Canada's New Unauthorized Downloading Rules: A Q&A With Michael Geist

01/08/2015 11:14 EST | Updated 01/08/2015 11:59 EST

Canada’s latest anti-piracy legislation has some downloading fans questioning whether it’s time to swear off their favourite torrent sites — or whether the warning system creates a legal watchdog who can bark but not bite.

The Copyright Modernization Act, which took effect Jan.1, requires Internet service providers to send notifications to downloaders whose IP addresses have been identified by copyright holders for perceived violations. The legislation limits the amount a non-commercial downloader can be sued for to $5,000 per case, while damages for commercial infringements can be charged up to $20,000.

But many of us are still scratching our heads about what the new legislation means for the average user and whether anything will change. So we had a chat with Canada’s e-law expert Michael Geist, Canada Research Chair in Internet and E-Commerce Law at the University of Ottawa, to find out.

Can you explain to our readers what exactly changed on Jan. 1, and why?

Geist: Honestly, not much changed. For the better part of 10 years we’ve had, on an informal basis, a “notice and notice” system, where rights holders detect what they think is infringement. They can send a notification to the Internet provider. They don’t know who the subscriber is, but they do know that the allegation took place at a particular ISP and the ISP would forward that notification on to the subscriber. The ISP doesn’t provide the personal information of the subscriber, there’s no confirmation or court case that this was, in fact, infringement. There have been hundreds of thousands of these notices sent out.

But what did change at the beginning of the year was that this is now formally part of the law, such that if an Internet provider wants to qualify for legal safe harbour — so it’s not liable for actions of its customers — it’s now obligated to forward along that notification.

How exactly would the warning system work? What would a user see?

The user would see an email with a notification that has to include certain information: the copyrighted work, the IP address that was used, the time the alleged infringement occurred. And it’s simply a notification that the ISP forwards along to the subscriber.

Are these just meaningless notices that tell you they know you’re doing something you already knew you were doing, or will they have any real teeth?

To answer the question of whether or not they’re meaningless, I don’t think they are. This has been in place for about ten years and the evidence to date suggests that they work fairly effectively. It is more of an education system as opposed to an attempt to try to sue people or start a legal process. But the evidence that the House of Commons committee that studied this provision, along with the other copyright reform provisions, found was that when subscribers received these notifications the number of subscribers that received second notifications dropped dramatically and then a third notification dropped even more, such that it was a tiny percentage of subscribers — in this case it was at Rogers — that received anything more than notifications.

There’s been other evidence from other rights holders groups that have similar kinds of findings that suggest that the notifications, which are essentially designed to alert people to the fact there’s been an allegation of an infringement, work fairly effectively. I think what we’ve seen over the last decade or so is that suing people as a mechanism to stop downloading doesn’t work and so what is really needed is better education, which this does, and legal alternatives, which we’ve started to see in the marketplace.

What should a downloader do if they get one of these notices? Should they care?

Well, they need to consider what they’re doing online, consider whether it’s a true allegation or not and act accordingly.

Are their names kept “on file” somewhere?

The ISPs are required to keep the information for six months after they send the notification, so that gives the rights holder the ability to decide whether they want to pursue the next step and go to court. We haven’t really seen very many file-sharing lawsuits in Canada. They’re expensive, they don’t work. Now, in Canada we’ve got a cap of $5,000 for all infringements, which isn’t insignificant, $5,000 is a lot of money. But it’s no longer the case where the kinds of threats we’ve seen in the United States where the threats range into the hundreds of thousands or millions of dollars of liability, we simply won’t have that in Canada.

What are the chances of legal action against an individual? With a $5,000 cap, is legal action worth it for the company given that they’ll also be paying to pursue litigation?

I think we’ve seen two groups emerge here. We’ve seen on the one hand, for most of the major rights holders that previously were suing individual file-shares, they’ve largely given up on that strategy. They initially had hoped that would be a strategy that would curtail downloading. In fact, downloading is down but it’s because there are more alternatives out there, particularly legal ones, but sometimes also streaming ones too.

So this issue, it’s still a live issue, but it’s nowhere near the kind of issue that it was a number of years ago. So the rights holder groups that adopted individual file-sharing lawsuits as a mechanism to stop people from doing this have largely given up on that. That said, there are some organizations out there that have seemed to try to develop a business model around these notices, they have no expectation of going to court, it would be too expensive to actually litigate these cases but they hope, in a sense to scare someone into settling.

Aside from their new legal obligation to send notices along to subscribers is there any incentive for ISPs to crack down on unauthorized downloading?

From an ISP perspective, their typical concern is their own liability. The fact that their ability to ensure that they are not liable is dependent on forwarding along these notifications means that most will do that. There are some real costs involved for them and while the law does provide the government with the ability for ISPs to charge a fee for sending those notifications, the government has chosen not to establish a fee. So, the law says they can do it.

But they’ve chosen not to and I think from an ISP perspective that’s problematic because there are real costs involved and those are costs that are borne by the ISP, or at the end of the day, by consumers. And I suspect that if the experience is that ISPs are overwhelmed with these notices — if the number of notices increases dramatically, they will become really vocal about the need for some form of compensation given the costs involved.

So, consumers could see some of these costs passed along on their bills?

Not directly, but indirectly as ISPs’ costs increase. ... It’s always possible that we’d see some of those costs passed along in the form of higher charges.

Many ISPs are also cable companies and content creators. Rogers, for example, has introduced the streaming site Shomi. It seems they have even more skin in the game of preventing illegal downloading.

I think what they’re trying to do, and they’re together with the rights holders on this, is offer up better and better alternatives that will maybe entice people to either subscribe or use those materials to access their content. And I think we’ve seen that that strategy really does work. It provides revenue streams for rights holders and it makes these (unauthorized) alternatives far less attractive.

So you expect the number of notices issued to go up significantly?


How does the strength of the new Canadian law compare to the approach taken in other countries?

The approach is somewhat different. In other countries there’s often been a takedown system. This notice system originated in Canada and we’ve seen some other countries begin to explore or begin to use it. Canada’s really shown itself as quite committed to it as part of international trade negotiations it’s involved with. … The belief is that it’s effective and strikes a far better balance between the interests of all three parties, the rights holders, the ISPs and individual users as well.

Are there any catches, or loopholes that consumers should be aware of?

I think the big concern at the moment is that there are some rights holders who may try to use the notification as a way to pressure or convince someone into settling based merely on an allegation when they don’t even know who this person is. So if they use these notifications to try and do more, to also say we will not sue you, provided you pay us X amount of money, that’s the sort of thing where they’re trying to use this system in a way that I don’t think was envisioned.

I think there’s concern that they’ll try and insert in their notices demands for payment even though the reality is they don’t know who the subscriber is and they’re a long way off from being in any position to demand any sort of money. ... The reality is it’s an unproven allegation against an anonymous internet user.

So, the wording of the notice is up to the individual copyright holders?

Well, that’s another thing. The government could have been more specific, but they chose not to be. The act does specify what must be in there but it doesn’t create limitations on what else might be in there. The other question is whether the ISPs will try to ensure that their customers are fully aware of the implications of the notices, so they also notify that they haven’t disclosed your subscriber information, that this is not a lawsuit this is merely a notification.

Could this legislation be the start of more power for copyright holders and a wider-spread crackdown on consumers?

No, I don’t think so. We underwent major reforms a couple years ago, and there were a couple things that were really good for the public and consumers and there were some that were not as good. But there was quite a lot of pro-consumer material in the law and frankly, this notice and notice system is seen as one that’s pretty beneficial for consumers. Their private information isn’t disclosed. There’s no lawsuit, there’s no content being taken down, it’s a notification.

So, this is actually seen as a pretty good system from an individual consumer perspective. What the government really wants to do in the law is target those who are responsible for the facilitation of widespread commercial piracy and it provided some tools to do that. I think the government sent a clear signal both with this rule, as well as the cap on individual non-commercial infringement, that it doesn’t think that going after individuals is really the way to go. The way to go is both to create viable legal alternatives and to go after those who are really profiting from infringing activities.

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