Is File-Sharing Legal in Canada? (Part 4)
Please see (Part 1, Part 2, and Part 3)
Part 3 ended with the trial judge explaining that copying music was ok, since we Canadians have to pay a tax on blank CDs that is supposed to be distributed to labels to mitigate the monetary loss made possible by the public’s God-given right to do what they want with what they buy. In addition, putting my tunes in shared folder, does not constitute a crime, because I am not giving you my Metallica, you are simply moving it to your device (which is not taxed, BTW).
Since this all appears to be legal, that does not justify ordering the ISPs to snitch on their clients. Therefore, the labels can’t sue us directly… yet.
The labels appeal…
Several months later in July 2004, the CIRA appealed the decision. Justice Edgar Sexton reviewed the case and the Federal Court of Appeal handed down its unanimous decision on May 19, 2005. The Appellant Judge dismissed the appeal, but “having regard to what must be considered as divided success on this appeal, there will be no order as to costs.” (Sexton, 2005 par. 56)
The dismissal was considered a divided success in that the judge upheld the Motion Judge’s decision to deny the court order to the CIRA, but disagreed with the ruling that the Copyright Act explicitly deemed that file sharing was legal. It also provided a methodology for the CIRA to utilize in future action against file sharers.
In the matter of the test for discovery, the Motions Judge claimed that the plaintiff required a prima facie case against the alleged infringers whereas the Appellant Judge found that they needed to provide a bona fide claim. The difference is in the burden of proof. The Appellant Judge cited Ontario Court of Appeal in Straka v. Humber River Regional Hospital (2000), 51 O.R. (3d) 1 (O.C.A) and The Prince Edward Island Court of Appeal in Re Johnston and Frank Johnston’s Restaurants Limited, [1980] P.E.I.J. No. 34. In those cases, the plaintiffs needed to show that they only wanted to know the identities of the alleged offenders for the reasons of suing those involved and not for any other reason. In this case, the CRIA only need show “that they really do intend to bring an action for infringement of copyright based upon the information they obtain, and that there is no other improper purpose for seeking the identity of these persons.” (Sexton, par. 34)
Sexton also cited Norwich Pharmacal Co. v. Customs and Excise Commissioners, [1974] A.C. 133 agreeing with Finckenstein that is was similar. He disagreed however, with the Motion Judge’s articulation of the test established by the 1974 case in that it was, in his opinion, a bona fide claim and not a prima facie case.
The Motions Judge Finckenstein had found the CIRA to be in an impossible situation. By arguing that they had a prima facie case, the CIRA had painted themselves into a corner at least for this round. The Appellant Judge said that it makes “little sense to require proof of a prima facie case at the stage of the present proceeding. The plaintiffs do not know the identity of the persons they wish to sue, let alone the details of precisely what was done by each of them such as to actually prove infringement. Such facts would only be established after examination for discovery and trial.” (Sexton, par. 34) If council for BMG et al had argued that there was no requirement to produce a prima facie case, they may have obtained disclosure.
Sexton was obliged to dismiss the appeal but expressed disapproval of the Motion Judge’s impetuous statements regarding infringement. This case was the first to test the legality of file sharing based upon the Copyright Act. The Appeals Judge found that the Motion Judge did not consider whether all the requirements for personal use had been met. If the music is transferred and stored on an “audio recording medium”, it is considered personal use, which is legal, though the media itself is taxable. The question is then, is a computer’s hard drive an “audio recording medium”? According to the Private Copying Amendment, hard drives are not and therefore the private copying defense was unavailable in this case. It is of interest to note though, that downloading directly to recordable CD or other “audio recording medium” would seem be legal at this point.
Justice Sexton continued by saying the private copying section of the Copyright Act is not the only applicable one in this case. With regard to distribution, the Motions Judge found that placing the files on to a shared folder did not constitute a positive act. He found that there was no evidence that the user had knowledge that the files would be downloaded illegally and was therefore not infringing, as in the case of the library. The Appellant Judge found that there was nothing in the copyright act that required a positive act. In this case of placing the files in the shared folder, the user “should have known” that he could be infringing and according to the Copyright Act constituted infringement. (Sexton, par. 52 & 53) The Motion Judges statements regarding section 80 of the Copyright Act was also questioned. Although subsection 80(1) seems to allow for downloading, subsection 80(2), which Finckenstein seemingly ignored, states that it will be considered infringement if the material is copied for the purpose of “communicating to the public by telecommunications”. (Sexton, par. 49)
Stay tuned next post for the stunning conclusion!!
