Unlike many countries which provide an effective "notice and take down" remedy for copyright owners whose works are wrongly posted on Internet sites, Canada has implemented a "notice and notice" regime. In Voltage Pictures, LLC v John Doe, 2016 FC 881, the Federal Court interpreted some aspects of that regime in a proposed reverse class action suit brought by several parties against a John Doe defendant. The issue of a claim by the ISP for reasonable compensation for the services that the innocent third party would be obligated to provide were addressed by the Federal Court of Appeal in Voltage Pictures, LLC v John Doe, 2017 FCA 97.

The applicants are a number of organizations that claim copyrights in works alleged to be infringed by an unknown respondent and made application for a disclosure order “in accordance with” sections 41.25 and 41.26 of the Copyright Act. Section 41.25 provides the ability of a copyright owner to send a notice to the person providing connectivity to the location on the Internet from which an infringement is alleged as well as the form and content of the notice. Section 41.26 requires the person receiving the notice to forward the notice to the person to whom the Internet address belongs as well as requiring the retention of records that will allow the identity of the person to whom the Internet address belongs to be determined. Fees can be charged for forwarding the notice but to date no regulations have been issued in that respect.

The applicants were seeking a Norwich disclosure order1 recognized by the Federal Court of Appeal in BMG Canada Inc. v Doe, 2005 FCA 193. Such an order would require a non-party (the ISP) to disclose the identity of an account holder. Obtaining such an order requires satisfying the following principles:

  1. The applicant for a Norwich order must have a bona fide case;
  2. The party against whom such an order is to be issued must have information on an issue in the proceeding;
  3. An order of the Court is the only reasonable means by which the information can be obtained;
  4. Fairness dictates that the information be provided prior to discovery or trial or, in the circumstances of this case, prior to certification of the proposed class proceeding; and
  5. Any order made will not cause undue delay, inconvenience, or expense to the party against whom such an order is to be issued or others.

The applicants argued that the above provisions that set up the "notice and notice" regime should deny compensation to the third party (the ISP, Rogers, in the present case) for the costs involved in complying with such a request.

The Federal Court did find sufficient evidence to show a bona fide claim that unknown persons are infringing the copyright in their films and the other elements of the BMG principles were shown.

As in past cases of this kind the Federal Court exercised caution on the disclosure of the subscriber information so that privacy rights are minimally impaired. In particular the Court relied on guidance from the earlier case of Voltage Pictures LLC v. John Doe and Jane Doe, 2014 FC 161 (Voltage 2014) where the Voltage 2014 Court expressed concerns about the risk of copyright troll behaviour.

Weighing these factors in the 2016 case, the Federal Court ordered Rogers to disclose only the Subscriber’s name and address as recorded in Rogers’ records. The Court also required that this information be remain confidential and not be disclosed to other parties without further Court order. The use of the information was restricted by the Court to use in the proposed class proceeding. Finally the court also prohibited the applicants from disclosing to the media any statement in respect of the information obtained from Rogers. This aspect of the order of the Federal Court was not raised in the appeal.

In the circumstances of the 2016 case the Federal Court found Rogers was entitled to a reasonable fee, in the amount of $100 per hour for its work plus tax, as well as costs in the motion. The appeal challenged this fee.

The Federal Court of Appeal reviewed the purposes of Sections 41.25, 41.26 and 41.27 of the Copyright Act and held that the "legislative regime is designed to reduce the complications and answer many of the questions that can arise when a Norwich order is sought. In this way, it makes the process 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" finding that the overall aim "is to ensure that in the age of the Internet, the balance between legitimate access to works and a just reward for creators is maintained".

Assessing the above provisions of the Copyright Act the Court of Appeal noted that they impose certain obligations on the ISP namely that they "must maintain records in a manner and form that allows it to identify suspected infringers, to locate the relevant records, to identify the suspected infringers, to verify the identification work it has done (if necessary), 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 copyright owners and later the courts to determine the identity of the suspected infringers, and, finally, to keep the records ready for prompt disclosure".

These obligations arise only on the payment to the ISP of a "lawfully charged" fee. The Appeal Court noted that the Minister can, by regulation, set a maximum fee that an ISP can charge for these obligations but in the absence of such a regulation there is no such fee. No such regulation had been issued. The Appeal Court noted that the statutory scheme was "a legislative choice that, at least for the time being, prioritizes considerations of access to identifying information to allow copyright owners the ability to protect and vindicate their rights over the economic interests of Internet service providers".

The Appeal Court noted that the amendments to the Copyright Act do not displace that Norwich process which continues to govern disclosure by third parties.

The Appeal Court noted that an ISP can charge a fee for the actual, reasonable and necessary costs associated with the act of disclosure which is not caught by the Section 41.26(1) regime but expected these to be nominal charges as the bulk of the work of an ISP would consist of the uncompensated duties of the ISP under the new regime.

In this case the Appeal Court deleted the award of Rogers' costs from the previous Federal Court order and also awarded court costs to the appellants. The appeal Court noted that if the ISP was burdened by the costs it was obligated by the legislative scheme to carry then it could seek to invest in technological solutions to reduce its costs or ask the Minister to pass the regulation setting a maximum fee contemplated by the regulatory regime.