TCS Daily

Now It Really is Canada's Fault

By Jay Currie - April 2, 2004 12:00 AM

The Canadian Recording Industry Association (CIRA), following the lead of the RIAA, went to Federal Court to sue 29 Canadian music file sharers. To do that it needed to connect their P2P pseudonyms to IP addresses and subscribers' names and so it asked the Federal Court to order the file sharers' ISPs to provide the names associated with the IP addresses.

On March 31, 2004, Mr. Justice Konrad von Finckenstein of the Federal Court of Canada rejected CRIA's application.

Justice von Finckenstein ruled the ISPs did not have to disclose the P2P service users' names to CRIA. In his judgment, available here in PDF, von Finckenstein listed a number of issues that stood in the way of granting the order to disclose.

The CRIA application had a lot of problems: it ignored the fact ISPs use dynamic IP addresses which might make it impossible to determine exactly which user was using the file sharing service; a key affidavit of evidence which had been collected by MediaSentry Inc. was incorrect as to form (it was largely hearsay), and, critically, there was no evidence of how the file sharing service pseudonym was linked to a particular IP address. Each, in itself, might have been enough to defeat CRIA's application.

Justice von Finckenstein was also deeply concerned that forcing the ISPs to disclose their clients' details was a violation of those clients' legally protected privacy which he was not prepared to order lightly. He indicated that to even be considered an application would have to establish a prima facie case against the subscriber and show the public interest favored disclosure over the subscriber's privacy concerns.

But Justice von Finckenstein did not stop at these procedural details: he went on to consider and rule on the substance of whether downloading and putting music files into a shared folder was, in fact, a violation of Canadian copyright law.

As I wrote for TCS in Blame Canada in September 2003, under Canadian copyright law there is a right to copy for private use. At the time there was a good deal of disagreement about how this right to copy for private use intersected with P2P file sharing.

Until Judge von Finckenstein delivered his judgment, lawyers in Canada were pretty certain downloading music was legal; but there was a great deal of debate (the flavour of which is captured here) as to whether placing a song into a shared folder -- "uploading" it in some people's view -- was covered by the private use exemption. In Blame Canada II I backed away a bit from my earlier claim that both downloading and uploading were certainly legal. According to Justice von Finckenstein's decision, I shouldn't have.

"No evidence was presented that the alleged infringers either distributed or authorized the reproduction of sound recordings. They merely placed personal copies into their shared directories which were accessible by other computer users via a P2P service." wrote the judge.

The Federal Court decision was foreshadowed by an early March decision of the Canadian Supreme Court in CCH Canada Ltd. v. The Law Society of Upper Canada, which von Finckenstein cited when he considered whether placing a song in a shared folder linked to a P2P service constituted authorization to copy. The Supreme Court had set a high standard for "authorize." ""Authorize" means to "sanction, approve and countenance." Countenance in the context of authorizing copyright infringement must be understood in its strongest dictionary meaning, namely, "give approval to, sanction, permit, favour, encourage." Based on this strong direction from the Supreme Court, von Finckenstein concluded "The preconditions to copying and infringement are set up but the element of authorization is missing."

Finckenstein was similarly unimpressed with the argument that placing a song in a shared folder is "distribution" for the purposes of the Canadian Copyright Act. "Before it constitutes distribution there must be a positive act by the owner of the shared directory, such as sending out copies or advertising that they are available for copying."

While CRIA has announced it will appeal, Judge von Finckenstein's ruling has greatly clarified the position of Canadian music file sharers. "In order to maintain the proper balance between the rights of a copyright owner and users' interests, it must not be interpreted restrictively....User rights are not just loopholes. Both owner rights and user rights should therefore be given the fair and balanced reading that befits remedial legislation." wrote Chief Justice of Canada, Beverly McLachlin in CCH.

At this point it is a good bet the Supreme Court of Canada would be likely to uphold von Finckenstein's decision which would leave CRIA with less than nothing. Prior to bringing its action, CRIA at least had what I described in Blame Canada II the ambiguity in the Copyright Act with respect to file sharing. Now it doesn't.

The implications for America's RIAA's ongoing attempt to end file sharing are serious. The ruling means that Canadians can, and will, turn on their file sharing without fear of civil action. As I wrote in Blame Canada I, "If the RIAA were to somehow succeed in shutting down every "supernode" in America all this would do is transfer the traffic to the millions of file sharers in Canada. And, as 50% of Canadians on the net have broadband (as compared to 20% of Americans) Canadian file sharers are likely to be able to meet the demand."

Justice von Finckenstein's decision also illustrates a fundamental difference between the way America and Canada look at intellectual property. Under the Digital Millennium Copyright Act there is not much by way of users' rights. There is a bow in the direction of fair use, but that is about it.

The Canadian situation is very different. With the levy that is charged on blank CD's at the music industry's request the idea of a private right to copy was entrenched in the Copyright Act. This meant, that at least in the case of music, owners and users each had rights. With his decision, Justice von Finckenstein has clarified those user rights within the spirit of Chief Justice McLachlin's requirement that owners' and users' rights be balanced.

With a Spring election coming up, it is unlikely the Canadian government will change the Copyright Act anytime soon. (Although there is already some discussion of ratifying the provisions of the World Intellectual Property Organization treaties which prohibit anyone but copyright holder or licensee from making copies available.) But I suspect P2P services will begin putting wee Canadian flags up beside IP addresses originating in Canada in next to no time.

The fact there will be a "Canada Hole" in any attempt to shut down music file sharing in the United States might force the RIAA to rethink its present litigation strategy. It might also prompt a re-examination of the idea of some sort of levy designed to compensate creators for copies made of their work.

Critically, the fact that such a different set of assumptions is governing copyright in Canada should put entertainment companies on notice that the net really does make it a "small world after all." If a single country breaks ranks on how digitial entertainment is to be dealt with, this has instant consequences for the entertainment business. Either way, an experiment is about to begin in Canada whether the record companies participate or not.

Jay Currie is a Galiano writer whose writing can be found here.


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