The longstanding debate over how Internet providers should respond to allegations of copyright infringement by their subscribers was resolved in Canada several years ago with the adoption of a “notice and notice” system. Unlike countries that require content takedowns without court oversight or even contemplate cutting off subscriber Internet access, the Canadian approach, which has operated informally for over a decade but will kick in as the law in 2015, seeks to balance the interests of copyright holders, the privacy rights of Internet users, and the legal obligations of Internet providers.

The result is a system that has proven effective in raising public awareness about copyright, while safeguarding the identities of Internet subscribers, providing legal certainty to Internet providers, and leaving potential legal actions to the courts.

Under the notice-and-notice system, copyright owners are entitled to send infringement notices to Internet providers, who are legally required to forward the notifications to their subscribers. The notices must include details on the sender, the copyright works and the alleged infringement. If the Internet provider fails to forward the notification, it must explain why or face the prospect of damages that run as high as $10,000. Internet providers must also retain information on the subscriber for six months (or 12 months if court proceedings are launched).

For Internet providers, the system creates significant costs for processing and forwarding notices. However, assuming they meet their obligations of forwarding the notice, the law grants them a legal “safe harbour” that removes potential liability for actions of their subscribers.

There are important benefits for Internet users as well. First, unlike the content takedown or access cut-off systems, the Canadian notice approach does not feature any legal penalties. The notices do not create any fines or damages, but rather are designed as educational tools to raise awareness of infringement allegations.

Second, the personal information of subscribers is not disclosed to the copyright owner. When the Internet provider forwards the copyright notice, only they know the identity of the subscriber and that information is not disclosed to any third party.

If the copyright owner is unhappy with only sending a notification and wants to proceed with further legal action, they must go to court to obtain an order requiring the Internet provider to reveal the identity of the subscriber. Canadian courts have established strict rules and limitations around such disclosures.

Moreover, the law now also limits potential liability for Internet users for non-commercial infringement, capping damages at C$5,000 for all infringements. While that is not insignificant, it does mean that threats of tens of thousands of dollars in liability for unauthorized downloading are unfounded.

The Canadian notice-and-notice system takes official effect on January 2nd, but it has been used on an informal basis for many years. Indeed, the evidence has consistently demonstrated that notifications work. For example, Rogers told a House of Commons committee in 2011 that 67 per cent of notice recipients do not repeat infringe after one notice and 89 per cent cease allegedly infringing activity after a second notice.

Those numbers are very similar to 2010 data from the Entertainment Software Association of Canada, which found that 71 per cent of notice recipients did not place an infringing file back on BitTorrent systems. Similarly, the Business Software Association told the CBC in 2006 that the notice-and-notice approach has “been most effective.”

So are there reasons for concern with the new system?

There are fears that Internet providers will be inundated with notices, particularly since the government decided against establishing a fee for forwarding them. That could lead to increased costs for consumers. Moreover, the government also declined to specify the precise content of the notices, leading to concerns that some copyright holders may include threats to sue alongside dubious demands to settle the allegations for thousands of dollars.

Should these concerns materialize, the government will need to revisit some of the notice-and-notice regulations. In the meantime, however, it rightly points to the system as a “made-in-Canada” solution that is likely to be emulated by countries around the world.