Lifting the Cloak of Anonymity of Copyright Infringers Online

By Scott Miller and Yang Wang, May 30t^h, 2017

While internet connects people thousands of miles apart and accelerates knowledge distribution, it also creates a cloak under which anonymous users can illegally download and distribute copyright protected materials, such as movies, songs and novels. Previously, copyright owners were unable to protect and vindicate their rights unless internet service providers (ISPs) were willing to disclose the identity of suspected copyright infringers.

The recently modified copyright regime allows copyright owners to seek a disclosure order that compels an ISP to reveal the identity of the suspected copyright infringers.^[1] The purpose of which is “to allow copyright owners to protect and vindicate their rights as quickly, easily and efficiently as possible while ensuring fair treatment of all.” [2] Whether or not copyright owners should reimburse the ISPs for the cost related to a disclosure order was left undecided.

In Voltage Pictures LLC v John Doe, the Federal Court of Appeal reviewed the trial judge’s order that Voltage has to pay a fee of $100 per hour of work plus HST to Rogers, the ISP, before the disclosure of identifying information (see our previous article here). Voltage appealed this order and contested this fee as it was far too high and thus unreasonable.

The Court allowed the appeal and ordered Rogers to disclose identifying information to Voltage without seeking compensation. The concern is if ISPs are allowed to charge a fee without restriction before the release of identifying information, the purposes of the Copyright Act would be frustrated. A large service fee could effectively dissuade copyright owners from obtaining the information they need to protect and vindicate their rights.

The Court held the subsection 41.26(1) of the Copyright Act has imposed an obligation that the ISPs “must maintain records in a manner and form that allows it to identify suspected infringers, to locate the relevant records, to send the notices to the suspected infringers and the copyright owner, to translate the records (if necessary) into a manner and form that allows them both to be disclosed promptly and to be used by the copyright owners and later the court to determine the identity of the suspected infringers, and finally, to keep the record ready for prompt disclosure. ”^[3]

Furthermore, the Court divided the total cost into two categories: (1) the work necessary to assemble, verify and forward the identifying information to copyright owner pursuant to the subsection 41.26(1) of the Copyright Act; and (2) the actual, reasonable, and necessary cost of delivery or electronic transmission of the information.[4]

For the first category, the Court took a position pursuant to the “no regulation and, thus, no fee” default rule in subsection 41.26(2) of the Copyright Act for the subsection 41.26(1) obligations. It held that the decision of leaving the cost of with ISPs can push them to limit the cost of compliance with their obligation “more automatic, more efficient and less expensive.”[5] For the second category, the Court found that the cost does not fall within the subsection 41.26(1) and thus ISPs can charge this fee. However, it is usually negligible (e.g. $0.5 per IP address in 2012). ^[6]

The Court also recognized that ISPs can plead their economic case to the Minister to set up a regulation to allow ISPs charge a fee for performing the subsection 41.26(1) obligations. Until then, ISPs rather than copyright owners should bear the cost of assemble, verify and forward the identifying information pursuant to the Copyright Act and the Copyright Modernization Act.