Notice or Norwich: Who foots the bill for identifying online infringers?

17 September 2018

The famous New Yorker cartoon goes, "On the Internet, nobody knows you're a dog." This is isn't entirely true. Your Internet Service Provider (ISP) knows you're a dog. The question in Rogers Communications Inc. v. Voltage Pictures, LLC is who has to pay to find out.

This decision, released September 14, deals with tracking down alleged copyright infringers. At its most basic level, the decision is about drawing the line between the relatively new "notice-and-notice" statutory regime (designed to curtail copyright infringement without compromising privacy), and the traditional Norwich orders used to identify suspected copyright infringers so they can be named in an infringement action.

Under the common law governing Norwich orders, the third party who is ordered to produce the documents in question is entitled to recover the reasonable costs incurred in complying with the order. Under the notice-and-notice regime, no costs are recoverable. This is where things get interesting.



The Notice-and-Notice Regime

The most recent amendments to the Copyright Act introduced measures that are designed to assist copyright holders in notifying unknown Internet users of infringement claims.[1] Briefly, the amendments, which together are known as the "notice-and-notice" regime, allow copyright owners to send notice of alleged infringement through an ISP to a suspected infringer in a way that does not reveal the identity of the recipient of the notice. The copyright owner will send a notice to the ISP that indicates the work in question and the anonymous IP address of the suspected infringer. Pursuant to the statutory regime, the ISP is then obligated to connect the IP address to a particular user and relay the copyright owner's notice to that user. The regime provides that the amount of costs recoverable for these search and relay activities may be set by regulation, but no such regulation has been promulgated.

Disclosure of the identity of the user of the ISP who is accused of copyright infringement is not part of the notice-and-notice regime, and so this disclosure must be obtained by way of Norwich order. The key question in this appeal is which of the ISP's processes in identifying, notifying, and revealing the alleged infringer fall under the statutory scheme (and are thus exempt from cost recovery) and which processes are separate obligations imposed by the Norwich order and thus fall under the common-law cost-recovery principles associated with such orders.

The Decisions Below

Voltage Pictures is the copyright owner in this case, and the ISP is Rogers Communications. Voltage was looking for the identities of a number of John Does who Voltage claims had infringed its copyright by illegally sharing films that Voltage owns the copyright in. Voltage brought a motion for a Norwich order that would compel Rogers to disclose the identity and contact information of one of the John Does.

The motions judge granted the Norwich order and allowed Rogers to recover the costs of all steps that were necessary to comply with it. The Federal Court of Appeal agreed with the motion judge, but confined Rogers' recovery to the costs of complying with the Norwich order that did not overlap with the steps that formed part of Rogers' implicit obligations under the notice-and-notice regime. Justice Stratas reasoned that most of the steps that Rogers would have to take to comply with its statutory obligations would overlap with the steps required to fulfil the Norwich order. Accordingly, since Rogers had presumably already completed much of the work required by the Norwich order in complying with its obligations under the notice-and-notice regime, only minimal additional costs were recoverable in connection with the Norwich order. Rogers appealed this decision to the Supreme Court.

The Supreme Court Decision

All of the judges of the Supreme Court agreed with the Federal Court of Appeal that the costs of complying with a Norwich order will only be recoverable so far as they don't overlap with the duties (even the implicit ones) imposed by the notice-and-notice regime, but the nine Supreme Court judges disagreed with the Federal Court Appeal about which parts of complying with the Norwich order overlapped with Rogers' statutory duties. Justice Côte differed from her eight fellow judges on where she would have drawn the line. All judges agreed, however, that the record before the motions judge was insufficient to determine the reasonable costs Rogers would incur in complying with the Norwich order in question. Accordingly, the Court sent the matter back to the motion judge to determine the quantum of Rogers' reasonable costs.

The Court accepted Rogers' evidence that complying with a Norwich order typically involved eight steps, including verifying that the IP address in question is indeed a Rogers IP address, querying a number of internal databases to narrow the IP address to a specific modem, associating the modem with a particular customer and making three separate verifications to ensure that the correct customer has been identified. The eight-step process also involves several steps aimed at increasing the accuracy of the result and creating a documentary record for audit purposes.

Justice Brown, writing for the majority, held that it was impossible to tell on the record which of Rogers' eight steps would overlap with its statutory obligations under the notice-and-notice regime. Justice Côte went further and ventured that none of the eight steps would fall under Rogers' statutory obligations.

Ultimately, both sets of Supreme Court reasons are largely academic. The precise placement of the line between notice-and-notice and Norwich will be made by the motions judge on redetermination on a more complete record.

Analysis

It may be a case of hindsight, but it is hard to see why this case was granted leave to appeal to the Supreme Court. The Court's decision is useful to affirm the decision of Stratas J.A. on the point that the notice-and-notice regime includes implicit steps that are excluded from Norwich cost recovery, but this is hardly a question of broad public importance.

That said, copyright infringement on the Internet is rampant, and it is important to have clear rules about how ISPs fit into the copyright enforcement landscape. Also, the notice-and-notice provisions are relatively new, so setting out how they are to function within the existing enforcement framework is helpful.

In the end, this appeal was highly technical. The differences between the reasons of Stratas J.A., Brown J. and Côte J. come down to how each judge understood Rogers' evidence about the technical process involved in complying with both notice-and-notice requests and Norwich orders.

In our view, Justice Côte's understanding is the most practical and useful. Justice Côte points out the difference in kind between the two types of request. Rogers receives over two million notice-and-notice requests per year. Due to this high volume, Rogers' process for handling these requests is automated. The requesting party fills in a standard form and software uses the data from the form to send an email to an address that matches the submitted IP address. No human checks whether the email address is correct. At no point does Rogers determine the name of the person associated with the email address, let alone any other identifying information. This approach makes sense given both the high volume of requests, and the low cost of error: users who receive a notification email in error can simply ignore it.

In contrast, Norwich orders demand a higher degree of accuracy. There are real privacy consequences for individuals whose personal information is disclosed pursuant to such an order. Also, the volume of Norwich order requests is orders of magnitude less than that of notice-and-notice requests. Rogers receives between 1,500 - 3,000 Norwich requests per year. Finally, Norwich orders do not follow a standard format - each one much be read and interpreted. Accordingly, Rogers' process for complying with Norwich orders is not automated. Rogers employs the eight-step process described above to ensure accurate compliance with Norwich orders.

Seen in this light, it is not difficult to understand why Justice Côte would go so far as to conclude that none of Rogers' eight steps is a necessary step in the automated notice-and-notice process.

It will be interesting to see which set of reasons the motions judge relies on when making her redetermination.

Conclusion

Unless you are a copyright owner, an ISP, or a copyright infringer (human or canine), it is unlikely that this decision will have any bearing on your everyday life. However, the copyright enforcement mechanisms it involves are a necessary outgrowth of our increasingly online existence. Parliament took steps to modernize Canada's copyright enforcement mechanisms by introducing the notice-and-notice regime, and now the Court has established a set of principles for determining who bears the costs of a key step in the copyright enforcement process. How those principles will be applied remains to be seen.


[1] primarily sections 41.25 and 41.26 of the Copyright Act


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