Let me first say a few words about the case itself and the U.S. legal environment. YouTube is being sued for direct and indirect copyright infringement. Viacom alleges that YouTube directly reproduces, performs and distributes its copyright-protected content. It also alleges that YouTube is secondarily liable for users’ infringements on three grounds: contributory, vicarious and inducing copyright infringement.
If no settlement is reached, the outcome of this case will depend mainly on the application of the DMCA’s safe harbour system. Under
§ 512 a firm hosting allegedly infringing material at the direction of its user is not liable for infringement if it complies with ‘notice-and-takedown’ procedures. But to get immunity, the host can’t know about the infringement or even be aware of circumstances from which infringement is apparent. Moreover, the host can’t receive financial benefits directly from the infringement in a situation where it has the right and ability to control its user’s activity. Now, there’s a lot of debate about what all that means, and little precedent to go on.
So opinion is pretty much divided on YouTube’s prospects for a successful defense in the States. I’d say the situation is even more uncertain in Canada. I’ll even go out on a limb to predict (without opining or advising) that YouTube would lose a Canadian lawsuit like this. Here’s how things might play out north of the border.
In Canada, firms’ potential liabilities are determined by different principles than in the US. There are, however, some similarities.
Canadian copyright law, like US law, grants exclusive reproduction and performance/communication rights for audio, visual and audio-visual content. It isn’t perfectly clear how other aspects of the Canadian Copyright Act might apply here, including provisions pertaining to distribution rights, adaptation rights, synchronization rights and so on. But it is safe to say that in both jurisdictions there are a number of different grounds on which a case for direct infringement could be made.
The distinction between fair use in the US and fair dealing in Canada isn’t particularly relevant to direct infringement, given that much of the content on YouTube falls outside the scope of this defence. Yes, there’s lots of content that’s legit. But there’s also much that clearly isn’t. Insofar as fair use/dealing is relevant to allegations of indirect infringement, Canadian law is far less forgiving than American law. Most notably, there is no established parody defence in Canada. But because there are non-infringing uses of YouTube other than fair uses/dealings, including lots of licensed content, this distinction isn’t likely to determine anything.
The real differences between Canada and the US boil down to the nuances of indirect infringement and applicable defences. Canadian law imposes liability for authorizing acts of infringement, but not for simply contributing to, benefiting from or inducing them. Australian law is also different than American law, in that it too incorporates the concept of authorization. Despite the legal differences, the Federal Court of Australia and the United States Supreme Court reached roughly similar conclusions about liability for indirect infringement in the
Kazaa and
Grokster cases respectively. It does not follow, however, that a Canadian court would reach the same result.
The leading Canadian case on liability for authorizing infringement is
CCH v. LSUC. In it the Chief Justice of Canada, writing for a unanimous Supreme Court, explicitly rejected the principles of Australian law upon which the Kazaa decision was based, saying: “The [Australian] approach to authorization shifts the balance in copyright too far in favour of the owner’s rights and unnecessarily interferes with the proper use of copyrighted works for the good of society as a whole.” Even if a defendant could be said to authorize users’ activities, courts must presume they do so only insofar as it is in accordance with the law. So to be held liable based on conventional principles of Canadian copyright law the alleged authorizer must sanction, countenance and approve the infringement.
A Canadian safe harbour is found in paragraph 2.4(1)(b) of the Copyright Act. It provides that persons who only supply “the means of telecommunication necessary for another person to so communicate” are not themselves parties to the communication. The leading case on point is
SOCAN v. CAIP, in which the Supreme Court of Canada considered whether internet service providers were liable to pay a tariff (SOCAN’s Tariff 22) for the online communication of musical works. The Court held they were not. An intermediary falls within the safe harbour so long as it “confines itself to providing ‘a conduit’ for information communicated by others.” The use of techniques to improve the efficiency of communications, such as caching, does not affect intermediaries’ legal liability.
Unlike the U.S. provision, however, the Canadian safe harbour clearly does not apply to activities other than communication. A service provider or host might still be liable for reproductions that occur when content is cached. (Canadian broadcasters have litigated and lobbied unsuccessfully against a copyright tariff requiring payments for ephemeral reproductions.) Or, a service provider or host might be held to authorize the infringing acts of its customers.
SOCAN v. CAIP also dealt with that question. The Court found that “when massive amounts of non-copyrighted material are accessible to the end user, it is not possible to impute … an authority to download copyrighted material as opposed to non-copyrighted material.” However, Justice’s Binnie’s obiter dicta suggests that copyright liability may exist if a service provider has notice of infringing material on its system and “fails to take remedial action.” What sort of remedial action might be required? Well, the Court hinted that upon notice of infringing content, the host might be required to “take it down.”
Canadian legislators might have adopted a different approach. In 2005,
Bill C-60 was introduced to reform parts of Canadian copyright law. Though the Bill died before passing into law, it would have established a “notice-and-notice” system. That means a firm notified of alleged infringement could have escaped liability by forwarding the notice to its customer. Though less strict than a “notice-and-takedown” or “notice-and-termination” regime, it has been reported to be nonetheless effective. The Bill also would have immunized network services from all liability for caching, including communications and reproductions.
The US litigation against YouTube should provoke Canadians to ask another question when designing legislative reforms: What exactly is a ‘network service’? Bill C-60 would have provided a safe harbour for firms ‘providing services related to the operation of the Internet or other digital network.’ A firm that ‘provides digital memory in which another person stores a work or other subject-matter’ would have also been protected. But would this have covered YouTube? Should it have?
To sum up, sites that host peer-produced content would be on very shaky ground under Canadian law. This is something that our policymakers must think about if and when proposed reforms are eventually reintroduced.
