Arecent decisionof the EU’s highest court has confirmed that a Wi-Fi service provider is notresponsible for copyright infringement that took place using the Wi-Fi servicesprovided by them. However, the courtsaid that the Wi-Fi service provider could be subject to an injunction whichrequires it to password-protect the internet connection, provided that usersare required to reveal their identity in order to obtain the required passwordand may not act anonymously.
The Facts
TobiasMcFadden runs a business selling and leasing lighting and sound systems inGermany. He also operates an anonymousaccess wireless local area network, free of charge in the vicinity of hisbusiness. Access to the network wasintentionally not protected. Mr. McFadden is a strong proponent of theprotection of personal data and against excessive state surveillance.
Amusical work was made available on the Internet free of charge to the generalpublic without the consent of the rights owner, Sony Music. Mr. McFadden clearly asserted that he did notcommit the infringement but did not rule out the possibility it was committedby one of the users of his network.
SonyMusic sent a formal demand to Mr. McFadden with respect to its rights. On receipt of the notice McFadden brought anaction for a declaration of non-infringement. In reply Sony Music counterclaimed for damages against McFadden on thebasis of direct liability for infringement and an injunction to preventcontinuing infringement.
Theaction proceeded in the courts of Germany and consideration was given to caselaw on the indirect liability of wireless local area network operators to paydamages for not having taken measures to protect their wireless local areanetworks and prevent third parties from using it to infringe. Since the matterinvolved general matters that applied across the EU, a reference was made tothe Court of Justice.
Thecourt considered the effect of the directive that applied to the operation of informationsociety services. Article 12 of thedirective provides that when an information society service is provided thatconsists of the transmission in a communication network of information providedby a recipient of the service, or the provision of access to a communicationnetwork, EU members shall ensure that the service provider is not liable for theinformation transmitted. However, the article does not affect the possibilityof a court, in accordance with a specific EU country legal system, requiringthat the service provider terminate or prevent an infringement.
Thecourt said that Article 12 must be interpreted as precluding a person harmed byinfringement from claiming compensation from a provider of access to acommunication network. However, thearticle does not preclude such person from claiming injunctive relief against theservice provider to prevent the continuation of that infringement.
Withrespect to the ability of a court to issue an injunction, the court said that thegrant of an injunction was not precluded in a case of this nature. The injunction could require the serviceprovider, on payment of a fine, to prevent third parties from making aparticular copyright-protected work available to the general public from anonline exchange platform via the Internet connection available in thenetwork. The provider could choose whichtechnical measures to take in order to comply with the injunction even if achoice was limited to a single measure consisting in password protecting theinternet connection so long as the users were required to reveal their identityin order to obtain the required password and could not act anonymously. In practice it appears that only passwordprotection is possible.
The Canadian Position
Thedirective of the European Union was intended to implement the provisions of theWIPO Copyright and the WIPO Performances and Phonograms Treaties. The treaties provide that authors of literaryartistic works and performances and phonograms owners shall enjoy the exclusiveright to authorize any communication to the public of their works by wirelessmeans. However, neither treaty providesthat the mere provision of physical facilities for enabling or making acommunication by itself amounts to a communication.
Canadahas implemented these same treaties as have many other countries. As a result, the determination of the highestcourt of one country is of interest in othercountries.
Section31.1 of the Canadian Copyright Actprovides that the person who in providing services related to the operation ofthe internet or another digital network, provides any means for the telecommunicationor reproduction of works or other subject matter through the internet or thatother network does not, solely by reason of providing the means infringecopyright in that work or other subject matter.
Thereis no Canadian provision which, in this context, would require a serviceprovider to terminate or to prevent an infringement unless the service providerwas providing the service primarily for the purposes of enabling acts ofcopyright infringement.
Section41.25 of the Act provides that an owner of the copyright in a work or othersubject matter may send a notice of claimed infringement to the provider. The recipient, or in this case the WiFiprovider, must forward the notice electronically to the person to whom theelectronic location identified by the location data set out in the noticebelongs and inform the claimant of its forwarding or, if applicable, any reasonwhy it was not possible to forward it. In addition, there is an obligation to retain records that will allowthe identity of that person to be determined for a prescribed period. If a service provider fails to perform its obligationsunder the section, the claimant’s only remedy against a provider who did notperform its obligation under the section is statutory damages in an amount thatthe court considers just, but not less than $5,000 and not more than $10,000.
Therehave been no cases that have considered whether a WiFi service provider whooperates on the basis of anonymous access has any obligations under thissection.
Comment
Whilethe statutory provisions involved in the McFaddencase are substantially different than those of the Act the result is veryinteresting. It remains to be seen whether in a similar factual situation theprovider, has any obligations under section 41.25.
John McKeown
Goldman SloanNash & Haber LLP
480University Avenue, Suite 1600
Toronto,Ontario M5G 1V2
Direct Line:(416) 597-3371
Fax: (416)597-3370
Email: mckeown@gsnh.com
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