Over the past several weeks I’ve been aware of the debate surrounding ISPs handing out costumer account info on copyright infringement. Media reports are full of “illegal downloaders” “you will get sued if you download” “ISPs ordered by courts to provide information on file shares.” Canadians are concerned and for the most part even those not effected by the copyright trolls or who don’t download feel violated. I know several businesses and consumers are writing to their ISPs on privacy concerns through this, and some ISPs have responded vowing to take their customers privacy seriously. This post explains some interesting developments I think everyone needs to be aware of.

The privacy implications currently being debated in court on the Teksavvy Vs Voltage case will have a tremendous impact on everyone’s online privacy rights, not just Teksavvy customers, and not just on downloaders, but businesses, consumers, politicians, everyone will be affected by this in one form or another. I can see why the CIPPIC involvement here is essential, but so is how we got here. That’s going to take some explaining.

So let’s try to unravel the pandora’s box so it makes some sense. For that lets start with what the actual law, the new copyright law states:

“38.1 (1) Subject to this section, a copyright owner may elect, at any time before final judgment is rendered, to recover, instead of damages and profits referred to in subsection 35(1), an award of statutory damages for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally, (a) in a sum of not less than $500 and not more than $20,000 that the court considers just, with respect to all infringements involved in the proceedings for each work or other subject-matter, if the infringements are for commercial purposes; and (b) in a sum of not less than $100 and not more than $5,000 that the court considers just, with respect to all infringements involved in the proceedings for all works or other subject-matter, if the infringements are for non-commercial purposes.”

There are 2 types of civil damages. Punitive; which means pay because you broke the law, and statutory meaning you pay a set penalty the if the plaintiff can prove financial harm. In Canada the judges are more likely to award damages more closer on what the actual harm has been to the plaintiff rather than award damages to punish people. In the US however punitive damage awards are offered up more. As one of my American family members put it “We sue everyone and everything because if you have a dispute this is how we settle it.” In Canada we settle things usually over beer, or a peace pipe and leave the courts out of it for the most part.

Now for the interesting twist to all of this. In copyright cases in the US, there has never been a case I am aware of, where actual economic harm has been determined. In 2010 the US accountability office couldn’t even come up with numbers on how piracy and online piracy is effecting the US economy if at all. In over a decade this has been studied and there is no conclusive evidence that economic harm has been created by a non-commercial infringement. There’s an economic reason for that. It’s called Creative Destruction, which is now widely excepted as fact when looking at the economic numbers from the media industry. I will have a later post after the Q 4 profits are announced, that will bring up some independent economic research to everyone’s attention, and further explain what Creative Destruction is, but short answer, there’s like a 0.1% chance of being held liable for non-commercial infringement in Canada due to the requirement of proving economic harm to obtain those penalties. Yes there are some that will starkly disagree, because they hold the “ideology” that downloading is bad or stealing, rather than looking at the economic facts which strongly do not support that way of thinking.

During the copyright consolations the Canadian Association of Internet Providers (CAIP) which represents several indie ISPs provided this statement on the importance of a notice to notice approach (it’s important to note Rogers, and Bell supported this approach as well) Jay Thomson from the CAIP stated this in the Toronto Round table in 2009:

“Notice-and-notice has always made more sense than any other proposed regime because it addresses the primary vehicle for on-line infringement, P-to-P file sharing. And it does so directly, efficiently, and proportionately while respecting due process. It does not take much to imagine how a parent will react when he or she receives a notice advising them that activity by a family member — dare I say a teenaged son or daughter — has exposed the family to possible and very expensive legal action.”

To an extent, the notice to notice approach would facilitate an ideological form of copyright trolling so it’s not surprising knowing this, that this would be exploited somehow by rights holders. Now it’s worthy to note the notice to notice approach is not in place in law right now, however other than the legalization of non-commercial infringement, or the flip side getting your internet cut off for infringing, trolling is their only option under the new legislation and the balanced approach many experts fought for and was agreed upon by Government and your ISPs.

Now that we understand why we are in this position, as the pandora’s box opens even more, things are becoming much worse than some kid downloading a movie, or tune and that is that ISPs are currently not challenging the court orders on subscriber information to ensure due process they fought on consumers behalf to get in the consultations. This is creating an environment where your right to privacy is basically being thrown out the window on copyright infringement accusations. And the reason why, because it costs ISPs money to ensure due process is respected.

Teksavvy went as far as to say they can’t get involved in defending due process because the new copyright laws say they have to remain neutral. In fact nowhere in the new copyright legislation does it mention ISPs, service providers, neutral or safe harbor. It was however supported in the copyright consultations that, ISPs should be exempt from copyright infringement liability simply because they act as intermediaries. Basically under notice to notice, this would mean all they had to do was to pass the information from a plaintiff off to their consumers to be exempt from copyright damages. Safe Harbor was the term coined to that policy. To my understanding, safe harbor provisions do not and would not exempt an ISP in ensuring due process prior to handing out requests for account information from plaintiffs assuming these provisions currently exist in the first place.

To explain further; It’s businesses that assume any and all legal risk when it comes to their consumers privacy. If a motion to obtain account information is not opposed in court, it sends the message to the judge that the business agrees with the legal merits of the request. Judge’s very rarely look at the merits of the request unless the businesses oppose that requests, because businesses assume the legal risk if that request is found to be without merit at a later date. All ISPs thus far over the past few weeks have not opposed the legal merits of the request coming from rights holders. This is how consumers information is being handed to the copyright owners. However one party has, which in my mind brought up questions and serious concerns as to why ISPs are not opposing the legal merits of these requests thus ensuring due process.

The CIPPIC has an excellent submission to the court on its intent to intervene calling into question the evidence submitted, the intent of the Hollywood studio to bring these cases to trial. Remember no economic evidence exists to prove economic harm to even be qualified for the statutory damages in the first place. I will have more on this in a later post. The CIPPIC goes then into a description of copyright trolling. So why haven’t ISPs taken this stance in opposing motions for a court order for account information? Remember defending due process costs money, in this case it might be big money. Here’s what’s at stake:

There are several rules that a court looks at when a motion for information is opposed. One of them is Federal Court Rule 238. Basically judges weigh whats in the public interest, the case going forward or the right to privacy which is what Voltage is trying to get to happen. Think of it as the scale of justice. Whichever holds more weight, wins. And excellent discussion on this can be found here, and the differences between what happened in 2004 to what’s going on now. The last paragraph is concerning. It states:

“Even though these types of lawsuits started off on the wrong foot in 2004, there appears to be a current upswing in their popularity, both in the US and now in Canada. The results of these preliminary cases will determine the legal landscape for equitable discovery of Internet infringement cases in the future. Since it is almost certain that the goal is to obtain names and addresses of the individual infringers and then settle with them, the results of these very earlier cases will be absolutely determinative of individual privacy rights on the Internet.”

This has Supreme Court written all over it, with consumers screwed on both sides of this. Civil liberties, privacy and consumer advocates are now left to pick up the pieces because ISPs won’t. The sad part is, this is all over an ideological argument that doesn’t even have enough evidence behind it to even have a successful day in court, and that those advocating for the notice to notice approach somehow want to social engineer Canadians into thinking it has? Non-commercial infringement should have been legalized, and I’m sorry ladies and gents, will be down the road and after these attempts of copyright trolling are dealt with, that might just happen.

But one thing I’m certain is going to happen, when the copyright lobby loses they always get a severe ass kicking on the way out. SOPA is just one example. They will lose here because we’ve already had the “individual privacy rights on the internet” debate on a national scale around lawful access exactly one year ago. It is incomprehensible that Canadians would find it acceptable to give those rights up over a copyright infringement accusation, when we won’t even let government near that information. The public interest is on internet privacy, it’s too bad ISPs don’t see this past their own self interests, and politicians can’t see past their own pocket books. Settle in folks, it’s going to be a while before this is dealt with. In the mean time, know what your rights are and get ready to fight.

*Part 2 of this post can be found here