Canadian Lawyer

June 2009

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LEGAL REPORT: INTELLECTUAL PROPERTY Ruling over Pirate Bay may have a ripple effect in Canada, which many say still needs stronger copyright laws. BY KEVIN MARRON Pirates sunk N ow that a Swedish court has put the notorious peer-to-peer web site Pirate Bay to the sword, mil- lions of would-be copyright pirates will be looking for another safe haven and many intellectual property lawyers are afraid they will find one in Canada's data ports. "There's an international per- ception among pirates that Canada is a great place to set up a site," says Barry Sookman, co-chairman of McCarthy Tétrault LLP's technology law group. He notes that several sites have already estab- lished in Canada using the same bit tor- rent file-sharing technology that attracted 3.5 million registered users and more than 21 million unregistered users to Pirate Bay. Now, he says, as bit torrent site operators and an estimated 150 million users world- wide "get chased away from other coun- tries, they'll start gravitating to Canada." It's a wake-up call, says Sookman, for Canada to update its antiquated copy- right laws and join other major devel- oped countries in enacting legislation that responds to the new Internet technologies and practices that are transforming cre- ative industries. Now under appeal, the April Pirate Bay decision imposed one-year jail terms on four people associated with the site, ordering them to pay $4.5 million in dam- ages to various entertainment companies. Richard Pfohl, general counsel for the Canadian Recording Industry Association (CRIA), says the ruling is welcome news for Canadian copyright holders, because it will likely lead to shutting down the world's leading source of pirated material, thus making it that more difficult for peo- ple in Canada as elsewhere in the world to download music without paying for it. While the case obviously has no prec- edential value in Canadian law, Pfohl says it could prove influential, particularly because it exposed the weakness of the "see no evil, hear no evil, speak no evil" posture that bit torrent sites assume. The sites' owners routinely claim they are merely providing users with a search engine for locating content online, that no content is stored or downloaded on their sites, and they therefore have no responsibly for any illegal file sharing that goes on. In the Pirate Bay decision, Pfohl says, the court seems to be saying: "When 90 or 95 per cent of the material on your site is infringing copyright, when you profit to the tune of millions of dollars per year on that infringement, and that's what's run- ning your business and everybody knows that if the infringing material went away you would be out of business — you can't seriously expect us to believe that you don't play some role in this." But the state of Canadian law is such, says Pfohl, that organizations like his are forced to defend themselves against digital pirates rather than go after them. CRIA is currently involved in a legal wrangle with isoHunt Web Technologies Inc., a British Columbia operation and one of the five most popular bit torrent sites in the world. Last year, CRIA sent isoHunt several cease and desist notices regarding alleged copy- right infringements. It responded by nam- ing CRIA in a petition to the Supreme Court of British Columbia asking the court to establish whether its activities are in breach of copyright. Earlier this year, the court accepted the CRIA's position that the issue could only be resolved in a full- fledged court case, leaving it up to isoHunt to decide whether or not to proceed with a suit against CRIA. "This case is telling," says Pfohl. "Canada is the only jurisdic- tion in the world, to my knowledge, where the illegitimate file-sharing service has sued the rights holders and said, 'You can't touch me under Canadian law.'" The legality of file sharing in Canada is a topic of ongoing debate. "Some say there is no part of file sharing that is even remotely legal," says Peter Wells, of Lang Michener LLP. "I tend to be in the camp that believes that if it's music that you're downloading that is probably permissible under s. 82 of the Copyright Act, which says that to make a copy of musical record- ing is not an infringement of copyright." Wells points out when people buy blank CDs or DVDs, part of the price is a levy that goes for distribution to artists. On the other hand, it's clear uploading copyrighted files for others to copy is not permitted. And Wells maintains that it is possible to prosecute violators under existing Canadian copyright law since the legislation does include enforcement pro- visions. There is no need for a stronger new law. "I think we have the tools now www. C ANADIAN Law ye JUNE 2009 41 TODD JULIE

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