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General peer-to-peer (P2P) file-sharing systems have been ubiquitous throughout the Internet since the mid-1990s. While such systems were made famous -- or infamous -- by the likes of Napster, the common thread with those systems was the general architecture. P2P systems consist of a distributed network architecture that requires participants to make a portion of their computer system resources, such as processing power, disk storage or network bandwidth, directly available to other network participants without the need for a central server or host to oversee the exchange.

In the P2P system, peer participants are both the suppliers and consumers of resources. This model stands in stark contrast to the traditional client-server model wherein the server supplies and the clients consume.

The BitTorrent Protocol

The BitTorrent protocol was designed by Bram Cohen in 2001. While it is considered a form of P2P architecture, BitTorrent does have some significant differences.

First, a user adopts the position of host and makes a file available to the network. This initial file is called a "seed" and once it is available on the network, other users called "peers" or "leeches" may connect to the seed and commence file transfer.

Second, as the file proliferates within the network, the peers become seeds, and each file request may be satisfied by different seeds.

Further, each file that is requested is segmented so that individual segments can be requested and received from different seeds, thereby reducing the strain on the initial seed computer. Essentially, this design permits the overall file transfer task to be networked across the distributed system.

BitTorrent Legal Issues

From a European perspective, there is no question that BitTorrent systems are facing significant hurdles. Recently, the two most popular ranked BitTorrent sites were ordered to shut down. The Pirate Bay was ordered to shut down following a decision by a Swedish court in April, due to copyright infringement. However, the site appears to be up and running as of this writing.

Similarly, Mininova was ordered by a Dutch court in August to remove all infringing torrents within three months. Mininova recently complied with the court order and disabled all torrents except those in the licensed "content distribution" part of the service.

Canada-Piracy Haven

With all of the legal pressures against the first- and second-ranked BitTorrent sites, "Canada has earned a dubious distinction as a world hub for illegitimate file-sharing websites and a leader in Internet piracy," according to Globeandmail.com's Barry McKenna.

Further, Canada is in the "embarrassing position of harbouring 5 of the top 8 remaining unauthorized BitTorrent sites including the new number 1 ranked site, Isohunt," wrote technology attorney Barry Sookman.

Isohunt was founded in Vancouver by Gary Fung. Isohunt is not just popular in terms of BitTorrent sites, with as many as 100 million unique visitors going to the site every year; Isohunt also ranks among the 200 most popular Web sites of any kind on the planet.

Earlier this year, the Obama administration put Canada on its blacklist of shame -- a "priority watch list" of intellectual property laggards including the likes of China, Russia and Venezuela.

Canada has repeatedly vowed to put a framework in place to combat this unfettered piracy, but it has not happened as yet, and Canada finds itself not "just out of step with the United States, but with much of the Western world," wrote McKenna.

BitTorrent Legality in Canada

In terms of what manner the framework reform should take, there are some serious interpretive issues that should be addressed. While the initial seeder and subsequent downloader or leech of the copyrighted file may already be subject to Canadian copyright infringement, this may not be the case for the underlying BitTorrent site itself.

Since the actual BitTorrent site does not contain any copyrighted material, nor does it reproduce or distribute any of the copyrighted works, the BitTorrent site itself may not be deemed to constitute an infringing activity and thus may remain ultra vires to Canadian copyright law.

Further, if the BitTorrent site does not actively promote the infringement of copyrighted material, it may not be deemed, under Canadian copyright law, to induce copyright infringement.

The Canadian government recently completed a national consultation in an attempt to amend the Canadian Copyright Act. Critics, however, are dubious as to whether any amendments will actually be made to the number of previous failed attempts.

Without such an amendment or a binding legal decision addressing these specific issues, Canada may find itself on the intellectual property blacklist of shame for quite some time to come.

Javad Heydary, a columnist for the E-Commerce Times, is chairman and managing director of Heydary Hamilton. His business law practice focuses on commercial transactions, e-commerce and franchising law. Heydary is also managing editor of Laws of .Com, a biweekly publication covering legal developments in e-commerce.