Caching Techniques of Internet Service Providers Considered to be Activities Infringing on Copyrights

2002-01-01

CACHINGTECHNIQUESOFINTERNETSERVICEPROVIDERSCONSIDEREDTOBE
ACTIVITIESINFRINGINGONCOPYRIGHTS

MarcelNaud*
LEGERROBICRICHARD,Lawyers,
ROBIC,Patent&TrademarkAgents
CentreCDPCapital
1001Square-Victoria-BlocE–8
thFloor
Montreal,Quebec,CanadaH2Z2B7
Tel.:(514)9876242-Fax:(514)8457874
info@robic.com–www.robic.ca

CASEREPORT–Canada-SocietyofComposers,AuthorsandMusicPublishers
ofCanadav.CanadianAssociationofInternetProviders,2002FCA166
BACKGROUND
Contrarytocertainjurisdictions,suchasAustralia,theEuropeanUnion,Japan
andtheUnitedStates,Canadahasnotyetenactedspecificlegislationto
shieldInternetintermediariesfromcopyrightliability,unlesstheydonottake
appropriateactionwhentheyarenotifiedoftheexistenceofinfringing
material.
Asaresult,inthecourseofaprocessmeanttodetermineallocation(PhaseI)
andamount(PhaseII)ofroyaltypayabletocopyrightownersfor
communicationofmusicalworksontheInternet,theCanadianCopyright
Board(the”Board”)issuedadecisioninwhichitnotablystatedthatroyalty
couldnotbeimposedonthosewhoseonlyroleinInternettransmissionsisto
operateaserveronwhichmusicalworksarestoredortoprovidearecipient
withInternetaccess,becausetheactivitiesoftheseintermediariesdidnot
constitutea”communication”ofworkstothepublicwithinthemeaningofthe
CanadianCopyrightAct(the”Act”).
TheSocietyofComposers,AuthorsandMusicPublishersofCanada
(“SOCAN”),whichadministerstheperformingandcommunicationrightsforits
members,thenappliedtoCanadianFederalCourtofAppeal(the”Court”)for
ajudicialreviewtosetasidethisdecision.

©LEGERROBICRICHARD,2002.*LawyerwiththelawfirmLEGERROBICRICHARD,g.p.andwiththepatentandtrademark
agencyfirmROBIC,g.p.Publication274.07.

ISSUESANDFINDINGS
Theproceedingraisesthefollowingquestions:
1.Dointermediaries’activitiesfallentirelywithinthescopeofparagraph
2.4(1)(b)oftheAct,whichprovidesthat”apersonwhoseonlyactinrespect
ofthecommunicationofawork[…]tothepublicconsistsofprovidingthe
meansoftelecommunicationnecessaryforanotherpersontoso
communicatethework[…]doesnotcommunicatethatwork[…]tothe
public.”,soastoconcludethatintermediaries’activitiesdonoconstitute
communicationofworks?
Withrespecttothisfirstquestion,giventhewordingofparagraph2.4(1)(b)of
theAct,theCourtstatedthatinordertoestablishthatInternetintermediaries’
activitiesdonotconstitutecommunication,itshouldbefoundthat:
(i)Internetintermediaries’activitiesamounttotheprovisionof”means”of
telecommunication;
(ii)themeansmustbe”necessary”forenablinganotherpersonto
communicateaworktothepublic;and
(iii)activitiesmustbeintermediaries'”onlyact”withrespecttothe
communication.
Regardingthefirstelement,theCourtdisagreedwithSOCAN’ssubmissionthat
theword”means”shouldcompriseonlypurelypassivephysicalfacilities,since
legislationshouldbeconstruedinawaythattakesintoaccount
technologicaldevelopments,totheextentpermittedbyitslanguageand
rationale.Intheparticularcase,theword”means”mayalsocomprise
providers’otherequipmentandservices.Interestingly,theCourtconsidered
relevantthefactthatapersonlacksthepracticalabilitytocontroland
monitorcontentforthedeterminationofwhethersuchpersonisonly
providingthe”means”toenableotherstocommunicatecontent(asopposed
tocommunicatingcontenthimself).
Regardingthesecondelement,theCourtfoundthatthe”means”towhich
paragraph2.4.(1)(b)refersare”necessary”totheextentthatwithoutthose
means,communicationwouldnotbepracticableorwouldprobablynot
haveoccurred.However,oneofthejudgesexpressedadissentonthatpoint,
statingthatitissettingthebartoohightoinsistthatsomethingisnecessaryfor
acommunicationonlyifitissomethingwithoutwhichthecommunication
wouldprobablynotoccur.EventhoughInternetcommunicationispossible
withoutcaching,thedissentingjudgewasoftheopinionthattheideaof
whatisnecessaryfortechnologyofcommunicationshouldalsoinclude
incrementalimprovementssuchascaching.

IntheCourt’sview,theoperatorofacachecommunicatesby
telecommunicationtoendusersthematerialthatistransmittedtothemfrom
thecache,andtherebyinfringestheexclusiverightofauthorsandcomposers
tocommunicatetheirworkstothepublic.Consequently,suchoperatormight
havetopayroyalty.Itisworthnotingthat,indrawingthisconclusion,the
Courttookintoconsiderationthefactthatparagraph2.4(1)(b)reducesthe
rangeofpotentialsourcesfromwhomauthorsandcomposerscanrecovera
royaltyforunauthorizedcommunicationoftheirworks.
Regardingthethirdelement,theCourtheldthatwhenanInternet
intermediaryisoperatingacache,itsactsarenot”only”consistingof
providingthenecessarymeansforotherstocommunicateawork,giventhat
italreadyfoundthatoperatingacacheistocommunicatethematerialit
contains.Thissufficestoputthecache’soperatoroutsidetheprotectionof
theActinrespectofthatparticularcommunication.
2.IforwhenInternetintermediaries’activitiesdonotconstitute
communication,areInternetintermediariesnonethelessrequiredtopaya
royaltybecausethey”authorize”thecommunicationofmusicalworks
transmittedontheInternet?
Withrespecttothissecondquestion,theCourtdistinguishedthesituationof
Internetaccessprovidersandhostserversoperators.
–InthecaseofInternetaccessproviders,theCourt,relyingonevidence
thatitwasnotfeasibleforthemtomonitorandcontrolinasystematic
waythecontenttransmittedtotheirsubscribers,heldthatitwas
openedtotheBoardtoconcludethattheywerenotauthorizing
contentproviders,withwhichtheytypicallyhavenocontractual
relationship,tocommunicatematerialtotheirsubscribers.
–Inthecaseofhostserversoperators,theCourtheldthat,evenifthey
haveacontractualrelationshipwithcontentproviders,theywerenotin
apositiontoexercisecontrolovertheuseoftheirequipmenttoa
degreesufficienttofindthattheyimplicitlyauthorizecontentproviders
tocommunicatethematerialstored,sincetheyonlyprovidethe
passivemeansforotherstocommunicatethematerial.However,
implicitauthorizationcouldbeinferredinsomecircumstances,suchas
thefailuretoremoveinfringingmaterialafterbeingnotifiedofits
existence.

3.WhenmaterialrequestedbyanInternetuserinCanadaisstoredona
serveroutsideCanada,canitbesaidthatcommunicationoccurredonlyat
theserver’slocation,thuscreatingnobreachofcopyrightinCanadaand
preventingtheBoardfromimposingaroyaltyonthecontentprovider?
Withrespecttothisthirdquestion,theCourt,foundthattheverynotionof
communicationrequiresacommunicator(thecontentprovider)andan
intendedrecipient(theenduser);inotherwords,inthecaseoftheInternet
communicationsunderconsideration,therecanbenocommunication
withoutarequesteffectedbyanenduser.TheCourtalsostatedthat,
contrarytotheBoard’sviewbasedonanacaseconcerningtelevision
broadcasting,thelocationoftheInternetcommunicationsunder
considerationshouldnotbedeterminedsolelybythatofthehostserver.
AccordingtotheCourt,thetestthatwouldbethemostconsistentwiththe
policyoftheActwouldbetoaskthequestionwhetheragiven
communicationbytelecommunicationhasarealandsubstantialconnection
withCanada.Ifitdoes,thenaroyaltymaybepayableinCanadainrespect
ofsuchcommunication.Forinstance,thetestwouldbemetwhenboththe
contentproviderandtheenduserareinCanada,evenifthehostserveris
notinCanada.However,theCourtrecognizedthat,inabsenceofany
agreedmechanismbetweencountriesforcollectionofroyalties,anytest
adoptedinonecountrymaypotentiallyleadtotheimpositionofeither
doubleroyaltiesornoroyalty.
RELEVANCE
Theissuesdiscussedinthisdecisionhaveanundeniablepublicimportanceas
theyseektoestablishthemannerinwhichcopyrightprinciplesadoptedata
timewhereInternetcommunicationswerenotcontemplatedwouldapplyto
anewandincreasinglypopularwaytocommunicateworksprotectedby
copyright.
Thegreatestrelevanceofthisdecisionprobablyliesinitsanalysisofcaching,
whichisnowconsideredbytheCourtasacommunicationofworks.Thismay
createanincentiveforInternetintermediariestolessenoreliminatetheir
relianceoncachingtechniquestoimproveefficiencyofInternet
communications,whichinturnmayimpactontheevolutionoftheInternet’s
networkarchitecture.
TheprovidersofInternetsearchengine,directoryandcachingservicesmay
betheoneswhoarethemostexposedtoeventualpaymentofroyaltyto
copyrightownerssince,accordingtotheCourt,bycachingorproviding

directhyperlinkstoworksavailableontheInternet,theyarenotonlyproviding
thenecessarymeansoftelecommunicationnecessaryforanotherto
communicateworks,buttheyarealsocommunicatingsuchworks
themselves.Tothatextent,theycannotbenefitfromtheexclusionthat
paragraph2.4(1)(b)oftheActprovides.
SCOPE
ItwillbeinterestingtoseehowtheBoardwilldealwiththefactthatitmay
takeintoconsiderationthecachingactivitiesofInternetintermediarieswhen
fixingthequantumofroyaltypayableinPhaseIIoftheassessmentprocess,
andhowitwilldosogiventhepracticaldifficultiesthatitraises.
Sinceitisclearthatapersonwhopostsmusicalworksonaserverthereby
authorizesitscommunication,andcommunicatesitwhen,inresponseto
requestsfromendusers,itistransmittedfromthehostserver,theCanadian
governmentisconsideringaspecialtaxondevicesplayingmusicalworksin
digitalformataswellasonblankCDsandminidisks.Thisisanobviousattempt
tomakecontentprovidersandendusersindirectlypayroyaltytoacertain
extent,evenifitmaypenalizeenduserswhoareusingplayersandstoragein
compliancewiththeActorforotherlegitimatepurposes,aswellas
manufacturerswhoareembeddingfeaturesintheirproductstoprevent
contentprovidersandenduserstomakeunauthorizedreproductionsor
communicationofmusicalworks.
Also,eventhoughonemayconsiderthatthedecisionwillonlyinfluence
PhaseIIoftheprocessinitiatedtodetermineroyaltypayabletocopyright
ownersforcommunicationofmusicalworksontheInternet,thefindingscould
potentiallybeappliedtoothertypesofworks,includingliterary,artisticand
cinematographicworks.
However,theCourtseemedtorelytoasignificantextentonthefactthat
Internetintermediariescannotcurrentlycontrolormonitorinasystematicway
thecontenttransmittedbycontentproviderstoholdthattheywerenot
communicatingorauthorizingthoseproviderstocommunicateinfringing
material.Itwillthenbeinterestingtoseehowthisreasoningwillapplyinthe
future,asthedegreeofcontrolandmonitoringthatcouldbeexercisedwill
likelyincreasewiththedevelopmentofdigitalrightmanagementsystems.
CONCLUSION

Initsreasoning,theCourtacknowledgedtheneedtoavoidinterpretingthe
ActinawaythatwouldobstructimprovementsinthequalityofInternet
communication,orreductionsinthepriceatwhichdatacanbemade
available.However,byrulingthatcachingtechniquesofInternetservice
providersdonotfallwithinthemeans”necessary”forotherstocommunicate,
itappearsthatitmanagedtoachieveexactlytheoppositeresult.

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