Notice-and-notice effect on piracy unclear ahead of copyright review

As the federal government gears up to review the Copyright Act later this year, information about the rate of piracy in Canada remains elusive, two full years since the implementation of the notice-and-notice regime to combat copyright infringement. The Wire Report reached out to experts to see whether the regime has had a tangible effect on piracy rates in Canada ahead of the review, but few could provide a way to measure the notice system's effectiveness. “The Department of Canadian Heritage does not specifically track digital piracy rates,” spokesman Tim Warmington said in an email. He added that since the notice regime came into force, both Heritage and Innovation, Science and Economic Development Canada “have monitored its implementation through regular calls with implicated stakeholders, including and rights holder representatives.” The Copyright Act review is expected to begin at the end of year, after November, he added. Jay Kerr-Wilson, a copyright lawyer with Toronto-based Fasken Martineau DuMoulin LLP, said in an email that he is “not aware of any attempts to measure the impact of the on … incidents of online infringement.” “There aren’t really any reliable statistics to compare piracy traffic from year to year,” Ernesto Van Der Sar, founder and editor-in-chief of TorrentFreak, a website that reports on news in the file sharing space, said in an email (Van Der Sar runs the website under a pseudonym). Despite this, a United States consortium representing industry groups called the International Intellectual Property Alliance (IIPA) sent a letter to a U.S. representative last month suggesting that Canada is a “safe haven” for online piracy and proclaiming its notice system, implemented in January 2015, to be “ineffective.” The claim was based on its own report, called Special 301. The group asked the administration of president Donald Trump to put pressure on Canada to crack down on piracy. But the Canadian government has brushed off the reports in the past. In a May 2016 briefing note prepared for Heritage Minister Mélanie Joly, Canada’s Copyright and International Trade policy branch blasted the 2016 version of the Special 301 as “invalid and analytically flawed because the process relies on U.S. industry allegation rather than empirical evidence and objective analysis.” In response to a question about how the government can measure the effectiveness of the notice-and-notice system without tracking piracy rates, Heritage spokeswoman Catherine Gagnaire said in an email that “because the notice and notice system is one of several tools that, together, are intended to address the issue of online copyright infringement, the relationship between digital piracy rates and the effectiveness of the notice and notice system is complex, and not directly nor exclusively linked.” The notice-and-notice system that has drawn the ire of the group requires Internet service providers to notify subscribers if they are being accused of copyright infringing activity. In contrast, the more proactive notice and takedown system in the U.S. requires the removal of the infringing material upon notice of it by the rights holder. Barry Logan, managing director of anti-piracy company Canadian Intellectual Property Rights Enforcement (Canipre), said in a phone interview that the rate of copyright infringement has been “consistent” since the notice regime was implemented, though he did not respond to requests asking for data to support that claim. But David Fewer, director of the Canadian Internet Policy and Public Interest Clinic (CIPPIC), said in an email that, “immediately upon its start, the notice and notice system had a dramatic impact on infringement.” He pointed to statistics produced only several months after the notice regime was implemented when United States-based Internet Security Task Force (ISTF) issued a press release urging the United States to adopt a similar system to Canada’s because the U.S. notice and takedown regime was not working. The statistics were provided by Internet security outfit CEG TEK International, which showed Canada’s largest Internet service providers were reporting decreases as high as 70 per cent in infringing activity. CEG TEK did not respond to a request for comment for this story, while the ISTF also didn’t respond to requests for comment on whether piracy has continued to see a decline or if they still hold the same view on the notice-and-notice regime. During that time, there have been two higher-profile copyright infringement cases in the Canadian courts, both involving Voltage Pictures LLC, a Canipre client. Voltage is currently awaiting a certification hearing in Federal Court in June for a reverse class action case that potentially involves as many as 55,000 alleged copyright infringers. This follows a previous case dating back to 2012 in which Voltage went to court and sought to reveal the names of Teksavvy Solutions Inc. subscribers, who allegedly downloaded its movies illegally. The court ordered Teksavvy to hand over the names and addresses of nearly 2,000 subscribers and set the final costs that Voltage was required to pay to get that information at around $33,000 in total. In a February email, Teksavvy lawyer Bram Abramson said Voltage has yet to pay for the information and has therefore not gone after the subscribers named. Experts the Wire Report spoke to said they couldn’t recall other cases in which a court made a copyright infingement decision against individuals, which they noted is partly because much of the litigation is often settled out of court. A Wire Report search of Canadian court decisions didn’t find any other similar piracy cases in the system since notice-and-notice was implemented. Representatives for both Rogers Communications Inc. and BCE Inc. said via email that they do not disclose the number of notices they send out. However, Bell spokeswoman Jacqueline Michelis said the “continuing volume of such requests suggests notice-and-notice may not be enough to protect the creative community against piracy and that other legal options may be necessary.” Prior to the notice-and-notice government mandate, some companies voluntarily implemented the regime. At a 2011 Parliamentary legislative committee discussing amendments to the Copyright Act, MP Marc Garneau requested data from the companies to back up whether the system was effective. Pam Dinsmore, Rogers’ then vice-president of regulatory cable, said it processed over 200,000 notice requests in 2010 and estimated that about a third of the those subscribers would not receive a second notice after getting a first. While the “regime is not perfect, we believe it does result in discouraging repeat offenders,” she said. Telus Corp., for its part, said at the time that it had “no business reason to retain that data,” but had anecdotal stories of a parent telling a child not to infringe after the household received a first notice. Telus did not respond to a request for comment for this story. Fewer said he doesn’t anticipate the government getting into copyright policy in a significant way because it would rather do so “in the context of a negotiated trade deal where Canada obtains off-setting benefits," though Logan said he expects the notice regime to be strengthened after the review. Others said the review should tackle the issue of how the notices are worded, an issue that has been identified as a concern since the regime was implemented. Kerr-Wilson said that rights-holders have used it to, in a sense, “extort” money from subscribers by including links in the notices to where subscribers can settle for thousands of dollars and have misrepresented penalties under Canadian law. Fewer agreed that “no one foresaw that the system would be co-opted by copyright trolls in the way that it has," adding a “proscribed form of notices would go a long way towards restoring some sense of credibility in the system.” Meghan Sali, a communications specialist at Internet advocacy group OpenMedia, said in a phone interview the government could institute a template system for notices to clarify what’s allowed. That would include information on remedies and the legal status of the claim. As for potential remedies to keep people away from infringing activities, Fewer said CIPPIC has long advocated that “efficient, competitive online content services,” such as Bell’s CraveTV and Netflix Inc.’s streaming service, are the “best remedy to online infringement.” “Online infringement has been going down steadily for years now as content distributors finally have started to provide consumers with what they want in a convenient and affordable format,” he said. In a January 2016 letter to shareholders noting it had crossed 75 million subscribers, Netflix, citing data by broadband equipment maker Sandvine Corp., said its share of North American Internet traffic grew to 37 per cent in 2015, compared to three per cent for BitTorrent. Netflix’ share has since shrunk. “This growth is coming at the expense of piracy,” the letter added. Sali echoed that view, stating that “the people in our community are really happy with the legal services, like Netflix and .” “We’ve actually seen revenues from the music industry increase … all while piracy is at an all-time low,” she added. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Notice-and-notice effect on piracy unclear ahead of copyright review

Broadcast | March 13, 2017

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Notice-and-notice effect on piracy unclear ahead of copyright review

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