ISPs Entitled to Compensation for Costs of Identifying Infringing Subscribers

4 minute read
25 September 2018


The Supreme Court of Canada recently issued its decision in the case of Rogers Communications Inc. v. Voltage Pictures, LLC, 2018 SCC 38. The decision in this case sets an important precedent for Internet service providers ("ISPs") with respect to the fees they can charge for complying with court orders to disclose the identity of alleged copyright infringers.

Under the Canadian Copyright Act, copyright owners can forward a notice of alleged infringement to an ISP, who is then required to forward a notice to the alleged copyright infringer (assuming that they are a subscriber to their service). This is known as the "Notice and Notice" regime. Parliament enacted these provisions in the Copyright Act to deter online infringement while balancing the interests of rights holders, Internet users and Internet intermediaries such as ISPs.

Under the Copyright Act, ISPs are not required to disclose the identity of the alleged infringer to the copyright owner. Rather, in order for the rights holder to obtain the information required to identify (and potentially sue) the infringer, the rights holder must seek an order of the court (called a Norwich order) requiring the ISP to reveal the relevant subscriber's name and physical address.

In the Supreme Court case, an ISP (Rogers Communications) sought to obtain compensation from rights holders (Voltage Pictures, amongst others) for the costs involved in disclosing the identities of alleged infringers in compliance with a Norwich order. All the parties agreed that, under the Copyright Act, ISPs are not entitled to be compensated for forwarding notices of alleged infringement to subscribers. However, the parties disputed the steps for which ISPs can be compensated for the work required in order to carry out a Norwich order. The heart of the dispute centered on whether the express obligations under the Notice and Notice regime embedded in the Copyright Act carry with them certain implicit obligations for which ISPs can be compensated.

In its decision, the Supreme Court confirmed that the Notice and Notice provisions in the Copyright Act require that the ISP locate records that allow for the accurate determination of the person to whom the IP address used in the alleged infringement belongs - but not that the name and address of the subscriber be identified at that time. The ISP cannot charge for the costs involved in determining to whom the notice should be forwarded, though it is entitled to compensation for its reasonable costs involved in identifying the name and physical address of the owner (and in verifying the accuracy of that information) for the purpose of complying with the Norwich order. Costs for steps taken by an ISP in compliance with a Norwich order that are duplicative of steps taken by that ISP to comply with the Notice and Notice regime may not be recoverable. 

Going forward, ISPs should ensure that they can break down their costs of identifying subscribers in compliance with a Norwich order, and that these costs are not incurred in duplication of  efforts made to forward notices of alleged infringement to subscribers. Copyright owners may wish to consider the costs of such disclosure when determining the extent of alleged infringers to include in a request for a Norwich order. While the amount of compensation due to an ISP will be fact-specific and may vary from case to case, the possibility of significant costs may encourage rights holders to implement a more tactical - rather than scattershot - approach to litigation against anonymous suspected infringers.

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Gowling WLG professionals will be pleased to discuss resolutions to specific legal concerns you may have.