Rogers Communications Inc. v. Voltage Pictures, LLC

Rogers Communications Inc. v. Voltage Pictures, LLC
Collection
Supreme Court Judgments
Date
2018-09-14
Neutral citation
2018 SCC 38
Report
[2018] 2 SCR 643
Case number
37679
Judges
Wagner, Richard; Abella, Rosalie Silberman; Moldaver, Michael J.; Karakatsanis, Andromache; Gascon, Clément; Côté, Suzanne; Brown, Russell; Rowe, Malcolm; Martin, Sheilah
On appeal from
Federal Court of Appeal
Notes
Case in Brief
SCC Case Information
Decision Content
SUPREME COURT OF CANADA
Citation: Rogers Communications Inc. v. Voltage Pictures, LLC, 2018 SCC 38, [2018] 2 S.C.R. 643
Appeal Heard: April 26, 2018 Judgment Rendered: September 14, 2018 Docket: 37679
Between:
Rogers Communications Inc.
Appellant
and
Voltage Pictures, LLC, Cobbler Nevada, LLC, PTG Nevada, LLC, Clear Skies Nevada, LLC, Glacier Entertainment S.A.R.L. of Luxemburg, Glacier Films 1, LLC and Fathers & Daughters Nevada, LLC
Respondents
- and -
Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic, Bell Canada Inc., Canadian Network Operators Consortium Inc., Cogeco Inc., Quebecor Media Inc., Saskatchewan Telecommunications Holding Corporation, Shaw Communications Inc., TekSavvy Solutions Inc., TELUS Communications Inc. and Xplornet Communications Inc.
Interveners
Coram: Wagner C.J. and Abella, Moldaver, Karakatsanis, Gascon, Côté, Brown, Rowe and Martin JJ.
Reasons for Judgment: (paras. 1 to 59)
Brown J. (Wagner C.J. and Abella, Moldaver, Karakatsanis, Gascon, Rowe and Martin JJ. concurring)
Concurring Reasons: (paras. 60 to 75)
Côté J.
Rogers Communications Inc. v. Voltage Pictures, LLC, 2018 SCC 38, [2018] 2 S.C.R. 643
Rogers Communications Inc. Appellant
v.
Voltage Pictures, LLC,
Cobbler Nevada, LLC,
PTG Nevada, LLC,
Clear Skies Nevada, LLC,
Glacier Entertainment S.A.R.L. of Luxemburg,
Glacier Films 1, LLC and
Fathers & Daughters Nevada, LLC Respondents
and
Samuelson‑Glushko Canadian Internet Policy and
Public Interest Clinic, Bell Canada Inc.,
Canadian Network Operators Consortium Inc.,
Cogeco Inc., Quebecor Media Inc.,
Saskatchewan Telecommunications Holding Corporation,
Shaw Communications Inc., TekSavvy Solutions Inc.,
TELUS Communications Inc. and Xplornet Communications Inc. Interveners
Indexed as: Rogers Communications Inc. v. Voltage Pictures, LLC
2018 SCC 38
File No.: 37679.
2018: April 26; 2018: September 14.
Present: Wagner C.J. and Abella, Moldaver, Karakatsanis, Gascon, Côté, Brown, Rowe and Martin JJ.
on appeal from the federal court of appeal
Intellectual property — Copyright — Infringement — Norwich order — Costs of compliance — Copyright owners obtaining Norwich order compelling Internet service provider to disclose identity of person suspected of infringing owners’ copyright — Owners seeking not to pay costs of disclosure based on provision in statutory notice and notice copyright regime prohibiting Internet service provider from seeking costs for complying with obligations under regime — Whether steps taken by Internet service provider to comply with Norwich order overlap with its statutory obligations — Whether overlap, if any, impacts Internet service provider’s ability to recover reasonable costs of compliance with Norwich order — Copyright Act, R.S.C. 1985, c. C‑42, ss. 41.25 , 41.26 .
The respondents are film production companies that allege that their copyrights have been infringed online by unidentified Internet subscribers who have shared their films using peer to peer file sharing networks. They sued one such unknown person and brought a motion for a Norwich order to compel his Internet service provider (“ISP”), Rogers, to disclose his contact and personal information. The respondents sought that the disclosure order be made without fees or disbursements payable to Rogers, relying on ss. 41.25 and 41.26 of the Copyright Act . These provisions, referred to as the “notice and notice” regime, require that an ISP, upon receiving notice from a copyright owner that a person at a certain IP address has infringed the owner’s copyright, forward that notice of claimed infringement to the person to whom the IP address was assigned. They also prohibit ISPs from charging a fee for complying with their obligations under the regime.
The motion judge granted the Norwich order and allowed Rogers to recover the costs of all steps that were necessary to comply with it. He found that while the statutory notice and notice regime regulates the process by which notice of claimed copyright infringement is provided to an ISP and an Internet subscriber, as well as the retention of records relating to that notice, it does not regulate an ISP’s disclosure of a subscriber’s identity to a copyright owner. The Federal Court of Appeal agreed with the motion judge that the statutory notice and notice regime does not regulate the disclosure of a person’s identity from an ISP’s records, but it confined Rogers’ recovery to the costs of complying with the Norwich order that did not overlap with the steps that formed part of Rogers’ implicit obligations under the statutory regime. Rogers appealed.
Held: The appeal should be allowed and the matter remitted to the motion judge to determine the quantum of Rogers’ entitlement to its reasonable costs of compliance with the Norwich order.
Per Wagner C.J. and Abella, Moldaver, Karakatsanis, Gascon, Brown, Rowe and Martin JJ.: An ISP can recover its costs of compliance with a Norwich order, but it is not entitled to be compensated for every cost that it incurs in complying with such an order. Recoverable costs must be reasonable and must arise from compliance with the Norwich order. Where costs should have been borne by an ISP in performing its statutory obligations under the notice and notice regime, these costs cannot be characterized as either reasonable or as arising from compliance with a Norwich order, and cannot be recovered.
The notice and notice regime was enacted to serve two complementary purposes: to deter online copyright infringement and to balance the rights of interested parties including copyright owners, Internet users and Internet intermediaries such as ISPs. It was not intended to embody a comprehensive framework by which instances of online infringement could be eliminated altogether, and it does not go so far as requiring an ISP to disclose the identity of a person who has received notice to a copyright owner. Therefore, an owner who wishes to sue a person alleged to have infringed copyright online must proceed outside the notice and notice regime and obtain a Norwich order to compel the ISP to disclose that person’s identity. The statutory notice and notice regime has not displaced this requirement, but operates in tandem with it.
Similarly, the notice and notice regime has not displaced the copyright owner’s burden, at common law, of bearing the ISP’s reasonable costs of compliance with the Norwich order. However, the statutory regime prohibits an ISP from charging a fee for performing any of its obligations arising under the regime. Accordingly, an ISP should not be permitted to recover the cost of carrying out any of the obligations, express or implicit, that will have arisen under the regime, even if it carries out the obligations only after having been served with a Norwich order. Otherwise, the distribution of financial burden which Parliament decided upon would be undermined by imposing upon copyright owners an obligation which was specifically allocated to ISPs in the notice and notice regime.
The three express obligations contained in ss. 41.26(1) (a) and 41.26(1) (b) of the Copyright Act carry with them several implicit obligations that an ISP must satisfy under the notice and notice regime. Since these implicit obligations are steps which are necessary to see that those express statutory obligations are discharged, an ISP will not be permitted to recover costs at the stage of complying with a Norwich order. Specifically, s. 41.26(1)(a) requires an ISP to determine, for the purpose of forwarding notice electronically, the person to whom the IP address belonged. It also requires an ISP to take whatever steps that are necessary to verify that it has done so accurately. Similarly, the records that an ISP must retain under s. 41.26(1) (b) must be accurate. Any steps which are necessary to verify the accuracy of those records therefore form part of an ISP’s obligations.
However, there is a distinction between an ISP’s obligation under the notice and notice regime to ensure the accuracy of its records that allow the identity of the person to whom an IP address belonged to be determined, and an ISP’s obligation under a Norwich order to actually identify a person from its records. While the records an ISP must retain under s. 41.26(1)(b) must be kept in a form and manner that allows an ISP to identify the name and address of the person to whom notice is forwarded under s. 41.26(1)(a), s. 41.26(1)(b) does not require that they be kept in a form and manner which would permit a copyright owner or a court to do so. The copyright owner would, however, be entitled to receive that information from an ISP under the terms of a Norwich order — which process falls outside the ISP’s obligations under the notice and notice regime. As such, an ISP is entitled to the reasonable costs of steps that are necessary to discern a person’s identity from the accurate records retained under s. 41.26(1)(b).
Given the statutory prohibition on the recovery of costs arising from the notice and notice regime, motion judges should carefully review an ISP’s evidence when assessing costs of compliance with a Norwich order, to determine whether an ISP’s proposed fee is reasonable, in light of its obligations under the notice and notice regime. In the instant case, Rogers is entitled to its reasonable costs of compliance with the Norwich order. However, the motion judge failed to interpret the full scope of an ISP’s obligations under s. 41.26(1) and failed to consider whether any of the eight steps in Rogers’ manual process to disclose the identity of one of its subscribers overlap with Rogers’ statutory obligations for which it was not entitled to reimbursement. Since it is impossible on the record to determine Rogers’ reasonable costs of compliance, the matter should be returned to the motion judge.
Per Côté J.: There is agreement with the majority that the appeal should be allowed. However, there is disagreement with the proposition that any implied obligations in s. 41.26(1) of the Copyright Act categorically preclude an ISP from verifying aspects of its records at the time that a Norwich order is received and then seeking compensation for that work.
Taken together, s. 41.26(1) (a) and (b) make clear that an ISP need not actually determine the identity of an alleged infringer. Thus, any work required to determine an alleged infringer’s identity and to disclose that identity pursuant to a Norwich order is not subsumed within the notice and notice regime and can therefore be subject to compensation in accordance with the common law. The common law Norwich regime permits an ISP to be compensated for reasonable costs of compliance.
None of the eight steps that Rogers undertakes in response to a Norwich order is supplanted by the notice and notice regime, since they do not involve verifying the accuracy of records which it was required by s. 41.26(1) to retain. Rather, Rogers follows this process in order to determine and verify the identity of an alleged copyright infringer (which it does not already know) based on those records. Assuming that this eight‑step process is otherwise reasonable, Rogers is thus entitled to full compensation for the steps it takes to identify an account holder and to disclose that information to a copyright claimant.
There is also disagreement with the proposition that any implied obligations in s. 41.26(1) of the Copyright Act categorically preclude an ISP from verifying aspects of its records at the time that a Norwich order is received and then seeking compensation for that work, for two reasons. First, customer information can change over time, and a Norwich order may be received well after the notice of infringement is first sent to the account holder. The accuracy of that information must still be verified at the time the account holder’s identity is requested by the copyright holder, since it is the account holder’s current identifying information that a claimant must obtain in order to initiate a legal proceeding for copyright infringement, not the identifying information as it may have existed when the notice was first sent. Second, it is possible that not all infringement notices are sent to the correct account holder in accordance with s. 41.26(1) (a). Therefore, and even if some steps in Rogers’ Norwich process could be characterized as verifying pre‑existing information or records, there is no irresistible clearness in the Copyright Act to justify displacing a sensible approach as to what is reasonable on the basis of a purported implied obligation in s. 41.26(1) . In these circumstances, there may be good justifications for Rogers to conduct more vigorous verifications. That said, judges are empowered to deny the costs of verifications by an ISP that are unnecessarily extensive or duplicative.
In the case at bar, the motion judge did not make an independent finding as to the reasonableness of Rogers’ eight‑step process. Accordingly, this matter should be remitted for such a determination.
Cases Cited
By Brown J.
Referred to: Norwich Pharmacal Co. v. Customs and Excise Commissioners, [1974] A.C. 133; Glaxo Wellcome PLC v. M.N.R., [1998] 4 F.C. 439; Alberta (Treasury Branches) v. Leahy, 2000 ABQB 575, 270 A.R. 1, aff’d 2002 ABCA 101, 303 A.R. 63; BMG Canada Inc. v. John Doe, 2005 FCA 193, [2005] 4 F.C.R. 81; BMG Canada Inc. v. John Doe, 2004 FC 488, [2004] 3 F.C.R. 241; Voltage Pictures LLC v. John Doe, 2015 FC 1364; Voltage Pictures LLC v. John Doe, 2014 FC 161, [2015] 2 F.C.R. 540; Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27; Canadian Pacific Air Lines Ltd. v. Canadian Air Line Pilots Assn., [1993] 3 S.C.R. 724; Voltage Pictures LLC v. John Doe, 2011 FC 1024, 395 F.T.R. 315; Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324, 2003 SCC 42, [2003] 2 S.C.R. 157; Goodyear Tire & Rubber Co. of Canada v. T. Eaton Co., [1956] S.C.R. 610; Canada (Attorney General) v. Thouin, 2017 SCC 46, [2017] 2 S.C.R. 184; Cartier International AG v. British Telecommunications plc, [2018] UKSC 28, [2018] 1 W.L.R. 3259.
By Côté J.
Referred to: Canada (Attorney General) v. Thouin, 2017 SCC 46, [2017] 2 S.C.R. 184; Norwich Pharmacal Co. v. Customs and Excise Commissioners, [1974] A.C. 133; Glaxo Wellcome PLC v. M.N.R., [1998] 4 F.C. 439; Parry Sound (District) Social Services Administration Board v. O.P.S.E.U., Local 324, 2003 SCC 42, [2003] 2 S.C.R. 157.
Statutes and Regulations Cited
Copyright Act, R.S.C. 1985, c. C‑42, ss. 27(2.3) , 31.1 , Part IV, 41.25, 41.26.
Copyright Modernization Act, S.C. 2012, c. 20 , summary, preamble.
Digital Millennium Copyright Act (1998), 17 U.S.C. § 512.
Order Fixing the Day that is Six Months after the Day on which this Order is published as the Day on which Certain Provisions of the Copyright Act Come into Force, SI/2014‑58, and Explanatory Note, Canada Gazette, Part II, vol. 148, No. 14, July 2, 2014, pp. 2121‑23.
Authors Cited
Canada. House of Commons. House of Commons Debates, vol. 146, No. 31, 1st Sess., 41st Parl., October 18, 2011, pp. 2107, 2109.
Canada. House of Commons. Legislative Committee on Bill C‑32. Evidence, No. 19, 3rd Sess., 40th Parl., March 22, 2011, pp. 1, 10.
Canada. Office of Consumer Affairs. Notice and Notice Regime (online: https://ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02920.html; archived version: https://www.scc-csc.ca/cso-dce/2018SCC-CSC38_1_eng.pdf).
Electronic Frontier Foundation. Comments of Electronic Frontier Foundation before the U.S. Copyright Office, Library of Congress, In the Matter of Section 512 Study, submitted by Corynne McSherry and Kit Walsh, April 1, 2016 (online: https://www.eff.org/document/eff-512-study-comments; archived version: https://www.scc-csc.ca/cso-dce/2018SCC-CSC38_2_eng.pdf).
Oxford English Dictionary, 2nd ed. Oxford: Clarendon Press, 1989, “retain”.
Seltzer, Wendy. “Free Speech Unmoored in Copyright’s Safe Harbor: Chilling Effects of the DMCA on the First Amendment” (2010), 24 Harv. J.L. & Tech. 171.
Sullivan, Ruth. Sullivan on the Construction of Statutes, 6th ed. Markham, Ont.: LexisNexis, 2014.
Urban, Jennifer M., Joe Karaganis and Brianna L. Schofield. Notice and Takedown in Everyday Practice, March 2017 (online: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2755628; archived version: https://www.scc-csc.ca/cso-dce/2018SCC-CSC38_3_eng.pdf).
APPEAL from a judgment of the Federal Court of Appeal (Stratas, Gleason and Woods JJ.A.), 2017 FCA 97, 146 C.P.R. (4th) 339, 410 D.L.R. (4th) 602, [2017] F.C.J. No. 477 (QL), 2017 CarswellNat 2130 (WL Can.), setting aside the order of Boswell J., 2016 FC 881, 141 C.P.R. (4th) 136, [2016] F.C.J. No. 901 (QL), 2016 CarswellNat 3745 (WL Can.). Appeal allowed.
Andrew Bernstein, James Gotowiec and Nic Wall, for the appellant.
Kenneth Clark, Patrick Copeland and Paul McCallen, for the respondents.
Jeremy de Beer and Bram Abramson, for the intervener the Samuelson‑Glushko Canadian Internet Policy and Public Interest Clinic.
Gerald Kerr‑Wilson, Ariel Thomas and Christopher Ferguson, for the interveners Bell Canada Inc., Canadian Network Operators Consortium Inc., Cogeco Inc., Quebecor Media Inc., Saskatchewan Telecommunications Holding Corporation, Shaw Communications Inc., TekSavvy Solutions Inc., TELUS Communications Inc. and Xplornet Communications Inc.
The judgment of Wagner C.J. and Abella, Moldaver, Karakatsanis, Gascon, Brown, Rowe and Martin JJ. was delivered by
Brown J. —
I. Introduction
[1] Online infringement of copyright has become commonplace. Using peer to peer file sharing networks, Internet subscribers can download copyrighted content such as films and music, while simultaneously uploading that content for download by others who are thereby able to do the same. Through this concurrent downloading and uploading, peer to peer networks facilitate the rapid sharing of copyrighted content with multiple Internet subscribers simultaneously. And, due to the anonymity of the Internet, the identity of Internet subscribers who participate in this illegal sharing of copyrighted content is concealed from copyright owners.
[2] In 2009, the Government of Canada launched a consultation on copyright modernization to address the issue of online copyright infringement. It heard both from copyright owners who demanded a way to discourage online copyright infringement, and consumers who requested a method to determine if they, or someone using their Internet Protocol (“IP”) address, could be infringing copyright.
[3] Parliament responded to both sets of concerns by enacting the “notice and notice” regime contained within ss. 41.25 and 41.26 of the Copyright Act, R.S.C. 1985, c. C-42 — which regime was brought into force on January 2, 2015. Now, when a copyright owner gives notice to an Internet service provider (“ISP”) claiming that a person at a certain IP address has infringed the owner’s copyright, the ISP must forward that notice of claimed infringement to the person to whom the IP address (being “the electronic location identified by the location data specified in the notice” (s. 41.26(1) (a)) was assigned. While this regime is intended to deter the continued infringement of copyright online, it only goes so far. In particular, it does not require an ISP to disclose the identity of a person who has received notice to a copyright owner. For a copyright owner to obtain that person’s identity, the owner must proceed outside the regime — specifically, by obtaining a Norwich order compelling the ISP to disclose it (see Norwich Pharmacal Co. v. Customs and Excise Commissioners, [1974] A.C. 133 (H.L.)).
[4] This appeal requires this Court to consider who bears the ISP’s “reasonable costs of compliance” with such a Norwich order. At common law, that burden rests with the copyright owner. In enacting the notice and notice regime, however, Parliament prohibited ISPs from charging a fee for complying with their obligations under the regime (except, as I shall explain, where the Minister has fixed a maximum fee by regulation, which has not occurred to date). This leaves open the question of whether, if any of the steps taken by an ISP to comply with a Norwich order overlap with an ISP’s obligations under the notice and notice regime, the ISP can recover the costs of such duplicative steps as part of its reasonable costs of compliance with the Norwich order.
II. Overview of Facts and Proceedings
A. Background
[5] The respondents to this appeal (collectively “Voltage”) are film production companies that allege that their copyrights have been infringed online. Specifically, Voltage says that thousands of Internet subscribers whom it cannot identify have, in contravention of the Act, shared its films over the Internet using peer to peer file sharing networks. Voltage sued one such unknown person, “John Doe”, alleging breach of copyright in relation to the concurrent downloading and uploading of a number of films on various dates. Ultimately, Voltage says, it intends to have its action against John Doe certified as a so-called “reverse” class action against approximately 55,000 persons whose identities are currently unknown but who Voltage says have similarly infringed its copyright. To this end, Voltage brought a motion for a Norwich order compelling John Doe’s ISP, Rogers Communications Inc., to disclose “any and all [of John Doe’s] contact and personal information” (A.R., at p. 48). Voltage also sought that the disclosure order be made with “no fees or disbursements payable” to Rogers “pursuant to [ss. 41.25 and 41.26 of the Act]” (A.R., at pp. 48-49).
[6] Sections 41.25 and 41.26 of the Act describe the provision of notice of a claimed copyright infringement as occurring in two steps. First, a copyright owner must send a notice of a claimed infringement to an ISP such as Rogers. This step is prescribed by s. 41.25 :
Notice of claimed infringement
41.25 (1) An owner of the copyright in a work or other subject-matter may send a notice of claimed infringement to a person who provides
(a) the means, in the course of providing services related to the operation of the Internet or another digital network, of telecommunication through which the electronic location that is the subject of the claim of infringement is connected to the Internet or another digital network;
(b) for the purpose set out in subsection 31.1(4), the digital memory that is used for the electronic location to which the claim of infringement relates; or
(c) an information location tool as defined in subsection 41.27(5).
Form and content of notice
(2) A notice of claimed infringement shall be in writing in the form, if any, prescribed by regulation and shall
(a) state the claimant’s name and address and any other particulars prescribed by regulation that enable communication with the claimant;
(b) identify the work or other subject-matter to which the claimed infringement relates;
(c) state the claimant’s interest or right with respect to the copyright in the work or other subject-matter;
(d) specify the location data for the electronic location to which the claimed infringement relates;
(e) specify the infringement that is claimed;
(f) specify the date and time of the commission of the claimed infringement; and
(g) contain any other information that may be prescribed by regulation.
Secondly, the ISP must, upon receiving the copyright owner’s notice of claimed infringement, “forward the notice electronically to the person to whom the electronic location [in this case, an IP address] identified” in the notice belongs. This second step is prescribed by s. 41.26(1) , which imposes upon the ISP certain obligations, the scope of which are central to deciding this appeal:
Obligations related to notice
41.26 (1) A person described in paragraph 41.25(1)(a) or (b) who receives a notice of claimed infringement that complies with subsection 41.25(2) shall, on being paid any fee that the person has lawfully charged for doing so,
(a) as soon as feasible forward the notice electronically to the person to whom the electronic location identified by the location data specified in the notice belongs and inform the claimant of its forwarding or, if applicable, of the reason why it was not possible to forward it; and
(b) retain records that will allow the identity of the person to whom the electronic location belongs to be determined, and do so for six months beginning on the day on which the notice of claimed infringement is received or, if the claimant commences proceedings relating to the claimed infringement and so notifies the person before the end of those six months, for one year after the day on which the person receives the notice of claimed infringement.
[7] Section 41.26(2) of the Act addresses whether an ISP may charge a fee for complying with these obligations:
Fees related to notices
(2) The Minister may, by regulation, fix the maximum fee that a person may charge for performing his or her obligations under subsection (1). If no maximum is fixed by regulation, the person may not charge any amount under that subsection.
To date, the Minister has not fixed a maximum fee. By operation of s. 41.26(2), therefore, no fee may be charged by an ISP for complying with its obligations under s. 41.26(1) .
[8] Hence the issue to be decided: Could the scope of Rogers’ obligations as an ISP under s. 41.26(1)
(1) overlap entirely with the steps which Rogers may be required to take under Voltage’s Norwich order (and, if so, may Rogers still charge a fee for its reasonable costs of compliance with the Norwich order)?
(2) not overlap with those steps (in which case Rogers would be entitled to its reasonable costs of compliance with the order)? Or,
(3) overlap in part with those steps (and, if so, to what extent may Rogers still charge a fee for the reasonable costs of compliance with such overlapping steps)?
As I explain below, on this point the courts below diverged. While the motion judge’s reasons are not entirely clear, he appeared to assume that the second view was correct since ss. 41.25 and 41.26 did not in his view oust “established law and principles with respect to [Norwich] orders” (para. 12). He therefore allowed Rogers to recover the costs of all steps it said were necessary to comply with the Norwich order. The Federal Court of Appeal’s interpretation would, however, have confined Rogers’ recovery to the reasonable costs of the actual act of disclosure when complying with a Norwich order. The court saw the rest of Rogers’ claimed costs as unrecoverable, since they overlapped with the steps that formed part of Rogers’ implicit obligations under the statutory regime.
B. Judicial History
(1) Federal Court, 2016 FC 881, 141 C.P.R. (4th) 136 — Boswell J.
[9] As already recounted, Voltage sought a Norwich order compelling Rogers to disclose the identity of “any and all contact and personal information” of John Doe with “no fees or disbursements payable” to Rogers pursuant to ss. 41.25 and 41.26 of the Act. At the hearing of the motion, Rogers took no position on whether Voltage was entitled to the Norwich order. It maintained, however, that if the order were granted, Rogers should be entitled to recover from Voltage its reasonable costs of compliance with that order (which Rogers calculated at a rate of $100 per hour plus HST).
[10] The motion judge granted the order but, considering the privacy interests that surround the disclosure of an Internet subscriber’s identity, he ordered that Rogers disclose only John Doe’s “name and address as recorded in Rogers’ records” (para. 17). The motion judge then considered, and accepted, Rogers’ argument that it was entitled to compliance costs. He reasoned that, while the statutory notice and notice regime regulates the process by which notice of a claimed copyright infringement is provided to both an ISP and an Internet subscriber, and while it also regulates the retention of records relating to that notice, the regime does not regulate an ISP’s disclosure of a subscriber’s identity to a copyright owner. Obtaining such disclosure requires an owner to obtain a Norwich order. And, at common law, the ISP is entitled to recover its reasonable costs of compliance.
[11] Turning to what Rogers had actually claimed — the hourly fee of $100 plus HST — the motion judge found that “[t]he fee is what it is”, and held that Voltage was required to pay it prior to obtaining disclosure of John Doe’s name and address (para. 21). He further found that Rogers’ compliance with the order should take no more than an hour, estimating that Voltage would be required to reimburse Rogers approximately $113 (inclusive of HST). He also ordered that Rogers was entitled to the costs of the motion, which he fixed at $500.
(2) Federal Court of Appeal, 2017 FCA 97, 146 C.P.R. (4th) 339 — Stratas J.A., Gleason and Woods JJ.A. Concurring
[12] The Federal Court of Appeal allowed Voltage’s appeal. The outcome of the appeal turned on the interpretation of the statutory notice and notice regime. The court found that the purpose of the regime was “to reduce the complications and answer many of the questions that can arise when a Norwich order is sought” (para. 21), and to “protec[t] and vindicat[e] the rights of copyright owners” (para. 22). The regime must therefore be interpreted so as “to allow copyright owners to protect and vindicate their rights as quickly, easily and efficiently as possible while ensuring fair treatment of all” (para. 27).
[13] The Federal Court of Appeal identified various obligations in s. 41.26(1) — both express and implicit — which an ISP must satisfy under the regime. First, s. 41.26(1)(a) expressly requires an ISP to forward notice of a claimed copyright infringement to the person to whom the electronic location specified in the notice belongs. An implicit corollary to this obligation, and to the overall purposes of the regime, however, is a set of obligations requiring the ISP to “maintai[n] its records in a manner and form that allow it to identify suspected infringers quickly and efficiently”; “searc[h] for and . . . locat[e] the relevant records”; “analyz[e] the records to satisfy itself that it has identified the suspected infringers accurately”; and undertake verification “to the extent the [ISP] must conduct verification activities to ensure accuracy” (C.A. reasons, at paras. 34-35).
[14] Secondly, s. 41.26(1)(a) expressly requires an ISP to notify the copyright owner that the notice has been forwarded or explain why it could not do so.
[15] An ISP’s third express obligation, described in s. 41.26(1)(b), requires it to “retain records” that “will allow the identity of the person to whom the electronic location belongs to be determined”. The Federal Court of Appeal found that the “records” are those which an ISP has used to identify a person under s. 41.26(1)(a) for the purposes of forwarding notice. It further found that such records must be maintained in a manner and form that is useable by “those who will use the records” (para. 37), being copyright owners and courts, to identify the person who received notice. To the extent that the records are not in such a form, an ISP is required to “translat[e] or modif[y]” the records into a useable form as part of its s. 41.26(1)(b) obligations (C.A. reasons, at para. 39).
[16] The Federal Court of Appeal agreed with the motion judge that the absence of a regulation prescribing a maximum fee precludes Rogers from charging a fee for discharging its statutory obligations. It also agreed that the statutory notice and notice regime does not regulate the disclosure of a person’s identity from an ISP’s records. From this, it follows that a copyright owner seeking to have an ISP disclose a person’s identity must obtain a Norwich order, and an ISP can charge a fee for the “actual, reasonable and necessary costs associated with the act of disclosure” (C.A. reasons, at para. 61). Once, however, an ISP performs its statutory obligations without compensation under the notice and notice regime, the act of disclosure itself is a simple matter: “All that is left is the delivery or electronic transmission of these records by the [ISP] to the copyright owner and the [ISP’s] participation in the obtaining of a disclosure order from the Court” (C.A. reasons, at para. 62). The associated costs are, therefore, likely to be negligible.
[17] The Federal Court of Appeal found that Rogers appeared to have satisfied its obligations under the notice and notice regime but, in response to Voltage’s request for disclosure, had “re-d[one] some of its work . . . in order to verify its earlier work and ensure accuracy” (para. 67). Rogers’ fee of $100 per hour was “based mainly on the cost of this additional work” (para. 67). The motion judge had therefore erred by allowing Rogers to charge for work that it was already required to perform under the notice and notice regime. He also erred by failing to assess the reasonableness of Rogers’ fee, instead simply concluding that “[t]he fee is what it is”. The court set aside the motion judge’s order that Rogers reimburse Voltage at a rate of $100 per hour plus HST and, finding insufficient evidence on the record to determine Rogers’ actual, reasonable and necessary costs of compliance, concluded that Rogers was not entitled to any reimbursement. On the basis that costs must follow the event, the Federal Court of Appeal set aside the motion judge’s award of legal costs, and instead ordered Rogers itself to pay Voltage’s costs on appeal and in the Federal Court.
III. Analysis
A. Introduction
[18] Originally cast as an equitable bill of discovery (Norwich; Glaxo Wellcome PLC v. M.N.R., [1998] 4 F.C. 439 (C.A.)), a Norwich order is a type of pre-trial discovery which, inter alia, allows a rights holder to identify wrongdoers (Alberta (Treasury Branches) v. Leahy, 2000 ABQB 575, 270 A.R. 1, at para. 59, aff’d 2002 ABCA 101, 303 A.R. 63). The elements of the test for obtaining a Norwich order (although sometimes described as “factors” to be considered (Leahy (Q.B.), at para. 106)), are not in dispute before us. A copyright owner must show:
(a) [a bona fide claim] against the unknown alleged wrongdoer;
(b) the person from whom discovery is sought must be in some way involved in the matter under dispute, he must be more than an innocent bystander;
(c) the person from whom discovery is sought must be the only practical source of information available to the applicants;
(d) the person from whom discovery is sought must be reasonably compensated for his expenses arising out of compliance with the discovery order in addition to his legal costs;
(e) the public interests in favour of disclosure must outweigh the legitimate privacy concerns. [Emphasis added.]
(See BMG Canada Inc. v. John Doe, 2005 FCA 193, [2005] 4 F.C.R. 81, at paras. 15 and 32, quoting BMG Canada Inc. v. John Doe, 2004 FC 488, [2004] 3 F.C.R. 241, at para. 13; Voltage Pictures LLC v. John Doe, 2015 FC 1364, at para. 37 (CanLII); see also Voltage Pictures LLC v. John Doe, 2014 FC 161, [2015] 2 F.C.R. 540, at para. 45.)
[19] Both Rogers and Voltage agree that the statutory notice and notice regime has not displaced the necessity of a copyright owner obtaining a Norwich order in order to compel an ISP to disclose the identity of a person who is alleged to have committed an infringement of copyright. Again, this appeal concerns the relationship between the steps necessary to comply with that statutory regime and the steps necessary to comply with a Norwich order, and the implications of that relationship for an ISP’s ability to recover the costs of complying with a Norwich order.
B. Interpretation of the Notice and Notice Regime
[20] Statutory interpretation entails discerning Parliament’s intent by examining, in this case, the words of ss. 41.25 and 41.26 in their entire context and in their grammatical and ordinary sense, in harmony with the Act’s scheme and objects (Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27).
(1) The Scheme of the Act
[21] The Act states the rights of copyright owners, the conduct that infringes those rights, and the civil and criminal remedies that may be sought or enforced where those rights are infringed. Part IV of the Act, entitled “Remedies”, also describes the procedures to be followed where a copyright owner alleges an infringement and seeks to enforce its rights under the Act. One such set of procedures is contained in the notice and notice provisions described in ss. 41.25 and 41.26 .
(2) The Act’s Objects
[22] The notice and notice regime was enacted as part of the Copyright Modernization Act, S.C. 2012, c. 20 , to serve two complementary purposes: (1) to deter online copyright infringement; and (2) to balance the rights of interested parties.
[23] That first purpose — deterrence — is evident in the preamble to the Copyright Modernization Act , which states that the “Government of Canada is committed to enhancing the protection of copyright works or other subject-matter”. This purpose is echoed in the summary of the Copyright Modernization Act , which states that the Act is amended to “update the rights and protections of copyright owners to better address the challenges and opportunities of the Internet”. The consultation letter from the Government of Canada which invited stakeholders to make submissions on the form and content of notice also similarly stated that the notice and notice regime’s “primary goal is to deter infringement” (A.R., at p. 74). More particularly, by requiring notice of a claimed infringement to be forwarded to the person who was associated with the IP address that is alleged to have infringed copyright, the regime is aimed at deterring that person, or others who are using the IP address, from continuing to infringe copyright (see Canada, Office of Consumer Affairs, Notice and Notice Regime (online)).
[24] The notice and notice regime was not, however, intended to embody a comprehensive framework by which instances of online copyright infringement could be eliminated altogether. As a representative of Rogers explained before the House of Commons committee considering what would become of the Copyright Modernization Act , “notice and notice is not a silver bullet; it’s just the first step in a process by which rights holders can go after those they allege are infringing. . . . Then the rights holder can use that when they decide to take that alleged infringer to court” (House of Commons, Legislative Committee on Bill C-32, Evidence, No. 19, 3rd Sess., 40th Parl., March 22, 2011, at p. 10). This is why, as I have explained, a copyright owner who wishes to sue a person alleged to have infringed copyright online must obtain a Norwich order to compel the ISP to disclose that person’s identity. The statutory notice and notice regime has not displaced this requirement, but operates in tandem with it. This is affirmed by s. 41.26(1) (b), which contemplates that a copyright owner may sue a person who receives notice under the regime, and fixes the ISP’s obligation to retain records which allow that person’s identity to be determined for a period of time after such notice is received.
[25] The second purpose of ss. 41.25 and 41.26 is “to balance the interests of all stakeholders in the copyright regime” (House of Commons Debates, vol. 146, No. 31, 1st Sess., 41st Parl., October 18, 2011, at p. 2107 (emphasis added)). This involves not only balancing the rights of copyright owners and Internet users who may infringe thos