Internet Service Providers (ISPs) have seen an increase in litigation related to Canada’s notice-and-notice regime since it was added to the Copyright Act in 2012. Plaintiffs, generally the owners of copyright in films, have brought claims in Federal Court using various procedures. The Court recently released a decision offering guidance on the proper way to do so although there is still some uncertainty on this point.
The notice-and-notice regime set out in sections 41.25 and 41.26 of the Copyright Act, requires ISPs to forward notices of alleged infringement that they receive from copyright owners to subscribers. The ISPs also need to provide confirmation the copyright owners that the notices have been forwarded (or explaining why one could not be forwarded if that is the case), and to keep the information necessary to allow the subscribers’ identities to be determined. Failure by an ISP to comply with the notice obligations can result in statutory damages..
Plaintiffs have brought claims against several ISPs alleging that they have failed in their obligations to forward these notices for various reasons.
The most recent decision, TBV Productions, LLC v. Doe. found that the proper procedure by which a copyright owner can bring a claim for statutory damages for failure to forward a notice is to start an action. This finding, however, departs from a previous decision of the Federal Court, ME2 Productions Inc. v. Doe, which found that such a claim could proceed by way of motion.
Let’s look at TBV Productions v. Doe. first.
In this case, the plaintiff TBV Productions alleged that three ISPs had failed in their obligations to forward notices to its subscribers.
TBV Productions tried to have its claims against the various ISPs heard by way of a “show cause” motion. The claim was originally part of a Norwich motion by which TBV Productions sought the disclosure of the identities of allegedly infringing subscribers. The Norwich portion of the motion was no longer at issue by the time of this hearing.
In its decision, the Court found that, in this case, the plaintiff copyright owner would have to bring a claim for damages for failure to forward a notice against an ISP by way of an action. The plaintiff in this case cannot bring it as part of a Norwich motion and will have to bring a separate own claim for damages.
This decision is certainly helpful although there is still some ambiguity in the law given the Federal Court’s earlier decision in ME2 Productions.
In that case, the Court allowed the claim for statutory damages to proceed by way of a motion in an effort to simplify and accelerate the process. Crucially, in that case, the Court was considering an appeal of a decision of a Prothonotary that had created this process and so was reviewing that decision on the standard of palpable and overriding error. The Court concluded that the Prothonotary did not make a reviewable error in reaching their decision and so the claim was allowed to proceed by way of motion.
The Court in TBV specifically addresses the ME2 case in its decision, distinguishing it on the grounds that, in ME2, the claim for damages was tied to the ISP’s alleged failure to keep proper records and so the disclosure and statutory damages issue were intertwined. TBV differed in that the parties had settled the issue of disclosure and so the issue remaining before the Court related only to the damages claim. The Court also emphasized that the ME2 decision was an appeal of a decision of a Prothonotary and so the standard of review played a key role in that decision. Ultimately, the Court found that the circumstances in TBV were sufficiently different from those in ME2 to justify a requirement to pursue a damages claim by way of action.
So while the TBV case offers guidance, ISPs still have to face some uncertainty regarding the proper procedure to defend such a claim in addition to the claim itself. This will likely result in an initial discussion (and potentially disagreement) between the copyright owner and the plaintiff to try and determine if the claim for statutory damages should proceed by way of an “ME2 process” or a “TBV process”.
Fasken acts for several ISPs and advises them on their obligations under the notice-and-notice regime. Let us know how we can help you with notice-and-notice regime compliance and litigation.