SOCAN fires back on Tariff 22 leave to appeal before Supreme Court

The collective society representing songwriters and music publishers has weighed in with arguments why the Supreme Court of Canada shouldn’t hear a high-profile appeal on Internet music royalties. In response to a leave to appeal application filed by the Canadian Cable Television Association (CCTA), Bell Canada and the Canadian Association of Internet Providers (CAIP), the Society of Composers, Authors and Music Publishers of Canada (SOCAN) has fired back that the Federal Court of Appeal’s decision on Tariff 22 shouldn’t be reviewed (CNM, Aug. 21/02). But the collective says that if the court does hear an appeal by the applicants, then it would also like permission to appeal several aspects of the lower court’s decision of last May. On October 14, SOCAN filed an application with the Supreme Court stating that it opposes the CCTA and others’ leave to appeal a May 2 determination by the lower court that music downloaded from servers outside Canada could trigger royalty payments and that ISPs could be subject to tariffs when they provide services such as content caching not strictly necessary to the communication of files from host server to user (CNM Special Update, Aug. 1/02). ISP licensing scheme proposed by New Democrat memberNDP MP Peter Stoffer has re-introduced an ISP licensing scheme as a private member’s bill in the House of Commons to combat child pornography online – Bill C-234, the Internet Child Pornography Prevention Act. Though it stands almost no chance of passage, online freedom advocates are concerned by the proposal to license Internet service providers through the CRTC. The bill would also outlaw the possession of child porn obtained from the Internet, or use of the Internet to contact a minor for purposes of unlawful sexual activity.Likely to be a sticking point for ISPs and others is a proposed clause on prohibited service, which would disallow any ISP from knowingly allowing the posting of child pornography or content by any person the ISP knows has been convicted of an offence under the proposed Act in the previous seven years. There is a safe harbour provision in the bill, though it puts the onus on the ISP to remove material; ISPs in Canada have so far resisted an order-and-takedown regime (CNM, April 19/02).Anyone operating an ISP without a licence would be subject to a fine not exceeding $100,000, and/or serving two years imprisonment. The full bill can be found here.ISPs and others have expressed concern that applying a levy to their caching activities could have a serious detrimental effect on the development of Internet services in Canada – something SOCAN has gone to great pains to dispute in its filing this month. In its response to the CCTA et al. leave to appeal application, SOCAN states in reference to earlier Copyright Board of Canada hearings: "The evidence before the Board was that it is not merely ‘possible’ to effect Internet communications without caching, but that such communications can and do take place routinely without cache servers as part of the everyday use of the Internet. That evidence was not contradicted by (CCTA and others). In fact, before the Board, the Applicants attempted to downplay the importance of cache servers by focusing on the fact that caching merely served to enhance ISP services and was not a common practice in Canada in any event. The Applicants have now done an about-face by filing new affidavits in support of their application to establish that caching is the lifeblood of the industry and an issue of national importance." SOCAN will likely draw fire from the ISP community for several statements it makes to back up this and other points, including several assertions that service providers exercise control over the type of content passing through their servers. It notes, for example, that "an ISP is able to program its cache server so that certain types of content are not received and copied." SOCAN also makes the broader claim that "ISPs (which own equipment) have the capacity to identify the source of Internet transmissions, including music transmission, and to block them off from their service." ISPs, through CAIP, have consistently stated that weeding out infringing material isn’t feasible given the massive volume of packets flowing through their gear at any given time. Besides the caching issue, SOCAN also takes issue with the CCTA et al. leave to appeal application on the grounds that an incorrect standard of review had been applied. While the Federal Court of Appeal had the option to give greater deference to the Copyright Board, SOCAN argues the court was right to overturn the board’s decision on the standard of correctness. SOCAN writes: "The Court of Appeal properly held that the Board’s determination of which Internet activities constitute the infringement of copyright…is not within the special expertise of the Board and should be reviewed on a standard of correctness. This follows because these same Internet activities may also be the subject of infringement proceedings in which a court would have to decide the scope of the provisions at issue. The decision of the Court of Appeal as to the standard of review is in accordance with recent authority and is clearly right." SOCAN has taken advantage of the CCTA, Bell and CAIP’s leave to appeal by filing to cross-appeal in the uncertain event that the Supreme Court decides to hear the case. The collective is again asking a court to decide whether ISPs that operate host servers communicate works to the public, and thus trigger liability. It was widely seen as a blow to the music industry when the lower court determined that ISPs were merely conduits, and not responsible for infringing content. SOCAN writes: "Notwithstanding reference to the appropriate balance, the Court of Appeal did not agree with SOCAN’s arguments and concluded that ISPs acting as host servers or as access providers were protected from copyright liability except in the limited circumstance where they operate cache servers. As a result, SOCAN is deprived of compensation for the substantial use of its works by ISPs in Internet transmissions except in relation to caching operations." It adds: "An ISP acting as access provider is not passive as to the transmission of the work; rather, it actively engages in the communication when it transmits the work to its subscriber in satisfaction of its contractual obligation. While the ISP may or may not have knowledge as to whether the content being transmitted is infringing, that is irrelevant for direct infringement." The matter is now in the hands of the Supreme Court, which will likely take months to make an announcement as to whether it will hear the case or not.

SOCAN fires back on Tariff 22 leave to appeal before Supreme Court

News | 10/30/2002 5:00 am EST

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