where infringement would be apparent.

4.1.2 Clarify the permitted involvement of qualifying intermediaries

The consultation paper notes that although the safe harbours are consistent with the principle that the safe harbours only apply where an online intermediary acts in a neutral manner this is not expressly stated in the Copyright Act.

ACCORD recommends that this principle needs to be enshrined in the Copyright Act to provide clarity for rights holders and online intermediaries. Furthermore, ACCORD recommends that the Government of Canada look to the EU Copyright Directive 2019/790 to recalibrate Canada’s safe harbour system to be closer to the EU model.  

ACCORD notes that the language used in the “mere conduit” safe harbour can be interpreted to expand to online intermediaries that act beyond being a “mere conduit.” The language in the “mere conduit” safe harbour states that any online intermediary “in providing services to the operation of the Internet...providing any means for the telecommunication or the reproduction of a work or other subject-matter through the Internet….does not, solely by reason of providing those means, infringe copyright in that work or other subject-matter.” The problem with this safe harbour is the nebulous term “any means” can apply to practically any services provided by an online intermediary, including active monitoring, curation, or moderation.

ACCORD submits that the intention of the “mere conduit” safe harbour is to specifically capture Internet Service Providers (ISPs), and not all online intermediaries. For clarity, we recommend that rather than the “providing services” the language be changed to specify that it applies to those who “provide access” to the Internet to solely capture ISPs.

In Article 17 of the EU Copyright Directive 2019/790, online intermediaries defined as “online content-sharing service providers” are performing an act of communication to the public or an act of making available to the public when it gives the public access to copyright-protected works or other protected subject matter uploaded by its users. This means that the default rule for “online content-sharing service providers” is that a licence from rights holders is required to operate their services. Certain online intermediaries such as not-for-profits, open source software-developing and sharing platforms and providers of electronic communications services are excluded from the definition of “online content-sharing service provider.” The effect of this provision is that it identifies certain services, the “online content-sharing service providers”, that do not qualify for safe harbour protection.      

The current safe harbours in the Copyright Act start from the opposite premise of Article 17 of the EU Copyright Directive 2019/790, that is, the safe harbours broadly apply to online intermediaries, including “online content-sharing service providers”, unless they are disqualified from safe harbour protection. ACCORD recommends we start from a similar premise as the EU: all online intermediaries (or a specific subset to be defined) are performing an act of communication to the public or an act of making available to the public, such that obtaining the proper authorization from rights holders is necessary. There could be exceptions where an online intermediary may qualify for a safe harbour but it would be up to the online intermediary to meet the designated criteria for qualifying. This places the burden of proof for safe harbour qualification on the proper party: the online intermediary has to prove that they qualify for the safe harbour, rather than the rights holder proving that the online intermediary should be disqualified.

In light of the above, the principle of neutrality identified by the consultation paper would not necessarily need to be included if we take an approach similar to the EU because a specific subset of online intermediaries would not qualify for safe harbour protections. However, if the current safe harbour system is maintained then the principle of neutrality should be expressly included in the Copyright Act to set out that any of the safe harbours do not apply to an online intermediary that takes an active role in the curation, moderation, or filtering of content and that an online intermediary who profits off copyright infringement does not qualify for the safe harbours. This will provide clarity for rights holders and online intermediaries because the current uncertainty is unworkable.

Recommendation:

ACCORD recommends the “mere conduit” safe harbour should be clarified to only apply to Internet Service Providers that provide access to the Internet.

ACCORD recommends that the Government of Canada adopt the approach in the EU Copyright Directive 2019/790 that certain online intermediaries are communicating to the public and are required to obtain authorizations from the appropriate rights holders. Safe harbour protections should not apply where an online intermediary is actively involved in content curation, moderation, and filtering, nor should an online intermediary who profits off copyright infringement be protected.

4.1.3 Enact new obligations for qualifying intermediaries

The current obligation on online intermediaries that qualify for safe harbour protections is a standalone obligation - that is, compliance with the “notice-and-notice” regime whereby an online intermediary that receives notice of claimed infringement from a rights holder forwards that notice to the allegedly infringing user and maintains records for six months for the rights holder to identify the allegedly infringing user if proceedings are commenced. This regime is not connected to the safe harbour protections and the failure of an online intermediary to comply with this regime is statutory damages between $5,000 to $10,000.

ACCORD recommends linking new obligations for online intermediaries to their safe harbour protections. These obligations could be included as part of the proposed revised knowledge standard for hosts. As proposed, once a host is provided a notice of claimed infringement from an online intermediary or is aware of facts or circumstances where infringement would be apparent, the safe harbour protections would not apply. However, an additional obligation could be added that could save an online intermediary from losing their safe harbour protection. An example of this would be that once a host receives notice of claimed infringement, they have an obligation, subject to certain safeguards to ensure the claim of infringement is a strong prima facie case, to remove that content and make sure it stays down (a so-called “notice-and-staydown” system). 

ACCORD recommends a “notice-and-staydown” system because of a recent study from the U.S. Copyright Office found that the “notice-and-takedown” system is flawed and does not appropriately balance the interests of rights holders with the interests of online intermediaries.Footnote 1 As a result of this report, a “notice-and-staydown” system is being contemplated for the U.S.

We note that Canada is free to adopt a “notice-and-staydown” system under CUSMA (Canada-United States-Mexico Agreement).

CUSMA contains provisions that enable Canada to maintain its current “notice-and-notice” framework. Annex 20-B, section 1(c) provides that some of the requirements set out in Article 20.88 do not apply to signatories that require ISPs to forward notices of alleged infringement and subject them to monetary damages if they fail to do so.

Article 20.88 sets out a framework of legal remedies and ISP safe harbours.  It states, among other things, that the framework shall include conditions for whether or not ISPs qualify for limitations that have the effect of precluding monetary relief against them. For example, ISPs that provide storage must move expeditiously to remove or disable access to material residing on their networks upon obtaining receipt of a notice of alleged infringement. An ISP that removes or disables access to material in good faith shall be exempt from liability for having done so, provided it takes reasonable steps to notify the person whose material is removed.  The regime must also include appropriate procedures for effective counter-notices, requiring the ISP to restore the material unless the person giving the original notice seeks legal relief within a reasonable period of time set by law or regulation.

Two things about these provisions are important. First, CUSMA allows Canada to maintain its notice-and-notice framework but it does not require it to do so. Canada is free to adopt a system that fits within Article 20.88. Second, Article 20.88 does not, in itself, preclude the introduction of a “notice-and-staydown” regime, so long as the regime complies with the prescribed legal framework. For example, a “notice-and-staydown” regime that required an ISP, upon notice, to prevent the same work from being available on its service again in the future, could be adopted so long as the regime included a counternotice procedure, exemptions from monetary relief for ISPs, and otherwise complied with the framework set out in Article 20.88 of CUSMA.

Recommendation:

ACCORD recommends that online intermediaries enact “notice-and-staydown” mechanisms for infringements on their services.

4.2 Compel remuneration through collective licensing

4.2.1 Compulsory licensing

A compulsory licensing scheme is not a modernization of the Copyright Act but a step backwards. The last amendments to the tariff-setting regime have moved away from a mandatory filing system for performing rights collectives (previously these collectives had to file tariffs to be able to enforce their rights, a restriction that did not exist for collectives under the “general” regime). This is indicative of Parliament’s intention to provide performing rights collective societies with more options for licensing users - either through the tariff-setting process through the Copyright Board or private negotiated licences. Rather than forcing terms of trade on collectives and online intermediaries, there is a recognition that these parties can adequately and effectively negotiate terms among themselves.

Compulsory licensing also eliminates one of the central tenets of the Copyright Act - that a rights holder has exclusive rights to negotiate licences (or not) with any parties as they see fit. Compulsory licensing replaces this exclusive right with a right to remuneration, which is not the same thing. ACCORD recommends that this option for copyright reform be rejected unequivocally.

Recommendation:

ACCORD states that compulsory licensing is an inappropriate remedy for modernizing the copyright framework for online intermediaries. Implementing compulsory licensing is a step backwards for copyright reform and unfairly replaces the exclusive rights of creators with simply a right to remuneration. ACCORD recommends that this option be rejected.

4.2.2 Extended collective licensing

ACCORD acknowledges that there may be benefits to extended collective licensing (“ECL) for collective societies and online intermediaries. However, the general information provided in the consultation paper is insufficient to fully analyze whether this scheme would work in Canada. Additionally, implementation of ECL may vary in its application from sector to sector.

We submit that a fulsome look at ECL is outside the scope of this consultation. While there may be promising benefits to ECL, there are many practical risks that require further input from all interested parties.

Recommendation:

There may be an opportunity for an extended collective licensing (“ECL”) system in the digital world for certain rights holders and certain uses. However, the benefits and risks of ECL need to be examined more closely.

4.2.3 Private copying reform

The Canadian Private Copying Collective (CPCC) makes this submission in conjunction with ACCORD.

The consultation paper is focused primarily on licensing and enforcement issues affecting the online marketplace, but regardless of how these issues are addressed within the Copyright Act, a modern private copying regime is needed to address the gap between enforcement and licensing.

Private copying presents a unique challenge: technology keeps making it easier for consumers to copy music, but it is not always possible for rights holders to license or enforce against those copies. In recognition of this challenge, the Copyright Act was changed in 1997 to allow Canadians to copy music onto audio recording media for their private use. In return, the private copying levy was created to remunerate creators and music companies for that use of their work.

Under the Copyright Act, manufacturers and importers of blank audio recording media pay the CPCC a small, one-time levy for each unit imported and sold in Canada, to compensate music rights holders for unlicensed private copying of their work. Those levies are then distributed to rights holders through CPCC’s member collectives, representing recording artists, songwriters, music publishers and record companies.

For many years since its creation, the private copying regime was an important source of earned income, generating a total of over $300 million in revenue for over 100,000 music creators and the companies that invest in them. Unfortunately, the regime has been limited since 2010 to a single blank audio recording medium, now virtually obsolete: recordable CDs. That means annual compensation for rights holders has plummeted from $38 million in 2004 to $1.1 million in 2019 – even as copying activity more than doubled.Footnote 2

Chart depicts reduction in levies collected from approximately $38 million in 2004 to approximately $2 million in 2019.

 

This income source is now on the verge of disappearing entirely, which is fully and completely at odds with the reality of private copying activity in Canada. Streaming may have taken over from the days of mixed tapes and burning CDs, but Canadians still make billions of private copies for listening offline.

The CPCC’s most recent researchFootnote 3 shows that there are 5.95 billion tracks of music currently stored on Canadians’ phones and tablets, and that half of those copies are unlicensed. Unlicensed, and no levy – that is a lot of revenue out of the pockets of music rights-holders. The Copyright Act has not kept pace with technology, leaving rights holders unpaid.

  • 5.95 billion tracks of music are currently stored on Canadians’ phones & tablets
  • 1/2 of the copies were made in the prior 12 months
  • 1/2 of the copies were paid for through licensed downloading and streaming services
  • 1/2 of the copies were unlicensed

In contrast to the situation in Canada, global collections for private copying rose from €310 million in 2015 to €1.046 million in 2018. Moreover, most of the countries around the world with functioning private copying regimes – including Austria, Belgium, Croatia, France, Germany, Hungary, Italy, Netherlands, Portugal and Switzerland – extend levies to a wide variety of devices.Footnote 4

Private copying levies continue to be recognized internationally as the best solution to provide compensation to rights holders for this ongoing and valuable use of their work that cannot be controlled.

ACCORD recommends that Canada’s private copying regime be made technologically neutral, and thereby expanded to allow levies on devices like smartphones and tablets where Canadians are currently making private copies. The Copyright Board would ultimately determine the value of any approved levy on devices, but CPCC’s proposal is a small fraction of the cost of a device, comparable to the average levy payable on a smartphone in Europe: around CDN$3, or the price of a cup of coffee.Footnote 5

Wherever possible, rights holders will continue to license the streaming and downloading of music from online sources, including the right to make copies from these licensed sources. Levies certified by the Copyright Board have always been discounted to exclude the value of authorized copies, so that the regime is focused on private copies that cannot be controlled. CPCC will also propose minor revisions to the Act to clarify that this exception to copyright infringement does not extend to offering or obtaining music illegally, whether through an unlicensed online service, stream-ripping, or by stealing an album from a store – such activity remains illegal. The private copying regime is for copying that cannot be controlled.

Recommendation:

ACCORD recommends that the Government amend the Copyright Act to make the private copying regime technologically neutral; the focus of these amendments would be to allow the regime to apply to both audio recording media and devices.

4.3 Increase transparency in remuneration processes

4.3.1 Greater transparency from intermediaries

Not all online intermediaries are cooperative with collectives and rights holders by providing the necessary financial information and music usage information to negotiate appropriate licence fees. Rights holders can be left in a difficult position - how do you blindly negotiate a licence fee based on revenue sharing when you do not know the online intermediaries revenues nor how much music they use on their platform?

This issue could be solved by implementing a statutory mechanism for rights holders to obtain information from online obstructionist intermediaries. Such a mechanism is set out in the EU Copyright Directive 2019/790 at Article 17.8 stating that online intermediaries shall, upon rights holders’ request, provide adequate information on the functioning of their services and information on the use of content covered by licensing agreements.Footnote 6 ACCORD recommends a similar amendment to the Copyright Act.

Recommendation:

ACCORD recommends that statutory mechanisms are needed to require online intermediaries to provide adequate information to rights holders and collectives regarding the intermediaries’ practices and the use of music on their platforms.

4.3.2 Greater transparency from rights management organizations

Rights Management Organizations generally already provide public information about their repertoires, detailed statements to their members, and regular information about collections and distributions.

Recommendation:

ACCORD believes transparency already exists at Canada’s Rights Management Organizations and that adequate information is already available to the general public, government and rights holders (including the songwriters, composers and publishers who are represented through this submission).

4.4 Clarify or strengthen enforcement tools against online infringement

4.4.1 Establish a statutory basis and procedure for injunctions against intermediaries

Internet intermediaries, such as ISPs, hosting providers, and search engines, are best placed to prevent or limit large-scale commercial infringement of copyright on the Internet.

However, the Copyright Act does not specifically authorize Canadian courts to order an ISP or hosting service to block access to an infringing website (often referred to as a “site blocking order”) or require a search engine to prevent an infringing site from showing up in its search results (a “de-indexing order”), without risk of liability. Moreover, the notice-and-notice regime established in 2012 gives intermediaries little incentive to help combat online piracy.

As a result, rightsholders typically have no recourse but to commence legal proceedings against the commercial infringers. Those proceedings often resemble costly and futile games of whack-a-mole, with infringing content popping up elsewhere on the Internet almost as soon as it is removed from another location.

In this way, the Copyright Act is out of step with the law of many other countries, no fewer than 42 of which—including the United Kingdom, Australia, India, Singapore, and most of the European Union—have adopted and implemented blocking orders directed at ISPs. That discrepancy is contrary to Parliament’s acknowledgement that, in the digital era, copyright protection is enhanced when international efforts are coordinated.

ACCORD therefore proposes that the Copyright Act be amended to authorize a court, on application by a rightsholder, to grant a site blocking or de-indexing injunction, with worldwide effect, on a “no fault” basis to the Internet intermediary.

The issues

i) Large-scale commercial infringement on the internet

Canadian rightsholders are harmed by services that facilitate and profit from the large-scale commercial infringement of copyright on the Internet. Those services include torrent portals, such as the infamous Pirate Bay website, and cyberlockers that host copyright-protected material that may be shared with other users. Such services are designed to capitalize on the infringement of copyright: they typically permit anonymous users to upload content at no charge, host the content free of charge, reward users who post popular content (even if pirated), and derive more advertising revenue the more users visit the site.

Infringement of this type harms the creative industries. The Digital Citizens Alliance suggests that “ad-supported content theft has become a big business and harms a wide range of players in the digital economy and threatens the future of a free and open Internet.” The European Union Intellectual Property Office estimated that, in 2014 alone, digital piracy resulted in €170 million in lost revenue across the European Union.

(ii) The Copyright Act does not provide sufficient tools to prevent this conduct

Due to their technical capabilities and the role that they play in hosting, locating, and delivering content, Internet intermediaries are best placed to prevent and mitigate large-scale commercial infringement of copyright. Indeed, it is not often feasible for a copyright owner to enforce its rights directly against infringing services, which are typically sophisticated, able to conceal their identities and locations. Even if a service removes infringing content in response to a user request, the content is often reposted quickly on another website of the service. And many infringing services are located outside Canada, immune from the jurisdiction of Canadian courts.

Internet intermediaries benefit greatly from the availability of high-quality content, whether licensed or not, through their facilities. Properly calibrated, the Copyright Act would enlist intermediaries as partners in ensuring that content is made available only with rights holder consent. The most effective way to do that is by helping to prevent Canadians from accessing content through infringing means. Unfortunately, the Act does not do enough to encourage intermediaries to block or de-index websites that make infringing content available.

(iii) Broad exemption for network services

Under the Copyright Act, “network services,” such as ISPs and hosting services, are exempt from liability for copyright infringement solely for providing the technical means for the infringement to occur. As a result, Internet intermediaries have little direct incentive under the Copyright Act either to prevent third parties from using their services to infringe copyright or to intervene when they do.

(iv) No real consequences under the “notice and notice” regime

The notice and notice regime does not do enough to prevent or limit large-scale commercial infringement of copyright on the Internet. Where a copyright owner delivers a notice of claimed infringement, a network service is required only to forward the notice to the appropriate person (such as its subscriber) and to retain certain records in case a rightsholder chooses to initiate litigation against the alleged infringer. Unlike in other jurisdictions, the service is not required to take down or de-index the content.

There are also no meaningful consequences for a network service that fails to comply with those minimum requirements. A non-compliant network service will continue to be immune from infringement liability under the broad exemption described above. The only potential consequence is a potential award of statutory damages in a nominal amount. This is unlike other jurisdictions, such as the U.S., where a non-compliant intermediary loses the broad immunity offered under the “safe harbour” laws.

The regime applies slightly differently to search engines. The Copyright Act limits the relief available against a search engine to injunctive relief, so long as the search engine has made only passive and automated reproductions of the copyrighted material, and subject to certain other conditions. However, that relief misses the mark by requiring the rights holder to take legal action, and prove infringement, against the search engine itself, rather than by permitting a rights holder to seek an order requiring the search engine, on a no-fault basis, to block or de-index sites that make infringing content available. Only the latter option would ensure that the resources of both litigants and courts are properly focused on the practical issue of preventing and limiting online copyright infringement by large scale, commercial services.

(v) Online enablers escape the jurisdiction of Canadian Courts

In 2012, Parliament attempted to target entities that facilitate online infringement by introducing a new form of secondary infringement that targets so-called “online enablers” – services that are provided “primarily for the purpose of enabling acts of copyright infringement.” But the applicable provisions, however well-intentioned, fall short of a complete solution. For one thing, they impose upon a rightsholder the onerous burden of proving that an actual infringement of copyright has occurred by means of the service, as opposed to establishing general knowledge that infringing activity is occurring. For another, they appear to apply only to entities located in Canada, thus excluding the vast majority of infringing torrent sites and cyberlockers, which operate outside Canadian borders. By allowing foreign enablers to escape the jurisdiction of Canadian courts, the regime thus makes it all too easy for Canadians to continue to access infringing content through sites and services that would be illegal if located in Canada.

Clear, predictable, and fair legislation providing for site-blocking injunctions would provide necessary certainty for all stakeholders, thereby avoiding unnecessary and costly litigation. It would also close an egregious loophole in the Copyright Act that allows foreign sites and services to trample on the rights of copyright owners and encourages Canadians to use those sites and services to access infringing content.

Support from Canadian Courts

The authority of Canadian courts to issue broad de-indexing injunctions has been recognized by the Supreme Court of Canada in the recent decision of Google Inc. v Equustek Solutions Inc. ACCORD now proposes that the Copyright Act be amended to provide “clear, predictable and fair rules” – an objective that Parliament recognized as desirable in the preamble to the Copyright Modernization Act – in relation to the issuance of both site-blocking and de-indexing injunctions in cases of copyright infringement.

In Equustek, the Supreme Court upheld a decision of the British Columbia Court of Appeal granting a global interim de-indexing injunction, requiring Google to de-index various web pages from its search results, with worldwide effect. In doing so, the Supreme Court acknowledged that it may be necessary, in certain circumstances, to grant an injunction enjoining conduct anywhere in the world. The Court reasoned that the only way to ensure that the injunction attained its objective was to have it apply where Google operates: globally.

The Equustek decision was critical to the very recent decision in Teksavvy Solutions Inc. v. Bell Media Inc. v. GoldTV.biz, in which the Federal Court of Appeal confirmed that a justice of the Federal Court had jurisdiction to issue Canada’s first site-blocking order and did not err by doing so in the circumstances of that case. In that case, the broadcasters had previously obtained interim and interlocutory injunctions against the unknown operators of GoldTV, an IPTV service, but those injunctions were ineffective at terminating the infringement. The broadcasters then sought an interlocutory injunction requiring certain Canadian Internet service providers to take steps to block their customers from accessing websites and Internet services operated by GoldTV. The Federal Court relied on its equitable jurisdiction to grant the relief, looking to the experience in the United Kingdom to guide the test for whether to grant the injunction. 

The Equustek and Teksavvy decisions provide support for the proposition that global site-blocking and de-indexing orders against Internet intermediaries are the natural evolution of a court’s inherent jurisdiction. They also recognize that the issuance of an injunction against an intermediary is often the only practical solution to prevent or limit large-scale commercial infringement by others who rely on the intermediary’s services and facilities to achieve their commercial goals. As the Supreme Court recognized, an injunction was necessary in Equustek to address the irreparable harm that flowed from the infringement of the plaintiff’s valuable intellectual property – misconduct that would be commercially impossible without Google’s facilitation. The Federal Court of Appeal recognized in Teksavvy that the same reasoning will often apply in a copyright case.

While helpful, however, neither Equustek nor Teksavvy offers a full solution. In Teksavvy, the Federal Court of Appeal emphasized that nothing in the Copyright Act (or, for that matter, the Telecommunications Act) serves to prevent a court from exercising its equitable jurisdiction to issue a blocking order in a copyright case. It also dismissed as “pointless and unfair” any requirement that a plaintiff “jump through certain hoops and wait a certain time to confirm what it already knows, and the court already accepts,” or even to avail itself of the statutory notice-and-notice process, before seeking an injunction against a third party. But none of that is a substitute for the predictability and efficiency that a clear statutory process would provide.

International solutions

Many of Canada’s major trading partners have enacted legislation that expressly permits courts to issue site-blocking injunctions with worldwide effect.

(i) European Union

In 2001, the EU adopted the InfoSoc Directive, discussed above, to harmonize and adapt the copyright law of member states to technological developments. The InfoSoc Directive acknowledges that, “in many cases [Internet] intermediaries are best placed to bring … infringing activities to an end.” Thus, article 8(3) of the Directive instructs member states to “ensure rightsholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right.”

All member states are required to adopt the Directive into domestic law. A number of member states have since implemented article 8(3) into their national laws, including Austria, Greece, Latvia, and Belgium, while the laws of other member states already included such provisions.

(ii) United Kingdom

Applications for site blocking injunctions are now common in the U.K. and often proceed in writing, without a formal hearing.  Article 8(3) of the Directive is embodied in section 97A of the U.K. Copyright, Designs and Patents Act 1988, which authorizes courts to grant a site blocking injunction against a service provider that is aware that another person is using the service to infringe copyright.

The knowledge requirement is not to be “interpreted too restrictively.” A service provider is not required to know the exact person who is using their services to infringe copyright, but instead may only have knowledge that infringement is occurring in general. Knowledge may be inferred where a rights holder has provided a notice of infringement. Moreover, a rights holder is not required to name as a party to a section 97A application the person or organization that is responsible for the infringement. This is logical and practical, given that these infringers often take deliberate steps to conceal their identities and locations.

Site blocking in the U.K. has resulted in significant reductions to the activity levels on some of the most popular websites for accessing and distributing infringing content. A study on the efficacy of site blocking injunctions found that, between March 2012 and August 2014, site blocking resulted on average in a 73.2% decrease in activity on targeted websites. The study found as well that the decrease remained consistent over time.

(iii) Australia

The Australian Copyright Act 1968 was amended in 2015 to introduce section 115A, which itself was amended in 2018 to further expand the relief available to copyright owners. As amended, section 115A permits the Federal Court of Australia to issue an injunction requiring a “carriage service provider” (including an ISP) or an “online search engine provider” to take reasonable steps to disable access to online locations outside Australia that have either the primary purpose or the primary effect of infringing or facilitating the infringement of copyright in Australia or elsewhere. Notably, this is a “no fault” remedy, meaning that the party seeking the injunction is not required to show that the service provider itself committed or encouraged copyright infringement. In addition, the party seeking the injunction is not required to include the operator of the online location as a party to the proceeding unless that person asks to be joined.

These amendments appear to have resulted in a significant reduction in traffic to blocked websites. A preliminary study on the results of site-blocking injunctions since December 2016 showed a 71.7% decrease in the overall usage of the blocked sites from within Australia. These results mirror those in the U.K., as referenced above, and stand as further evidence of the efficacy of site blocking as a potent tool for rights holders to combat widespread copyright infringement.

(iv) Singapore

In 2014, Singapore amended its Copyright Act (Chapter 63) to authorize a court to order an injunction “requiring the network service provider to take reasonable steps to disable” an online location that is being used to “flagrantly commit or facilitate infringement of copyright.” The legislation prescribes certain factors to be considered by the court in determining whether a website is being used for such purposes. The party seeking a site-blocking injunction is not required to name the operator of the online location as a party to the proceeding; it is required only to give notice of the proceeding to that person. Moreover, the court may dispense with the notice requirement if satisfied that the plaintiff, despite reasonable efforts, has been unable to determine the identity or address of that operator.

Summary

The decisions of the Supreme Court of Canada in Equustek, and of the Federal Court of Appeal in Teksavvy, provide welcome confirmation that site-blocking and de-indexing injunctions are available in Canada, in appropriate cases, and that they are often the only practical way to put a stop to online infringement. Nevertheless, it is still important that the Copyright Act be amended to add clarity and predictability to the process of requiring ISPs, hosting services, and search engines to block access to infringing content by issuing site-blocking and de-indexing injunctions.

Canada can, and should, draw on the experience of its major trading partners, including those discussed above, in crafting a balanced regime with an appropriate standard of proof for rights holders, reasonable knowledge requirements for infringing services, and appropriate safeguards to insulate intermediaries from liability for blocking access to infringing content. MPC and CMRRA believe that a clear, predictable, and fair path to site-blocking and de-indexing orders, in appropriate circumstances, is the best way to give Canadian rightsholders the tools they need to fight the ongoing problem of online piracy.

Recommendation:

ACCORD recommends amendments to the Copyright Act to authorize a court, on application by a rights holder, to grant a site-blocking or de-indexing injunction against an Internet intermediary, with worldwide effect, on a “no-fault” basis to the intermediary.

4.4.2 Clarify or strengthen other enforcement tools against online infringement

In addition to site-blocking and de-indexing injunctions, Parliament should amend section 27(2.3) of the Copyright Act to reduce the burden of proof on rights holders when attempting to establish secondary liability against an online enabler. Like in other jurisdictions, general knowledge of infringing activity should be sufficient; if a service is provided primarily for the purpose of enabling copyright infringement, or has the primary effect of doing so, it should not be necessary to establish that “an actual infringement of copyright” has occurred as a result of the use of the service.

Recommendation:

ACCORD recommends that section 27(2.3) be amended to remove the requirement to prove “an actual infringement of copyright” and that general knowledge of infringing activity should be sufficient to enforce this section.

Conclusion

ACCORD thanks the Government of Canada for seeking comments on this important topic and we look forward to the outcome of this consultation.