Battle over costs of fighting online piracy might be heading to SCC

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Canada’s notice-and-notice regime could soon see its first test at the Supreme Court as Rogers Communications fights for the right to charge rights-holders for the trouble of contacting those pirating copyrighted material.

It’s a legal battle that will serve to hone Canada’s unique copyright laws, but could also determine whether notice-and-notice continues to be the easiest avenue for rights holders, or whether it will be abandoned in favour of other methods to go after pirates.

The case is between Voltage Pictures and Rogers. The former, a film production company, has fought vigorously to pursue those trafficking in their films online, seeking Rogers’s help to do so.

Rogers filed its application for leave to the Supreme Court earlier this month.

Notice-and-notice allows rights holders to send IPs known to have downloaded or uploaded the movie to their respective internet service providers (ISPs). The ISPs, in turn, are obligated by the Copyright Act to hold on to those users’ personal information for six months and to pass on a letter from the rights-holder informing the pirate of their potential liability. If, after repeated notices, the pirate continues to download the material, the rights-holder can file to obtain their information from the ISP and begin legal proceedings.

In devising that whole process, there was no consideration of costs, except to say that ISPs cannot charge fees for fulfilling the requirement to forward the infringement letters.

In the absence of rules, Rogers has been charging $100 each time they’re required to match an IP to an identity.

The Federal Court found that fee reasonable; the Federal Court of Appeal did not.

The whole case comes as Voltage attempts to launch a reverse class action against an array of users it believes pirated copyright material — the only problem is that it doesn’t know their names. It has asked Rogers for help.

Rogers has some basis to think it can charge these fees.

The telecommunications company compares the notice-and-notice obligations to a Norwich order – usually directed at an innocent third-party by the claimant of a tort – whereby the third party “comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers.”

Canadian courts have adopted that UK precedent, and have established that the third-party can claim costs associated with the request.

But it’s not yet clear that this function under the notice-and-notice regime is really a Norwich order. The Court of Appeal pointed out that such an order must be approved by a judge and that they are “by no means sure thing to get.”

Notice-and-notice, on the other hand, is “more administrative in nature, more predictable, simpler and faster, to the benefit of all involved—but most of all to copyright owners who need to protect and vindicate their rights,” the court wrote.

In its application for leave to the top court, Rogers submits that without that $100-per-request fee, “ISPs could not recover the large majority of their costs in responding to those requests.”

It continues: “While this court has been clear that the consequences of disputes between copyright owners and users should not be ‘visited on the heads of ISPs,’ the Court of Appeal’s decision does precisely that.”

This is a case where the telecommunications industry and privacy advocates are on the same page for a change.

“Your costs of engaging in trolling activity have just plummeted to the floor. This is the Federal Court of Appeal throwing the floodgates wide open.” David Fewer, director of the Canadian Internet Policy and Public Interest Clinic, told the Financial Post.

On the other hand, should Voltage be faced with the potentially astronomical cost of going after copyright pirates, it may be forced to try and make up the differential in cost through litigation against individuals.

“Whether the Supreme Court of Canada would even grant leave in this case or whether a legislative amendment is needed are questions that are no doubt being urgently considered,” wrote Howard Knopf, counsel for Macera & Jarzyna, on his blog in June.

Knopf considers the lay of the land: Without a Supreme Court judgment, the Court of Appeal’s decision — forbidding the $100 fee — stands. A regulatory change could simply require such a fee, satisfying Rogers’s concern, although that likely wouldn’t apply retroactively, putting Rogers on the hook for that potentially expansive reverse class action.

Retroactive legislation could fix that, Knopf contends. But then the issue becomes that Ottawa has just re-opened its barely closed notice-and-notice regime.

Rogers’s application for leave is certainly written with a consumer-interest lens.

“If upheld, the decision imposes costs and burdens on ISPs that are not contemplated by the legislative scheme,” the application reads. “And that will require innocent users to bear compliance costs that should be borne by infringers.”