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Policy makers have long struggled to strike a fair balance in crafting rules to address allegations of copyright infringement on the internet. Copyright owners want the right to pursue damages and stop infringement, internet subscribers want their privacy and freedom of expression rights preserved in the face of unproven allegations, and internet providers want to maintain their neutrality by resolving the disputes expeditiously and inexpensively.

The Canadian system for online infringement was formally established in 2012 and came into effect in 2015. The “notice-and-notice” approach grants rights holders the ability to send notifications of alleged infringement to internet providers, which are required by law to forward the notices to the relevant subscriber and to preserve the data in the event of future legal action. The system does not prevent rights holders from pursuing additional legal remedies but internet providers cannot reveal the identity of their subscribers without a court order.

While the system has proven helpful in educating users on the boundaries of copyright, some rights holders have used it as a launching pad for further lawsuits. In fact, thousands of lawsuits have now been filed, with rights holders seeking to piggyback on the notice-and-notice system by obtaining the necessary subscriber information directly from internet providers at no further cost.

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The question of costs lies at the heart of an important Supreme Court of Canada copyright ruling released on Friday. Voltage Pictures LLC sought subscriber information from Rogers Communications Inc. for the purposes of pursuing individual lawsuits. When Rogers advised that it wanted compensation of $100 per hour for the costs associated with fulfilling the request, Voltage responded that internet providers could not pass along their costs since the notice-and-notice system already required them to identify subscribers and preserve the data without compensation.

The particular incident may have involved only a few hundred dollars, but the broader principle had the potential to dramatically alter the Canadian approach. If internet providers were required to disclose subscriber information without passing along the costs, Canadian courts faced the prospect of an avalanche of lawsuits and Internet providers might be dissuaded from carefully ensuring that the privacy of their subscribers was properly protected.

The Supreme Court understood the broader implications of the case, ruling that internet providers can pass along the specific costs associated with subscriber disclosures beyond those required for the notice-and-notice system. Indeed, the court recognized the importance of accurate data to safeguard against harmed reputations and wrongful lawsuits.

While the ruling rightly restores the notice system back to its intended approach, there is still more work to be done to ensure that the balance the government sought to achieve among rights holders, subscribers and Internet providers is maintained.

First, the Canadian approach recognizes that with great rights come great responsibilities for internet providers. For these guardians of highly sensitive personal information, including the browsing habits, social contacts and location data for millions of Canadians, disclosing subscriber information as part of a litigation process raises significant privacy issues.

The courts have determined that there may be situations where disclosure is appropriate, but doing so requires ensuring that the data are accurate and only revealed for specific, limited purposes. Friday’s ruling reinforces that internet providers will be compensated for the costs associated with meeting those obligations. It now falls to them to ensure they exercise care and caution for any subscriber disclosures.

Second, the government must ensure that the notice-and-notice remains in place, despite considerable pressure from the United States to change it as part of the North American free-trade agreement renegotiations. The U.S. would like Canada to adopt its notice-and-takedown system, which encourages the removal of content online without a court review or order. But that approach raises freedom of expression risks since it may raise instances of removing lawful content. The U.S. previously acknowledged during the Trans Pacific Partnership negotiations that the Canadian system provided an equivalent deterrent against online infringement. Despite renewed U.S. trade pressures, undoing the Canadian copyright balance should be taken off the table.

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Third, assuming that notice-and-notice survives the NAFTA renegotiations, Innovation, Science and Economic Development Minister Navdeep Bains should follow through with a prior commitment to fix the loopholes in the Canadian approach. The system was designed to educate Canadians and avoid expensive litigation, but in the Rogers case, hundreds of thousands of notices that include settlement demands and a steady stream of class-action claims filed against individuals suggest that the system needs tinkering.

The government previously indicated that long-overdue changes prohibiting the inclusion of settlement demands in notices would be forthcoming. Now that the Supreme Court has settled the question of costs, it falls to the government to complete the job of addressing the shortcomings of a system designed to fairly balance the rights of all stakeholders.

Michael Geist holds the Canada Research Chair in internet and E-commerce law at the University of Ottawa, Faculty of Law. He is an adviser to the Canadian Internet Policy and Public Interest Clinic, which was an intervenor in this case.

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