ARCHIVED — Bell Canada et al.

COPYRIGHT REFORM PROCESS

SUBMISSIONS RECEIVED REGARDING THE CONSULTATION PAPERS

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Documents received have been posted in the official language in which they were submitted. All are posted as received by the departments, however all address information has been removed.

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Submission from Aliant Inc., Bell Canada, Bell ExpressVu LP, Bell Globemedia Inc., Bell Mobility Inc., Northwestel Inc., Télébec ltée and Telesat Canada received on September 17, 2001 via e-mail

Subject: Responses to the Copyright Consultation Papers

Version PDF - Letter
Version PDF - Submission on the document of digital issues
Version PDF - Submission on the document on retransmission

15 September 2001

Comments - Government of Canada Copyright Reform
c/o Intellectual Property Policy Directorate
Industry Canada
235 Queen Street
5th Floor West
Ottawa, Ontario
K1A 0H5

The following companies - Aliant Inc., Bell Canada, Bell ExpressVu LP, Bell Globemedia Inc., Bell Mobility Inc., Northwestel Inc., Télébec ltée and Telesat Canada - are pleased to provide comments in response to the two consultation papers issued jointly by Industry Canada and the Department of Canadian Heritage on 22 June 2001: Consultation Paper on the Application of the Copyright Act's Compulsory Retransmission Licence to the Internet, and Consultation Paper on Digital Copyright Issues.

We commend the Government for moving expeditiously in recognition of the importance of contemporary copyright issues to the country’s cultural sector, and in advancing public debate on a broad front. Our submissions look to make a positive contribution to the resolution of these issues on a timely basis such that Canada is well-positioned to respond to the copyright challenges of this new, digital context.

The Companies agree that these submissions will be publicly available via the Departments’ Web sites.

Sincerely,

Sheridan Scott Chief Regulatory Officer Bell Canada

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I. INTRODUCTION........................................................................................... 1
1. Benefits and Challenges of the Networked Environment ................................................................1
2. Maintaining A Balance.......................................................................................... 2
3. Moving to Globalized Standards for Copyright Protection.......................................................................................... 2
4. A Canadian Approach that Promotes Canadian Public Policy Objectives......................................................... 3

II. INDIVIDUAL PROPOSALS.......................................................................................... 4

1. Making Available.......................................................................................... 4
a) The WIPO Internet Treaties.......................................................................................... 4
i) Music authors.......................................................................................... 4
ii) Performers and sound recording makers.......................................................................................... 5
b) How Would A “Making Available” Right Work in Practice?.......................................................................................... 5
i) Streaming content.......................................................................................... 5
ii) Downloadable content.......................................................................................... 6

2. Legal Protection of Technological Measures and Rights Management Information.......................................................................................... 6
a) Benefits and Challenges of Technological Measures and .......................................................................................... 6
Rights Management Information
b) Protection of Technological Measures.......................................................................................... 7
c) Protection of Rights Management Information.......................................................................................... 9
i) Knowledge requirement.......................................................................................... 9
ii) Information to be protected.......................................................................................... 9
iii) Secondary infringement.......................................................................................... 10
d) Exceptions to the Protection of Technological Measures and................................................ 10
Rights Management Information
e) Civil and Criminal Remedies.......................................................................................... 10
f) Privacy Considerations.......................................................................................... 11

3. Liability of Internet Service Providers in Relation to Copyright..................................12
a) Introduction.......................................................................................... 12
b) Other Jurisdictions.......................................................................................... 13
i) The U.S. Digital Millennium Copyright Act.......................................................................................... 13
ii) The EU Copyright and Electronic Commerce Directives 14
iii) Japan.......................................................................................... 15
iv) Australia ..........................................................................................16
c) The Current Canadian ISP Industry and Bell Sympatico Approach.......................................................................................... 17
d) Adopting A Canadian Approach to ISP Liability ..........................................................................................18
i) “Exemption” from liability for transmission-related activities.......................................................................................... 18
ii) “Exemption” from liability for transient copying or temporary reproductions.............19
iii) “Limitation” of liability for hosting-related activities........................................................20

III. CONCLUSION.......................................................................................... 24



I. INTRODUCTION

1. Pursuant to the call for comments in the Consultation Paper on Digital Copyright Issues, jointly issued on 22 June 2001 by Industry Canada and the Department of Canadian Heritage ("the Departments"), Bell Canada (including Bell Sympatico Internet service provider) and Bell Globemedia Inc. (including CTV Inc. and Sympatico-Lycos Inc.) submit the following comments on behalf of and with the concurrence of the following companies: Aliant Inc., Bell ExpressVu LP, Bell Mobility Inc., Northwestel Inc., Télébec ltée. and Telesat Canada (collectively, "the Companies").

2. The Companies congratulate the Departments for releasing their framework for copyright reform, and for initiating a consultation process on key copyright issues affecting the future of electronic commerce in Canada. The Companies appreciate the opportunity to participate in this process and in all future consultations and developments deriving from it.

3. To varying degrees, the Companies are involved in most aspects of the new information economy, ranging from wireline and wireless common carriers to Internet service providers ("ISPs"), from portal and content providers to creators and consumers of copyright works. It is from this varied and complex view that the Companies submit the following comments. It is important to note that, throughout this document, the Companies use the term "Internet service provider", or "ISP", to mean those persons engaged in activities which may range from the simple provision of Internet access to the hosting of Web site content, or any combination thereof.

1. Benefits and Challenges of the Networked Environment
4. The introduction of digital technologies is resulting in enormous changes in the way Canadians function at work, at home and at school. New opportunities are constantly emerging from the increase in bandwidth and transmission speeds, and the introduction of sophisticated compression technologies. The Internet provides the public with a new means of electronically distributing a wide range of material, and is particularly well-suited to the distribution of many forms of intellectual property. Just as the on-line environment provides new sources of revenues and access to new technology for content creators and owners, it will also enable new business models for the distribution of copyright works and the collection of compensation for the use of those works.

5. At the same time, digital technology and the growth of computer networks, including the Internet, pose many challenges to the protection and enforcement of copyright. The introduction of technological measures in response to these challenges has also raised important issues in relation to ensuring that users of copyright material are able to obtain reasonable access to it in the on-line environment.

6. For the most part, the challenges brought on by the new digital economy are not really challenges to core Canadian copyright principles, but rather to existing business and distribution models. There is no need, therefore, for new copyright concepts. Rather, the current Copyright Act should be adapted and supplemented to respond adequately to the realities of these changing business and distribution models in the on-line environment.




2. Maintaining A Balance
7. By its very nature, copyright legislation is almost always controversial, given that the purpose of copyright law in Canada and around the world is to balance the diverse and competing interests of creators and consumers of copyright materials. On one hand, copyright law ensures that creators have control over their works and are fairly compensated for their use, thereby encouraging the creation and dissemination of new creative works to the public. On the other hand, it ensures that users have reasonable access (in terms of availability and cost) to those works.

8. The Companies support the rights of creators and owners of copyright materials to protect their works and to be adequately compensated for their use in all media, including the Internet. However, while this right to compensation is crucial, the level of compensation and the systems developed to ensure it must not unduly affect the development of the Internet that serves both users and content providers.

9. In this digital environment, the task for the Departments will be twofold: i) to maintain an appropriate balance between the rights of creators to benefit from the use of their works and the needs of users to access and use those works on reasonable terms; and ii) to ensure that ISPs are not liable for the infringing activity of third parties that use their facilities and services, thereby creating certainty for ISPs, all of which will stimulate the growth of electronic commerce in Canada.


3. Moving to Globalized Standards for Copyright Protection
10. Given the global reach and characteristics of new technologies in general, and the Internet in particular, international harmonization of intellectual property rights regimes is necessary. International harmonization will play an important part in ensuring that comparable levels of protection are provided around the world and that domestic copyright owners continue to receive protection in foreign countries. It will also facilitate the free movement of goods and services.

11. The issue of how to reform copyright legislation in light of the many developments in new technologies has been the subject of close consideration by governments, copyright owners and users of copyright around the world over the last decade. The Copyright Treaty ("WCT") and the Performances and Phonograms Treaty ("WPPT"), negotiated under the aegis of the World Intellectual Property Organization ("WIPO"), are important steps towards achieving this goal of international harmonization. These WIPO Treaties represent international consensus on the extent of new rights that should be implemented to ensure that international standards concerning copyright and related rights take account of digital technology and the on-line environment, leaving it to individual countries to determine the extent to which additional measures may be required. Canada's adherence to these Treaties is also important in order to ensure that Canadian copyright owners are extended similar levels of p rotection abroad.




4. A Canadian Approach that Promotes Canadian Public Policy Objectives
12. The challenge for the Departments is to develop copyright policies that are consistent with and promote international standards of copyright protection while continuing to promote Canadian priorities, choices and values. In the Companies' view, subject to the comments that follow, the Departments have generally suggested approaches that contribute to a copyright framework that promotes Canadian public policy objectives.

13. In addressing the issues resulting from the digital environment, Canada's Copyright Act must remain technology-neutral. Its provisions must ensure that technological developments do not detract from the rights of copyright owners or from the well-established public policy of ensuring that users have reasonable access to protected works.

14. A competitive Internet industry in Canada benefits both rights holders and users by ensuring a low cost platform for storing and transmitting content, and is consistent with the Canadian Government's objective in relation to the dissemination of content for and by Canadians. The ability of ISPs to provide on a competitive basis the facilities and services necessary for the wide range of content will, in part, depend on how liability rules for all content, including copyright protected content, affect the cost of their business. In this regard, Canada should avoid introducing administratively cumbersome or complex rules that will put Canadian ISPs at a competitive disadvantage when compared with ISPs in other jurisdictions.



II. INDIVIDUAL PROPOSALS

15. The Companies have limited their comments to the four digital copyright issues identified by the Departments in the Consultation Paper for consideration at this time, each of which will be addressed individually below.

1. Making Available
16. Making works available in an interactive, on-demand fashion is an important development for rights holders, for users and for electronic commerce generally. It provides an additional or alternative distribution channel for copyright owners and distributors to publish or issue copies of their works to the public, resulting in wider dissemination of those works. This added convenience for users can increase the value of those copyright works.

17. This development, however, also represents a threat to the interests of copyright creators and owners. The problem for copyright owners relates to a third party's making available on-line a legitimate copy of a copyright work without the copyright owner's permission. For example, a user could purchase a legitimate digital copy of a work (such as a software program or sound recording) either on a disk or on-line, and could then make this legitimate copy available to other Internet users. By doing so, a user would be making a copy available for others to reproduce without the authorization of the copyright owner. This would lead to numerous pirated digital copies being distributed without the copyright owner's permission, affecting the owner's ability to exploit the work in question.

18. Therefore, a key issue is whether the current Copyright Act adequately allows copyright owners to control the making available of their works in the digital environment. If it does not, there may be a need for the Act to be amended to provide copyright owners with such a right.

a) The WIPO Treaties
19. The WCT provides a new exclusive right to authors to authorize the making available of works to the public as part of the "right of communication". The WPPT provides an equivalent right to performers and sound recording makers, but labels it the "right of making available". In both Treaties, the new right is intended to cover only interactive, on-demand systems like the Internet. They give authors, performers and sound recording makers the exclusive right to make their works available to the public "in such a way that members of the public may access those works from a place and at a time individually chosen by them" .

20. In the Companies' view, in determining the extent to which a new, exclusive making available right should be granted, a distinction needs to be drawn between i) streaming content on-line that is not downloadable, and ii) content that is made available on-line for download.

i) Music authors
21. The existing exclusive right of communication found in the Act for music authors is sufficiently broad to include a making available right for content that is either streamed on-line or made available for download such that no amendment to the Copyright Act is needed in order to meet the obligations of the WCT. This is consistent with the effect of the Copyright Board's finding in its SOCAN Tariff 22 decision, wherein it stated that "[b]y making a work available, a person authorizes its communication".

ii) Performers and sound recording makers
22. The same, however, cannot be said for music performers and music sound recording makers. Their right to communicate to the public by telecommunication is limited to a right of remuneration and is not an exclusive right. In order to meet obligations in this respect under the WPPT, an amendment to the Copyright Act is required. However, the WPPT does not state in what form such an "exclusive" right must be provided for in legislation, nor does it appear to distinguish between streaming content and content that is downloadable.

23. For streamed content on-line, the new right should not cover streaming activities. Performers and sound recording makers should be limited to their existing right of remuneration. This approach reflects Canada's current copyright policy of wanting to make music repertoires readily accessible in exchange for the payment of royalties, in recognition of the impossibility of having to otherwise negotiate rights individually.

24. However, for content that is downloadable in the Internet environment, performers and sound recording makers argue that their ability to assert their reproduction right in a work is considerably diminished once the work is made available on-line for download, given the ease with which perfect digital copies can be made. In the on-line environment, they argue that their reproduction right fails to provide a measure of control which would be comparable to a distinct and exclusive "making available" right.

25. The Companies appreciate the reluctance to grant to neighbouring rights holders greater rights than those granted to underlying rights holders. However, in order to address the particular problem associated with content made available for download, performers and sound recording makers should be granted a separate exclusive right of making available limited to on-line content made available for download, expressed in a technology-neutral manner. Such a right would grant to these rights holders the ability to determine when their works are, in fact, made available for download on-line. This would enhance their ability to control the unauthorized exploitation of their works in the on-line environment where other rights have arguably proven to be inadequate.

26. In the Companies' view, the introduction of a limited and separate exclusive right of making available for performers and sound recording makers for content made available on-line for download would not unduly alter the balance of interests among the various rights holders in the on-line environment, or as between rights holders and users. In order to maintain that balance, however, it would be appropriate that existing limitations and exceptions generally be extended to apply to any such new right.

b) How Would A "Making Available" Right Work in Practice?

(i) Streaming content
27. In practice, with respect to streaming content on-line, whether on-demand or not, music authors would be covered by their existing exclusive right of communication evidenced by proposed SOCAN Tariff 22, and performers and sound recording makers would receive equitable remuneration through their proposed NRCC Tariff 22.

(ii) Downloadable content
28. With respect to on-line content made available for download, as noted above, music authors would be covered by their existing exclusive right of communication. The proposed SOCAN Tariff 22 blanket licence would therefore also cover content made available for download, the royalties for which would be a matter to be determined in the course of proceedings before the Copyright Board.

29. If performers and sound recording makers get a new, limited exclusive right of making available, as the Companies propose for content made available on-line for download, they would have the option of either filing a new proposed blanket licence tariff or resorting to direct licensing agreements. In practice, however, given the substantially increased risk of infringement associated with downloadable copies, as opposed to on-line streamed content, performers and sound recording makers would likely not propose a separate making available tariff, opting instead to control those types of uses through direct licensing agreements.


2. Legal Protection of Technological Measures and Rights Management Information

a) Benefits and Challenges of Technological Measures and Rights Management Information
30. It is generally agreed by all stakeholders that, without the ability to protect intellectual property rights and manage the distribution of copyright works over the Internet and other global methods of distribution, rights holders may hesitate to make copyright works available. As a consequence, consumers will enjoy less choice and variety, and will not have access to legitimate works. The development and effective deployment of technological measures and rights management information will increasingly enable rights holders to establish direct relationships with their customers, allowing them to manage the legal use and copying of their copyright works.

31. In this regard, the Companies fully support the development of widely agreed industry-developed standard technological measures. The U.S. Digital Millennium Copyright Act of 1998 ("DMCA") defines "standard technical measures" as measures that copyright owners use to identify or protect copyrighted works, that have been developed pursuant to a broad consensus of copyright owners and ISPs in an open, fair and voluntary multi-industry process, that are available to anyone on reasonable non-discriminatory terms, and that do not impose substantial costs or burdens on ISPs. The European Union ("EU") also supports compatibility and interoperability of the different systems and encourages the development of global systems.

32. Even though the advances in digital technology have greatly increased the viability of technological protection measures and electronic rights management information systems as a means of protecting and identifying electronic copies of works, they still share a common limitation: vulnerability to circumvention by hackers and dedicated pirates. It is the downstream effects of this activity, in particular the distribution of, and development of a market for, means of circumventing or removing technological protection measures and electronic rights management information, that are the main concerns of copyright owners.

33. However, technological measures that can be used to protect the rights of copyright owners also have the potential to distort the balance between the interests of owners and those of users as reflected in copyright legislation.

34. The Companies recognize that, if intellectual property is to become an important component of electronic commerce, intellectual property owners must be assured that measures taken by them to secure and identify their works cannot be obviated with legal impunity.

35. The most effective protection of digitally delivered intellectual property will rely on the use of technological protection measures and rights management information, backed by legal safeguards. The Companies, therefore, fully support an amendment to the Copyright Act that provides rights holders with protection against the circumvention of technological measures and rights management information used by them to secure and identify their works. Ensuring such protection will benefit users as well as creators and copyright owners.

b) Protection of Technological Measures
36. The Departments note that there is a continuum for the protection of technological measures. There are essentially three approaches to consider in this regard, including of course the numerous variations in their actual implementation, as evidenced in the approaches adopted in other jurisdictions:

i) prohibit only the manufacture of devices or services that permit the circumvention of technological measures;
ii) prohibit only the act of circumventing technological measures; or
iii) prohibit both the manufacture of devices and services as well as the act of circumventing.

37. The Companies agree with the Departments that the range of provisions adopted around the world clearly reflects the broad latitude that the drafters of the WIPO Treaties have given contracting parties to determine how they choose to implement these obligations.

38. In the Companies' view, any amendment to the Copyright Act should focus first and foremost on the party effecting the infringing activity and not on the hardware or software used, its manufacturer, developer or distributor. The provision of a service or the manufacture, importation or distribution of a device does not result in the removal or circumvention of protective measures employed to secure works against unauthorized use. It is the use of such a service or device by a person that results in the removal or circumvention of such protective measures. The most manageable approach, therefore, is to enact legislation that targets such infringing conduct.

39. A person must also have knowledge, or have reasonable grounds to know, that he or she is engaging in the circumvention of technological protection measures such that the infringing act must be for the "purpose" of circumventing a technological measure. This approach properly places responsibility for an infringing activity on the person carrying it out. In the Internet environment of constant change, this approach provides the players involved with a degree of certainty in respect of copyright law, allowing them to know their respective roles and the extent of their respective liabilities. The Companies do recognize, however, that targeting only those who actually "use" devices or technology for the purpose of circumventing technological measures may be viewed as insufficient.

40. Some believe that, as a backup, it is necessary to make it an infringing act to manufacture, import or distribute devices to circumvent protection, or to provide a service to by-pass protective devices or measures. For example, the U.S. DMCA makes it illegal to distribute any technology that "is primarily designed or produced for the purpose of circumventing a technological measure". For certain "commercial" activities, the law establishes fines of up to $500,000 and a prison term of five years. However, many have criticized the sweeping nature of these provisions and what appears to be their potential to exceed the scope of U.S. copyright law itself.

41. Those expressing such views hold that legislation that mandates an equipment-based approach to the protection of technological measures and rights management information could be seriously
counter-productive to the success of the hardware and software industries, and security in the on-line environment more generally. They argue that, since devices that could be used to circumvent protective measures may also have legitimate uses, such as "fair dealing" in research initiatives, any attempt to declare the manufacture, import or distribution of a device to be an infringing act would necessarily have to focus solely on devices the sole (rather than just primary) purpose of which is to circumvent protective measures. (See also section 2d below.)

42. Recently, relying on these provisions of the DMCA, the FBI arrested Dmitry Sklyarov, a Russian computer security researcher who had presented a paper at a conference in Las Vegas on the strengths and weaknesses of security features found in Adobe System's Acrobat eBook Reader. In response to the arrest, Professor Lawrence Lessig, commenting on the provisions of the DMCA, argued that:

It is law protecting software code protecting copyright. The trouble, however, is that technologies that protect copyrighted material are never as subtle as the law of copyright. Copyright law permits fair use of copyrighted material; technologies that protect copyrighted material need not. Copyright law protects for a limited time; technologies have no such limit.

Thus, when the D.M.C.A. protects technology that in turn protects copyrighted material, it often protects much more broadly than copyright law does. It makes criminal what copyright law would forgive.

America is essentially alone in this strategy of techno-lawmaking.

This is bad law and bad policy. It not only interferes with the legitimate use of copyrighted material, it undermines security more generally.

Authors have an important and legitimate interest in protecting their copyrights. The law should help authors where it can. But the law should not push its power beyond the protection of copyright, and the law should especially not criminalize activities that are central to research in encryption and security.

43. In the Companies' view, to the extent that the Departments deem it necessary to also target manufacturers or distributors of devices or services that circumvent technological measures, any offence must be limited to situations where, based on the notion of intent (i.e. "purpose" as opposed to only "effect" of a device or service):

- the device or service is designed or produced primarily for the purpose of circumventing a technological measure;
- the device or service has only limited commercial purpose or use other than to circumvent a technological measure; and
- the device or service is promoted or marketed for the purpose of circumventing a technological measure.

44. Furthermore, any legislative framework for the protection of technological measures should refrain from imposing unreasonable burdens on the various stakeholders. Any such legislation should not prevent the normal operation of electronic equipment and its technological development. In addition, such legislation should not constrain research and development in the fields of encryption and technological prevention, even if devices and methods for overcoming this protection are developed in the course of such research. Without this safeguard, it would be difficult, if not impossible, to develop and improve on such protection in the future.

45. The design, production and distribution of general or multi-purpose devices that have legitimate
non-circumventing uses should not be restricted by legislation, even if such devices may not recognize or respond to such protective technological measures. Equipment manufacturers and ISPs should not have to bear the cost of having to design or alter their products or services in order to respond to any particular technological measure that might be used. Similarly, ISPs should not be liable for inadvertent circumvention as a result of either incompatibility of technological measures with their networks or the actions of others using their networks.

c) Protection of Rights Management Information

(i) Knowledge requirement
46. The WIPO Treaties create an obligation on Contracting States to establish effective remedies against any person who "knowingly" removes or alters rights management information without authority. The two articles are very clear in their wording that this is not a strict liability offence. Anyone who commits one of these offences must do so intentionally, that is, for "infringing purposes".

(ii) Information to be protected
47. Generally, there is agreement that the protection of rights management information from alteration or removal would extend to "factual" information, e.g. the name of the author. There is more controversy, however, on whether or not such protection should also extend to the terms and conditions of use that are usually included in contracts or licence agreements.

48. Consistent with the WIPO Treaties, legal protection of rights management information should be extended only when such information is associated with a copy of, or appears in connection with the communication to the public of, a work.

49. The Companies favour the Departments' Option A. Under this option, the Copyright Act should define "rights management information" to be consistent with the WIPO Treaties. The terms used in the definition of "rights management information", e.g. name of the author, should be interpreted according to their meaning in the Copyright Act. Furthermore, protecting such information from alteration or deletion should not be construed as confirming the legal validity in Canada of the information.

(iii) Secondary infringement
50. As suggested by the Departments, a secondary infringement offence could be created to capture the distribution and communication to the public of works or copies of works when it is "known" that rights management information has been in some way altered or removed without authorization.

51. However, there should be no liability for secondary infringement for an ISP in the performance of its varied transmission functions where there is no knowledge on the part of the ISP of such infringement. Furthermore, in addressing the knowledge requirement for subsequent use or onward transfer regarding the communication to the public, and consistent with the Companies' proposal for limited ISP liability addressed below, the proposed "notice, notice and takedown" regime could equally apply to works where the rights management information has been removed or altered without authority.

d) Exceptions to the Protection of Technological Measures and Rights Management Information
52. Much of the debate surrounding the use of technological measures has focused on whether or not it is possible to deploy technological measures in the on-line environment that will protect the interests of the rights holders while preserving the traditional rights and privileges of consumers.

53. It is feared that technological protection measures could potentially be used unreasonably to prevent all access to, and dealing with, copyright works without the permission of the copyright owner, even contrary to a permitted act provided under the Copyright Act.

54. The WIPO Treaties clearly allow for exceptions to the circumvention of technological measures when it is "permitted by law". For example, the EU Copyright Directive provides that copyright owners must provide the ability for users to access content that they are legally allowed to access.

55. Generally, therefore, in order to maintain the balance between owners and users, any existing limitation or exception to a copyright in a work, such as the fair dealing provisions, should also apply to the circumvention of technological measures, as well as to the alteration or removal of rights management information.

e) Civil and Criminal Remedies
56. It is important that both civil remedies and criminal penalties be provided in the Copyright Act for effective protection against the circumvention of technological measures and the alteration or removal of rights management information, as civil remedies alone are likely to be inadequate. Criminal liability is required to stigmatize such activities as unlawful and to deter their continuance and expansion. For example, criminal penalties for any prohibited activities relating to technological protection measures and electronic rights management information could be introduced on the same basis as those that apply to activities involving commercial dealing in infringing copies.

57. In the past, to the extent that criminal sanctions have been introduced for copyright infringement, Canada has included those criminal provisions directly in the Copyright Act, as opposed to in another piece of general application legislation such as the Criminal Code. There has been no reason to suggest a move away from that approach.


f) Privacy considerations
58. It is possible that, in certain situations, both technological protection measures and rights management systems might infringe an individual's right to privacy by tracking consumption patterns and recording on-line behaviour.

59. In this regard, the EU Copyright Directive notes that, depending on their design, such measures may at the same time process personal information about the consumption patterns of users and track their on-line behaviour. These technical means, in their use by rights holders as well as in their technical functions, should incorporate adequate privacy safeguards consistent with fair information practices contained in the EU Data Protection Directive .

60. In the United States, the DMCA includes limited exceptions to the prohibition on circumventing technological measures. For example, an individual may de-activate certain protective measures in the absence of notification regarding the collection, use or disclosure of personal information. Provision for this type of "privacy" exception was deemed necessary in the absence of general framework privacy legislation that would otherwise apply to the use of technological measures in the private sector.

61. Canada, however, recently enacted the Personal Information Protection and Electronic Documents Act (the "PIPED Act") . The PIPED Act is a technology-neutral law of general application that applies to the private sector's collection, use and disclosure of personal information in the course of its commercial activities, and would naturally extend to the practices of rights owners.

62. The issue, therefore, is one of remedy. If a consumer of a copyright work believes that a rights holder is trying to collect personal information without his or her consent, or that the information is not necessary for the purposes of a transaction, then the consumer's recourse should be the same? In the Companies' view, it should make no difference whether the event takes place on-line or off-line, nor should it matter whether or not the good or service to be consumed is protected by copyright.

63. However, would new provisions in the Copyright Act prohibiting the circumvention of technological measures and protecting rights management information prevail over privacy rights granted under the PIPED Act?

64. Subsection 4(3) of the PIPED Act states that:
Every provision of this Part applies despite any provision, enacted after this subsection comes into force, of any other Act of Parliament, unless the other Act expressly declares that that provision operates despite the provision of this Part. [underlining added]

65. Unless the Copyright Act specifically overrode the PIPED Act, the use of technological measures and rights management information would not alter the obligations of rights holders in Canada under the PIPED Act to obtain the consent of the consumer for the collection, use and disclosure of personal information.

66. The continued application of the PIPED Act will ensure that the rights of individuals regarding the collection of their personal information is applied consistently regardless of the transaction, and that a balance is maintained between the legitimate needs of rights holders to protect and manage their copyrighted works and the privacy rights of individuals.


3. Liability of Internet Service Providers in Relation to Copyright

a) Introduction
67. As with other questions of copyright raised by digital technology, the issue of intermediary liability for on-line copyright infringement involves a matter of balancing the interests not only of owners against users, but also of intermediaries, such as ISPs. For the purpose of the Companies' comments, the term "Internet service provider", or "ISP", should be understood to mean those persons engaged in activities which may range from the simple provision of Internet access to the hosting of Web site content, or any combination thereof. All stakeholders, including content providers, ISPs and end-users, have a common interest in fighting illegal activities in the digital environment and establishing a predictable and efficient legal and business framework to ensure the full development of an electronic marketplace.

68. As the Departments noted, after a lengthy proceeding regarding Phase I of proposed SOCAN Tariff 22 for the use of music on-line, the Copyright Board of Canada found that an ISP does not communicate to the public by telecommunication when it performs the passive role of providing general access to the Internet, and so is not responsible for infringement when copyright materials are communicated by third parties using an ISP's system. As far as the "common carrier" or "mere conduit" exemption is concerned, the Board found that:

[p]ersons who can avail themselves of paragraph 2.4(1)(b) of the Act with respect to a given communication of a work do not communicate the work. Generally speaking, this includes all entities acting as Internet intermediaries such as the ISP of the person who makes the work available, persons whose servers act as a cache or mirror, the recipient's ISP and those who operate routers used in the transmission.

69. The Board also confirmed that only in those circumstances where an ISP acts as, or in concert with, a content provider would the ISP be liable for the communication to the public of musical works. This decision demonstrates a clear understanding of the technology and the practical inability of ISPs to control, monitor or block access to infringing or illegal content made available on-line.

70. If the Board's decision is upheld, the standard applies only to the use of music on-line for the right of communication to the public by telecommunication. Uncertainty remains as to the application of the exemption to other works, not to mention the extent of liability, if any, of ISPs for copyright infringement for other rights, such as the reproduction right.

71. The uncertainty of ISP liability for copyright infringement may affect investment in Internet services. Alternatively, it may lead ISPs to impose unduly restrictive requirements on their customers or to seek legal indemnities from them. The desire to avoid liability may also lead ISPs to remove material from Web sites they host, even where there is no conclusive proof that the material in question infringes copyright, thereby acting as de facto censors and potentially restricting freedom of expression. A balance must be struck between protecting the interests of content owners and users of on-line content, while encouraging the development of a strong and competitive ISP industry.

72. It is therefore unreasonable for ISPs to be liable for copyright infringement occurring through the unauthorized placement of copyright material on the Internet because of :

· the inability of ISPs to determine that a work is an infringing work;
· the potential exposure to liability for any consequent economic loss suffered by the Web site proprietor as a result of an ISP's removing material from a Web site that it hosted in the mistaken belief that it is infringing; and
· the likelihood that the wide exposure of ISPs to liability for copyright infringement, including the impracticality of managing risk, could lead to higher costs for consumers.

b) Other Jurisdictions

i) The U.S. Digital Millennium Copyright Act
73. In general terms, the DMCA limits the liability of service providers in circumstances where the service provider acts merely as a data conduit, transmitting digital information from one point on the network at someone else's request. This limitation covers acts of transmission, routing or providing connections for the information, as well as the intermediate and transient copies that are made automatically in the operation of the network.

74. Specifically, Title II of the DMCA adds a new section to the U.S. Copyright Act to create four new limitations on liability for copyright infringement by service providers : i) transitory communications; ii) system caching; iii) storage of information on systems or networks at the direction of users; and iv) information location tools. Each limitation entails a complete bar on monetary damages, and restricts the availability of injunctive relief in various respects. Each limitation relates to a separate and distinct function, and a determination of whether a service provider qualifies for one of the limitations does not bear upon a determination of whether the service provider qualifies for any of the other three. Furthermore, the second, third and fourth limitations of liability are also subject to a service provider "safe harbor" that protects service providers from third-party claims.

75. A party seeking the benefit of the limitations on liability must qualify as a "service provider". For the first limitation regarding transitory communications, a service provider is defined as "an entity offering the transmission, routing, or providing connections for digital on-line communications, between or among points specified by a user, of material of the user's choosing, without modification to the content of the material sent or received". Service provider is more broadly defined for the other three limitations as "a provider of on-line services or network access, or the operator of facilities therefor".

76. In addition to following the conditions for each limitation, the service provider must have filed with the U.S. Copyright Office a designation of an agent to receive notifications of claimed infringement. In order to qualify for these three limitations on liability, a service provider cannot have actual knowledge of the infringement, must be unaware of facts or circumstances from which infringing activity is apparent, or, upon gaining such knowledge or awareness, must have responded expeditiously to take the material down or block access to it.

77. Under the notice and takedown procedure, a copyright owner submits a notification under penalty of perjury, including a list of specified elements, to the service provider's designated agent. If, upon receiving a proper notification, the service provider promptly removes or blocks access to the material identified in the notification, the provider is exempt from monetary liability and is protected from any liability to any person for claims based on its having taken down the material.

78. In order to protect against the possibility of erroneous or fraudulent notifications, the subscriber has the opportunity to respond to the notice and takedown by filing a counter-notification. In order to qualify for the protection against liability for taking down material, the service provider must promptly notify the subscriber that it has removed or disabled access to the material. If the subscriber serves a counter-notification complying with statutory requirements, including a statement under penalty of perjury that the material was removed or disabled through a mistake or misidentification, then the service provider must provide a copy of the
counter-notification to the person that sent the original notice and, unless the person files an action seeking a court order against the subscriber, the service provider must put the material back up within 10-14 business days after receiving the counter-notification.

79. In addition, to be eligible for any of the four limitations, a service provider must meet two overall conditions: i) it must adopt and reasonably implement a policy of terminating in appropriate circumstances the accounts of subscribers who are repeat infringers; and ii) it must accommodate and not interfere with standard technical measures. The DMCA makes it clear that, in order to qualify for the limitations on liability, a service provider is under no obligation to monitor its service or affirmatively seek out information about copyright infringement on its service.

80. The failure of a service provider to qualify for any of these limitations does not necessarily make it liable for copyright infringement. A copyright owner must still demonstrate that the provider has infringed, and the service provider may still avail itself of any of the defenses, such as fair use, that are available to copyright defendants generally.

81. Title II also establishes a procedure by which a copyright owner can obtain a subpoena from a federal court ordering a service provider to disclose the identity of a subscriber who is allegedly engaging in infringing activities.

ii) The EU Copyright and Electronic Commerce Directives
82. Two separate Directives address the issue of ISP liability for copyright infringement in the European Union.

83. First, in June 2000, the EU Electronic Commerce Directive was adopted, taking a horizontal approach to the liability for intermediary activities in the network environment, including liability for copyright infringement. Member States have until 17 January 2002 to bring their domestic legislation into compliance with the Directive.
84. This Directive establishes principles regarding the liability of ISPs acting as intermediaries. In recognizing the technical, automatic and passive nature of intermediary functions, the Directive provides for graduated limitations on liability by either exempting or limiting ISPs from liability in the course of providing three services: mere conduit, caching and hosting. Each exemption or limitation is subject to specific conditions and the latter two are subject to the ISP's acting expeditiously to remove or disable access to information upon obtaining knowledge of the illegal activity or information.

85. The Directive explicitly states that there is no general obligation on the ISP to monitor the information transmitted or stored, nor a general obligation to actively seek facts or circumstances indicating illegal activity.

86. The Directive, though silent on the actual procedures to be adopted at the national level for what is in essence a notice and takedown regime, encourages the drawing up of codes of conduct designed to contribute to its proper implementation. Therefore, the actual procedures for removing and disabling access to infringing information have not yet been established within the various Member States. This area of intermediary liability, and specifically notice and takedown, will be reviewed at the Community level in 2003.

87. The EU Copyright Directive , adopted in May of this year, is essentially intended to comply with and implement new international obligations as a result of signing the new WIPO Treaties, e.g. making available, legal protection of technological measures and rights management information. The Directive, however, provides an obligatory exception for ISPs in limited circumstances for particular acts of reproduction which are considered technical copies.

88. Introductory language makes it clear that provisions relating to liability contained in the Electronic Commerce Directive apply in the context of copyright liability. The Copyright Directive, however, supplements the liability provisions of the Electronic Commerce Directive by confirming that injunctive relief, i.e. the ability to stop infringing activity by court or other action must also be available to rights holders against ISPs when their services are used by third parties to infringe copyright.

89. Though Member States have until 22 December 2002 to bring their domestic legislation into compliance with the Copyright Directive, both Directives express the desire that the Copyright Directive be implemented within a timetable similar to the Electronic Commerce Directive, since the latter Directive provides a harmonized framework of principles and provisions relevant to the Copyright Directive, i.e. intermediary liability.

iii) Japan
90. An unofficial summary of a December 2000 interim report from the Japanese Copyright Council outlines four major proposals regarding a proposed legislative scheme for ISP liability for on-line activities, including copyright infringement:

· No obligation to monitor: ISPs should not be obliged to monitor information transmitted or stored on their networks or servers.

· Introduction of "notice, notice & takedown" ("NN&TD") procedure: By introducing an NN&TD procedure, ISPs will principally not be liable if they proceed in accordance with NN&TD. The proposed Japanese NN&TD is different from that of the U.S. DMCA in that it is considering the introduction of another "notice" step in the procedure. The proposed procedure is as follows:

(1) When an ISP receives a notice that satisfies certain requirements, it informs the subscriber.
(2) The subscriber can object to the notice within a certain period.
(3) If no counterclaim comes from the subscriber, the ISP will be exempt from liability if it takes down the information. However, if the subscriber does counterclaim against the original notice, the ISP will be free from liability if it does not take down the information.

Adoption of this procedure would be voluntary. It is somewhat unclear from the proposal, but it appears that an ISP may still be faced with a claim for tort liability, given the serious possibility of infringement, even if the ISP has followed the NN&TD procedure.

· Injunction against ISPs: This recognizes that, even if the proposed NN&TD procedure is introduced in the legal system, allegedly infringing information may remain available on-line, such that the scheme may include the possibility of obtaining an injunction against an ISP .

· Disclosure of alleged infringer information: The Japanese Constitution requires that, as a principal human right, the secrecy of telecommunications should be respected. This requirement is interpreted to cover communications per se and its subscriber information (name, address, telephone number, etc.). ISPs are also obliged to keep subscriber information confidential pursuant to the Electronics Telecommunications Act. However, in order to start the judicial proceedings, the plaintiff must specify at least the name and address of the defendant. In the network environment, this information is not always available to the plaintiff. The proposed disclosure scheme would consider:

(1) whether to disclose or not should be decided by the court; and
(2) if the subscriber shall be given a chance to object to the disclosure.

iv) Australia
91. In Australia, the Copyright Amendment (Digital Agenda) Act 2000 came into force on 4 March 2001 and is intended to be consistent with the standards adopted in the WIPO Treaties.

92. The Digital Agenda Act introduces a new exception for temporary reproductions made as part of the technical process of making a communication. The exception is limited to temporary copies made in the course of browsing or viewing material on-line that are part of non-infringing communications, and are reproductions that have little or no independent economic significance.

93. Concerning on-line liability, the Digital Agenda Act provides that persons will be directly liable for copyright infringements involved in a communication only where they have determined the content of that communication, e.g. if they administer the Web sites themselves. Therefore, a carrier or ISP will not be directly liable for an infringing communication where a third party has determined the content.

94. In certain cases, however, an ISP may be found to have authorized an infringement committed by a user of that service. The key factors in determining whether the ISP has authorized an act include: the ability to prevent the infringement; the relationship with the infringer; the steps taken to avoid infringement; and compliance with any relevant industry codes of practice.

95. The Act clarifies, however, that a person will not be held to have authorized a copyright infringement merely by providing the facilities involved in the infringement.

c) The Current Canadian ISP Industry and Bell Sympatico Approach
96. Earlier this year, Bell Sympatico Internet Service implemented a model industry-wide approach developed by the Canadian Association of Internet Providers and the Canadian Cable Television Association for their members resulting from discussions with the Canadian Recording Industry Association ("CRIA"). In essence, the approach is a three-step process known as "notice and notice", with no actual takedown by the ISP (except in accordance with a court order). The ISP is basically fulfilling the function of a postal delivery service, guaranteeing to CRIA that the user receives CRIA's copyright infringement complaint. If infringing content is not voluntarily removed, CRIA is free to take whatever appropriate legal action it deems necessary. In this way, the ISP is not required to judge the validity of the claim.

97. For Bell Sympatico, the process works as follows. After CRIA has completed its own investigation and determines that infringement has occurred, it locates the ISP that is hosting the content. Once the identity of the hosting party is determined, e.g. Bell Sympatico, three steps are followed:

Step 1: CRIA forwards a complaint regarding allegedly infringing material and its location to Bell Sympatico.

Step 2: Bell Sympatico forwards a "customer copyright notice" to its user that: includes details of the complaint; reminds the user of his/her service agreement with Sympatico and of our Acceptable Use Policy that prohibits the use of our service for illegal activities, including those that infringe copyright; provides a link to these documents; and encourages the user to contact CRIA directly.

Step 3: Bell Sympatico then forwards a reply to CRIA, stating its position that it is not liable for copyright infringement by third parties, and confirms that the complaint was received and that the user in question was notified of it.

98. Since Bell Sympatico began using the "notice and notice" procedure for CRIA copyright complaints, all have been resolved effortlessly as of the end of June. Bell Sympatico has also begun to use this same procedure with other copyright organizations, with similar results. It is evident that, in most cases, users are either unaware that their conduct infringes copyright or concede that their conduct infringes copyright and proceed to voluntarily take down the infringing material.

99. Furthermore, it is Bell Sympatico's procedure to always ask for the consent of the complainant to disclose their identity and contact details to our user. By obtaining consent from CRIA and other copyright organizations on a going forward basis, we have been able to eliminate an intermediate step allowing us to move expeditiously to notify our users of copyright complaints. This process also protects the privacy rights of our users.
100. Though the "notice and notice" approach has been quite effective, it nevertheless remains insufficient for dealing with infringing copyright material that is not removed voluntarily by the user. Also, ISPs are generally not taking down any allegedly infringing content, as there are no agreements between ISPs and copyright owners that would shield ISPs from potential third-party claims, i.e. no ISP safe harbor.

d) Adopting a Canadian Approach to ISP Liability
101. The Companies strongly support the general approach proposed by the Departments that would exempt ISPs from liability for copyright infringement for transmission-related activities, coupled with a regime of limited liability for hosting-related activities. Such an approach highlights the fact that compulsory licensing in the form of a blanket licence is inappropriate for transmission functions, but more appropriate in the context of licensing content providers or Web site owners, those entities who actually control the content made available on-line.

102. To begin, any amendment to the Copyright Act should define the activities or functions, as opposed to an entity performing those functions, for the purpose of defining an exemption or limitation of liability for copyright infringement. The distinction, therefore, should not be based on different categories of ISPs, but rather on the specific types of activities or functions undertaken by the ISP. The fact that an ISP would qualify for an exemption or limitation of liability as regards a particular activity should not provide the ISP with an exemption or limitation for other activities, unless the ISP meets the necessary conditions for those activities as well.

i) "Exemption" from liability for transmission-related activities
103. The Diplomatic Conference that drafted and adopted the WIPO Treaties considered the liability of ISPs in the context of the right of making available. As expected, the question of ISP liability was highly contentious and so the Treaties do not include an international standard for such liability. However, concern was expressed that liability might be imposed on ISPs in circumstances in which they could not be expected to monitor the material that was made available. In order to provide some comfort for ISPs, the Conference adopted a statement expressing the understanding that the mere provision of physical facilities for enabling or making a communication does not itself amount to communication .

104. Canada should codify the SOCAN Tariff 22 standard noted above where the Board found that there was no liability for copyright infringement of the right of communication to the public by telecommunication when an ISP acts as a pure conduit or in the course of transmission functions. The common carrier exemption should be extended to all works for all existing rights (e.g. reproduction, retransmissions) and any new rights (e.g. making available, circumvention of technological measures and rights management information).

105. Only a relatively small portion of all copyright material is administered collectively, i.e. music. Making ISPs liable for all copyright content communicated on-line would force them to pay blanket licence fees for the copyright content administered collectively, and to negotiate individual licences for content over which they have no control and of which they are not even aware. Not only is this completely unworkable, it would also put Canadian ISPs at a significant competitive disadvantage to those in other jurisdictions.
106. ISPs in Canada, therefore, need legal protection similar to that already given under the "common carrier" or "mere conduit" exemption to telephone companies in section 2.4(1)(b) of the Copyright Act for copyright infringements committed by third parties, such as their subscribers. In these circumstances, the ISP plays a passive role as a conduit of information for third parties (the recipients of the service). This view is consistent with the WIPO Agreed Statements as well as the Copyright Board decision in Tariff 22.

107. In order to fall within any exemption from liability, there appears to be a consensus that three basic conditions must be met:
i) the ISP should not initiate the transmission;
ii) the ISP should not select the receivers of the transmission; and
iii) the ISP should neither select nor modify the information contained in the transmission.

ii) "Exemption" from liability for transient copying or temporary reproductions
108. The WIPO Treaties also do not address the highly contentious issue of transient reproductions. While the Conference's agreed statements state that the "storage" of a protected work (or the use of performances and phonograms) in digital form in an electronic medium constitutes a reproduction within the meaning of the Berne Convention (and the WPPT) , the Conference did not believe that specific provisions were needed with respect to the application of the right of reproduction concerning temporary, transient or incidental reproductions, leaving this to individual Member States to decide. The WIPO Treaties do not therefore require the imposition of strict liability for ISPs and other providers for the unauthorized copyright activities of their subscribers.

109. Under the Copyright Act, a copyright owner is provided with the exclusive right to reproduce a work or substantial part thereof. The problem for ISPs is that temporary reproductions are often made in the course of the technical process of communicating a work on a communication network, including the Internet. Some may argue that temporary reproductions, made in the course of a transmission, should be considered "reproductions " for copyright purposes, extending copyright liability to ISPs, since there is no common carrier exemption to the right of reproduction. In the Companies' view, the right of reproduction in the Act was never intended to capture these transient "reproductions", as they do not represent the final product or work to be consumed, but rather a temporary and necessary step in a transmission.

110. The EU Copyright Directive has also introduced an exception to the exclusive right of reproduction for temporary acts of reproduction that are transient or incidental and that form an integral and essential part of a technological process carried out for the sole purpose of enabling either an efficient transmission in a network between third parties by an intermediary or a lawful use of a work .

111. In the U.S., the Copyright Office recently reported on the impact of copyright law and amendments found in the DMCA on electronic commerce and technological development . In the report, the Copyright Office recommends that Congress enact legislation to amend the U.S. Copyright Act to preclude any liability arising from temporary copies incidental to a licensed digital performance, recognizing that there is no economic value in the buffer copies themselves, which are created solely to enable the performance which has been separately paid for.

112. In Canada, therefore, the intermediate and transient storage taking place during a transmission should also be covered by a common carrier exemption. The introduction of exceptions for temporary reproductions is in recognition of the fact that the processes underpinning network technologies rely on numerous temporary reproductions. Specifically, exemptions should be made in the Act permitting the making of a temporary copy for transmitting, browsing and caching upon meeting the same three conditions outlined above for transmission-related activities in section 3 d) i.

113. An exemption for "transmitting" would allow an ISP to make a transient copy of material provided by the recipient of the service in order to transmit, route or provide network connections, or to provide access to a communications network, without infringing copyright. Only those acts of storage that take place during the course of transmitting the information and that do not serve any purpose other than carrying out the communication should benefit from the exemption.

114. An exception for "caching" is necessary to permit the temporary copy of a work to be stored as part of the automatic technical process and ordinary operation of technology (either on the user's computer or on the networks of an ISP). Since these types of caches are of limited size, they are normally emptied out automatically as new copies replace older ones. Also, caches are usually programmed to delete temporary copies after a fixed period, e.g. once a week. Such storage is "intermediate" in that it is made in the course of the transmission and "transient" because it is for a limited period of time and is meant to denote that the information is not to be stored beyond the time that is reasonably necessary for the transmission. The benefit derived from the use of caching is limited to the resulting technical efficiencies; no additional benefit to users or ISPs is derived from the content itself.

115. A similar exception to the right of reproduction should also be provided for temporary copies made in the course of "browsing". Similar to the transmitting and caching exception, it would permit the operation of the technical processes necessary to simply view or play a work that has been made available on-line. An exception for temporary copying for purposes of browsing simply clarifies the right of the user to browse what the copyright owner has made publicly available without having to obtain further consent to reproduce it in the context of browsing. This situation is analogous to a reader's reading an article in a newspaper. This exemption would not include the making of a permanent reproduction of the work.

116. As far as users are concerned, it is difficult to see how incidental copying that occurs purely as a consequence of the technical processes of a computer system would damage owners' interests, particularly where the copies are temporary and automatically made without the user's knowledge. It would be necessary to provide that certain types of transient copying, e.g. in the course of browsing on-line, do not give rise to liability for infringement, in order to protect the user's interest.

iii) "Limitation" of liability for hosting-related activities
117. Today, rights holders who are aggrieved by allegedly infringing material on-line must either seek legal remedies from the courts or try to privately negotiate with ISPs on an ad hoc basis to take down such material. In the latter case, the notice and notice procedures adopted by Bell Sympatico and many other Canadian ISPs are increasingly curtailing the availability of infringing content on-line on sites hosted by those Canadian ISPs, and serve to educate users about the legitimate use of copyright works. However, both rights holders and ISPs generally concur that it is preferable to have an agreed set of procedures that provide for predictability and that minimize possible exposure than it is to negotiate privately on an ad hoc basis each time there is an alleged infringement.

"Notice, notice and takedown"
118. The Companies support the adoption of a limited ISP liability regime in Canada where an ISP would not be liable for copyright infringement for content it hosted or cached on its own servers unless it failed to take appropriate action consistent with legislative requirements.

119. Contrary to the U.S. DMCA, the Companies favour an approach that relies more on notice and resorts to takedown supported by a court order only in exceptional cases. In the Companies' view, a Canadian "notice, notice and takedown" regime would include the following three main steps:

Step 1 - Notice to service provider
A rights holder or interested party elects to forward a "proper" notice to the ISP hosting the content.

In order to provide certainty for ISPs to allow them to know when to act and to act quickly, the
components of a notice must be clear. The Consultation Paper suggests that a "proper" notice should:
- be in writing;
- clearly identify the claimant and the claimant's interest in the infringing material;
- identify the claim, including a description of the infringing material; and
- identify the location of the infringing material.

Other elements that could be included in the notice are:
- the signature (physical or electronic) of a person authorized to act on behalf of the rights holder;
- contact information of the claimant (address, telephone number, and if available, e-mail address);
- for privacy considerations, a statement that the ISP may forward the contact information to the user; and
- a statement that the claimant is authorized to act on behalf of the owner.

For purposes of the notice, an "interested party" could be a person or organization that has a connection to the material, e.g. an agent of the copyright holder or a copyright collective that represents the copyright holder.

Consistent with fair information practices contained in privacy legislation, under no circumstances should an ISP be required at this stage to divulge subscriber details to the complaining party.

Step 2 - Notice to subscriber
Upon receiving a proper notice, the ISP is required to forward it to the ISP's subscriber, outlining details of the complaint, including the contact details of the complainant.

The Departments may want to consider introducing a specific period to be included in the subscriber notice for voluntary removal of the allegedly infringing material. However, under no circumstances should an ISP be obliged to monitor whether voluntary takedown takes place. Furthermore, an ISP should be under no obligation to screen or actively monitor content provided by, and stored at the request of, a recipient of its service, nor be required to seek facts or circumstances indicating infringing activity.

Step 3 - Takedown by ISP
Only upon being presented with a court order does an ISP take down the infringing content which one of its users has stored on a server that it hosts, thereby eliminating the need to introduce awkward and cumbersome "putback" procedures.

Even though the Copyright Act already provides for the use of summary proceedings, the Companies recognize that rights holders may require a more expeditious method to obtain a court order in these exceptional circumstances such that the Act could introduce some form of expedited procedures. However, given that the ISP is indeed acting as an intermediary, unreasonable costs associated with complying with such expedited court orders should not be borne by the ISP. For the most serious infringements, copyright owners can always seek a court order in the first instance to expedite takedown by an ISP, by-passing the "notice and notice" steps.

120. In the Companies' view, by placing greater emphasis on notice, the proposed notice, notice and takedown regime: is much less administratively burdensome than the U.S. DMCA procedures; is more consistent with the way ISPs currently operate in Canada, and extends that practice to all Canadian ISPs; and introduces a greater level of clarity and certainty to the process. Furthermore, by introducing expedited procedures for obtaining a court order in the first instance for serious infringements or for those exceptional circumstances where voluntary takedown does not occur, the process provides the necessary relief content owners need. Finally, since an ISP is required to take down allegedly infringing material only upon presentation of a court order, there is no need to introduce a safe harbour exempting ISPs from liability or damage claims resulting from taking down allegedly infringing material, nor is there a need to introduce provisions to address liability for wrongful notice by rights holders or inte rested parties.

Which ISP activities?
121. The extension of limited liability for ISPs should apply only to those activities where an ISP is performing either hosting or caching functions using its own servers. Otherwise, since ISPs cannot be expected to be enforcers, in that they cannot access end-users' hard-drives, they should be exempt from any liability for those intermediary functions that are not amenable to notice, notice and takedown (e.g. peer-to-peer). However, ISPs, through agreement with rights holders or otherwise, may adopt a practice of forwarding a notice to an end-user in such circumstances.

122. The Companies note the use of the phrase "block access" in the Consultation Paper. If the intent of the phrase "block access" is being used in relation to a newsgroup that an ISP has decided to host on its servers, then the Companies would agree that an ISP should be required to "block access" to that newsgroup in that it will no longer be hosted on that ISP's servers, even though the newsgroup may be accessible from the server of another ISP. Any obligation imposed on an ISP to otherwise "block access" to a Web site hosted by another ISP, though technically possible, not only significantly decreases the efficiency of the network, but is also quite burdensome, as the blocking function must be manually programmed and the site owner can defeat the attempt to block the site by merely changing its IP address.

No need for ISP registration
123. The approach adopted in the U.S. under the DMCA of requiring ISPs to "designate" an agent and "register" with the Copyright Office has proven to be complex and administratively burdensome. Canada should avoid the adoption of a similar regime.

124. A requirement for ISP registration is therefore unnecessary to allow interested parties to contact an ISP. Rather, one would expect that industry practice would develop such that ISPs would voluntarily provide contact information on their Web sites for the purposes of content complaints, and specifically for copyright complaints. The information provided could include a statement regarding the ISP's compliance with notice, notice and takedown procedures and how to provide adequate notice, consistent with legislated criteria. ISPs may also eventually include in their terms and conditions or acceptable use policies their compliance with notice, notice and takedown procedures, including policies for repeat infringers.

125. Every device that is connected to the Internet, including any server hosting a Web site, has an IP address associated with it. Records are kept as to the name and address of any entity to which a particular IP address is assigned, and the identity of any person who is assigned a URL associated with a Web site. Furthermore, even if it may be difficult in a given situation to ascertain who owns a Web site or operates a server, one can trace the ISP connecting any Web server to the Internet.

126. The suggestion in the Consultation Paper that ISPs might be required to establish an "identifier" or logo on the sites they host or cache creates problems in that it would lead to issues of "interference" with the branding and functioning of a site. In most cases of individual users, the URL is suitable as an identifier of the user's ISP, e.g. jane_doe@sympatico.ca. For business users, the use of a "look-up" service is easy enough in these circumstances to determine the user's ISP or hoster. Rights holders have become adept at using these techniques, as evidenced by the copyright notices that Bell Sympatico has received from CRIA and other rights holders.

Possibility of a "hybrid" approach
127. The Copyright Act could encourage alternative approaches such that the Canadian regime for notice, notice and takedown does not necessarily have to be a legislated system for all parties. It could allow for the contracting out of the provisions, just as parties are free to contract out of other legislation, e.g. provincial legislation regarding sale of goods. The Copyright Act could provide that the notice, notice and takedown regime is subject to any contractual or other mutually acceptable arrangements entered into between the parties.

128. Such agreements could address issues such as: the identification of the interested party for the purpose of a notice, e.g. a copyright collective; the information to be included in a notice; actual procedures for notice and takedown, including any delays for taking down content; ISP indemnification for third-party damage claims; policies for repeat infringers; etc. In the absence of any agreement, parties would naturally fall back on the Act.

129. This hybrid approach would provide alternatives for larger collectives of copyright owners, would continue to provide a method for individual content owners to protect their rights on-line while protecting the rights of individual users, and would provide the necessary certainty for ISPs to know when to act in order to continue to limit their liability.

III. CONCLUSION

130. For Canada to truly succeed in the knowledge-based economy, Canadians need to create and have easy access to information and content on the Internet. The competitive advantage in electronic commerce will be based on the ability to develop advanced information products. In many ways, therefore, the future growth of the Internet as a cultural, entertainment and information medium depends upon developing systems that provide adequate protection and compensation to content creators and intellectual property rights owners while ensuring Canadians reasonable, legal access to copyright works.

131. It is not in Canada's interest that copyright havens be created which effectively deny creators the ability to protect their works from unauthorized use or to prevent them from obtaining adequate compensation for the use of those works. In the digital age of the Internet, Canada must ensure that domestic legislation enacted to protect creators does not isolate Canada and its creators from realizing the economic benefits of this new means of product and service distribution.

132. However, Canadian copyright legislation is already quite advanced and its degree of compliance is high relative to international standards and experience. Therefore, the Companies agree that changes to the policy framework for copyright should not operate to hinder the development of the full potential of the Internet and the digitally networked environment. In the Companies' view, the proposed amendments outlined above maintain an appropriate balance between the rights of creators and users of content while creating certainty for ISPs, and they will stimulate the growth of electronic commerce in Canada.

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