Stuart Freen is a JD candidate at Osgoode Hall Law School.

While most of the media coverage of Bill C-32 (aka the “Copyright Modernization Act”) has focused on either the increased protection for digital locks or the new categories of user rights, the bill also includes some tough new laws aimed at stamping out illegitimate bit torrent trackers and other peer-to-peer services. The proposed amendments would expand the secondary infringement section of the Copyright Act, making it illegal to provide internet services that are intended to facilitate copyright infringement. The amendments are carefully worded to catch pirate file sharing services while at the same time excluding legitimate search engines and internet service providers. But, do the new provisions strike the right balance?

The existing secondary infringement provisions are found in s. 27(2) of the Copyright Act, R.S. 1985, c. C-42. The section prohibits selling, renting, importing or distributing works that infringe copyright in Canada. Essentially, the secondary infringement section aims to cut off piracy at the middle man; it makes it illegal to deal in copyrighted works even when the dealer did not copy the works itself.

Bill C-32 would extend the secondary infringement provisions to specifically include online services. The proposed s. 27(2.3) states that:

(2.3) It is an infringement of copyright for a person to provide, by means of the Internet or another digital network, a service that the person knows or should have known is designed primarily to enable acts of copyright infringement if an actual infringement of copyright occurs by means of the Internet or another digital network as a result of the use of that service.

In addition, Bill C-32 would introduce a number of factors that a court could consider in determining whether an online service was a good or bad one:

(2.4) In determining whether a person has infringed copyright under subsection (2.3), the court may consider

(a) whether the person expressly or implicitly marketed or promoted the service as one that could be used to enable acts of copyright infringement;

(b) whether the person had knowledge that the service was used to enable a significant number of acts of copyright infringement;

(c) whether the service has significant uses other than to enable acts of copyright infringement;

(d) the person’s ability, as part of providing the service, to limit acts of copyright infringement, and any action taken by the person to do so;

(e) any benefits the person received as a result of enabling the acts of copyright infringement; and

(f) the economic viability of the provision of the service if it were not used to enable acts of copyright infringement.

The new sections clearly target online file-sharing services, including bit-torrent trackers and some streaming video sites. Canada has become somewhat notorious in recent years for being a safe-haven for media piracy. Several of the world’s largest bit torrent sites such as isoHunt are hosted in Canada, and law enforcement has thus-far been unwilling to shut down servers and arrest operators as other countries like Sweden and the Netherlands have recently done. The United States has repeatedly listed Canada on an IP “watch list”, and IFPI recently condemned Canada as a “major source of the world’s piracy problem.”

With bit torrent technology, a service provider (also known as a “tracker”) acts as an intermediary, directing traffic between peers. The tracker does not, strictly speaking, host any infringing files. Instead, it merely points users to other users to allow them to download files directly from one another. Shutting down a tracker will shut down a whole trading network. The technology can (and has) been used for legitimate purposes such as distributing open source software, but overwhelmingly it is used to share pirated movies, music and software.

Bill C-32 treads a fine line between outlawing services that trade primarily in copyrighted goods (such as isoHunt), and criminalizing services that, though they can be used for illegitimate purposes, are on the whole not intended for piracy. Search engines like Google, for instance, can be used to find copyrighted works, but that is obviously not their primary intention. Other file-hosting services like Youtube and Megavideo occupy more of a grey area; while they certainly do facilitate piracy at some level and perhaps even profit from it, they undoubtedly have primarily legitimate or neutral purposes. (Note: Those sites aren't Canadian, but they illustrate the point. Megavideo in particular is largely used for streaming pirated TV shows and movies.)

The bill attempts to distinguish between legitimate and illegitimate service providers through the factors in proposed s. 27(2.4), and on the whole it does a good job. Factors (e) and (f) suggest that the balance may be in favour of the service providers, i.e. it will have to be fairly obvious that a site caters to pirates before it’s shut down. Intention is a key theme in the new section. Where it appears that a service provider intended or ought to have known that their service would be used for piracy, it will be considered infringement. The factors in s. 27(2.4) all assess different aspects of a service provider’s intention, and they seem to hit all of the important points. The factors are reminiscent of the factors considered by the US Supreme Court in MGM v. Grokster, which might indicate the approach a Canadian court would take when considering the section.

The combined effect is that sites like Youtube that do make efforts to control piracy should be safe from the new provisions, while true 'skull and crossbones' pirate sites will almost certainly be caught. The interesting cases will be the in-between technology neutral sites like Megavideo that have both legitimate and illegitimate functions. It will be a line-drawing exercise to determine which are intended for copyright infringement and which are not.