Sep06th

2012

September 6, 2012 @ 09:00:00
New Sections 27(2.3) and 27(2.4) of the Copyright Act - Good Or Bad?
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One of the apparent attempts to modernize the Copyright Act is the addition of new Sections 27(2.3) and 27(2.4). These section are designed to outlaw services that encourage piracy over the Internet. Usually, these provisions are referred to as anti-torrent and anti-file-sharing provisions.

Section 27(2.3) contains the general rule:

    ”It is an infringement of copyright for a person, by means of the Internet or another digital network, to provide a service primarily for the purpose of enabling acts of copyright infringement if an actual infringement of copyright occurs by means of the Internet or another digital network as a result of the use of that service.”

Unfortunately, the wording of the rule is not very clear as to the scope of its application.

Let’s break it down into pieces:

    – A person will be deemed to infringe copyright

    – if that person provides a service by means of the Internet

    – if such service is provided primarily for the purpose of enabling acts of copyright infringement

    – if an actual infringement of copyright occurs as a result of the use of that service.

What remains unclear is whether “an actual infringement of copyright” and “it is an infringement of copyright” must refer to the same copyright owner.

Here is an example.

What if a person provides a service primarily for the purpose of enabling acts of copyright infringement in respect of works of copyright owners A, B, and C. The works in respect of which the service is provided are respectively A1, A2, A3, B1, B2, B3, C1, C2 and C3.

What if there has only been “an actual infringement of copyright” in respect of the work B3?

Who can sue the service provider? Will it be only copyright owner B because it was his work in respect of which there was an actual infringement? Or can this also be A and C, because the service is provided for the purpose of enabling acts of copyright infringement and their works happen to be available through that service? Or can this also be D, Y and Z, simply because the service is provided for the purpose of enabling acts of copyright infringement?

If the universe of plaintiffs is limited to B, the next question is whether B can sue the service provider in respect of all works or only B3?

As I wrote in my comments on the new Section 27(2.2), there is no such thing as a copyright infringement in general, there must be a copyright owner whose copyright is being infringed.

There are two possible interpretations here:

    1. Section 27(2.3) sets out that in addition to the general rule that the copyright owner should sue the actual infringer, the copyright only can also sue the service provider, but only if that service provider has truly misbehaved by setting up a service primarily for the purpose of enabling acts of copyright infringement. In other words, if the service is not provided primarily for the purpose of enabling acts of copyright infringement, then the copyright owner cannot sue the service provider even with respect to the work that had actually been infringed via that service. However, if the service is provided for such a lowly purpose, then the copyright owner may, but only with respect to the work that had actually been infringed, also name the service provider as a defendant.

    2. Section 27(2.3) sets out that one actual infringement is merely a trigger that attracts general liability of the service provider to ANY copyright owner whose works may happen to be infringed via the service.

The second interpretation appears to be overly broad. Moreover, its usefulness would be questionable since copyright owners whose works have not been actually infringed would hardly have suffered any damages in the result of the provision of such services, and according to s. 38.1(1.1), statutory damages would be unavailable to such copyright owners.

On the other hand, the first interpretation doesn't really add any meaningful remedies to copyright's owners arsenal. In fact, it only narrows them down by defining what copyright owners would otherwise refer to as infringement of their exclusive right to “authorize” some of the acts that only the copyright owner has the right to do. Therefore, this provision does very little, if anything, to provide to copyright owners additional protection against services primarily designed to enable acts of copyright infringement.

Section 27(2.4) contains list of factors (presumably, non-exhaustive) that courts may consider in determining whether a service provider has infringed copyright. There are a total of 6 factors:

    1. whether the service provider marketed the service as one that could be used to enable acts of copyright infringement;

    2. whether the service provider had knowledge of a significant number of actual infringements;

    3. whether the service has significant non-infringing uses;

    4. whether the service provider can and does in fact act upon reported acts of copyright infringement;

    5. whether the service provider benefits from the copyright infringement;

    6. whether the service would be economically viable if no acts of infringement were carried out through it.

These factors will allow the courts to recreate a good picture of the service provider’s role in the copyright infringement.

The problem is that once the court recognizes that the service provider is up to no good, there aren’t many new tools that the copyright owner would have against such a service provider.

BOTTOM LINE: Essentially the new provisions clarify that if you have created a service that is primarily designed to enable acts of copyright infringement (for example, you have a torrents engine), then as long as end-users are using your service to infringe upon someone’s copyright, then your acts are deemed to be unlawful authorization and thus copyright infringement. Because of an attempt to use overly broad language (presumably, with a purpose to catch more infringements), the Parliament had to balance it with planting several restrictions that severely limit the value of the new sections.

Categories:Intellectual Property:Copyright
Additional Tags:New Copyright Act
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