ISPs free from paying royalties

Internet service providers should not have to pay royalties to the music industry for files downloaded by their customers, the Supreme Court of Canada ruled Wednesday.

The court decided 9-0 that companies providing access to the web, are merely "intermediaries" in the downloading process and are therefore not bound by federal copyright legislation.

"This sounds like a big victory for the ISPs, who had been arguing loudly not be held responsible for delivering content that is not their own," Michael Geist, a legal professor at Ottawa University and one of the country's top authorities on digital copyright issues, told globeandmail.com.

The Canadian Association of Internet Providers, which includes subsidiaries of high-tech giants Bell, Sprint, AOL, MCI, IBM and Yahoo, fought the effort by the Society of Composers, Authors and Music Publishers of Canada (SOCAN).

CAIP argued that their services act as a conduit from websites to surfers, transmitting content to which they are not privy.

Upholding the attempt by the music industry to force ISPs to pay tariffs "would have put Canada at odds with most of the rest of the world in terms of liability for caching and created a significant impediment for ISPs and users across the country," Mr. Geist said.

SOCAN had also wanted Canadian copyright law extended beyond Canada's borders to offshore websites accessed by Canadians.

Since ISPs are not the publishers of the material, but simply pipelines for it, they should be protected by the measures for intermediaries within the copyright laws, Mr. Geist said.

He noted that this is the second Supreme Court decision that has clarified that people who merely provide devices or services enabling copying are not responsible for copying that runs afoul of the law.

In the first, and analogous, decision last March, the Supreme Court overturned a lower court judgment that said the Law Society of Upper Canada, the governing body for Ontario lawyers, had violated the copyrights of three legal publishers by selling their work at the Great Library at Osgoode Hall in Toronto without paying a licensing fee.

The Supreme Court ultimately decided that the Society could not be held responsible for infringements that had taken place simply because the group owned the machine on which the copying occurred.

In this case, SOCAN took a simpler and broader legal approach than that taken by the recording industry in the United States, where specific file-sharing services and the individuals who download their music were hunted and litigated piecemeal.

SOCAN recognized that it is simply inefficient to go after the websites and users one by one, deciding instead that the ISPs were the best parties to try to target for royalties.