Supreme Court of Canada confirms test for obtaining Norwich orders in context of Copyright Act

Copyright holders are increasingly seeking Norwich orders against internet service providers to identify individuals misusing intellectual property online. A Norwich order is an exceptional pre-trial remedy that permits discovery of third parties to obtain information about a wrongdoer, often before a statement of claim is even issued. Once a Norwich order is granted, the internet service provider will typically be required to identify the individual whose IP address was implicated in the copyright infringement.

The Supreme Court of Canada in Rogers Communications Inc. v Voltage Pictures, LLC recently considered who bears the cost of complying with a Norwich order in the context of the Copyright Act: the copyright owner seeking the Norwich order, or the internet service provider against whom the order is sought?

Background

The issue before the Supreme Court arose out of an increasingly common issue: copyright infringement by anonymous internet subscribers who download and upload copyrighted content, while concealing their identifies from copyright owners due to the anonymity afforded by the internet.

The anonymity of internet subscribers is what triggered the need for a Norwich order. Voltage Pictures, LLC, a group of film production companies, alleged its copyrights had been infringed online by thousands of unidentified internet subscribers, who shared its films over the internet using peer-to-peer file sharing. Voltage sued one unknown subscriber (John Doe) for breach of copyright and brought a Norwich order to compel John Doe’s internet service provider, Rogers Communications Inc., to disclose John Doe’s contact and personal information.

At common law, a person seeking a Norwich order generally pays all reasonable costs incurred by the third party against whom the order is made for the steps taken to comply with the Norwich order. However, under sections 41.25 and 41.26 of the Copyright Act, an internet service provider must comply with statutory obligations when notified by a copyright owner that a person at a certain IP address is alleged to have infringed copyright (the notice and notice regime). These express obligations include: (1) forwarding the notice to the IP address owner, (2) informing the copyright owner of this forwarding (or the reasons for which it could not be done), and (3) retaining the records that would allow identification of the IP address owner. Internet service providers cannot charge a fee for complying with the express obligations of the notice and notice regime. The question became whether Rogers could charge Voltage any fee for compliance with the Norwich order.

At first instance, the motion judge fell on the common law side of the divide, ordering Voltage to compensate Rogers for all reasonable fees it incurred in complying with the Norwich order, including the steps that fell under the notice and notice regime. The Federal Court of Appeal disagreed, finding the steps formed part of Rogers’ implicit obligations under the notice and notice regime, such that the only costs Rogers could have recovered were those associated with “the actual act of disclosure when complying with a Norwich order.” Rogers appealed to the Supreme Court of Canada.

Supreme Court of Canada decision: the majority

The Supreme Court allowed Rogers’ appeal but remitted to the motion judge the quantum of Rogers’ reasonable costs of complying with the Norwich order.

The majority confirmed the test for Norwich orders from Alberta (Treasury Branches) v Leahy, 2000 ABQB 575, aff’d in 2002 ABCA 101, which has been consistently applied by lower courts in Canada but had yet to be considered by the Supreme Court: (1) a person seeking a Norwich order must show a bona fide claim against the unknown alleged wrongdoer; (2) the person from whom discovery is sought must be in some way involved in the matter under dispute; (3) the person from whom discovery is sought must be the only practical source of information available to the applicants; (4) the persons from whom discovery is sought must be reasonably compensated for their expenses arising out of compliance with the discovery order in addition to their legal costs; and (5) the public interests in favour of disclosure must outweigh the legitimate privacy concerns.

The majority was concerned with the fourth element of the Norwich test. Determining what Rogers could be compensated for under the Norwich test required understanding its statutory obligations under the notice and notice regime, and which steps taken to comply with the Norwich order truly overlapped with those obligations.

In addition to the express obligations noted above, the majority identified the following implicit statutory obligations required of internet service providers under the notice and notice regime: (1) determining, for the purposes of forwarding notice electronically, who was assigned the impugned IP address at the time of the alleged infringement; (2) taking all steps necessary to verify the internet service provider has done so accurately; and (3) taking all steps necessary to verify the accuracy of records that would permit the internet service provider to identify the name and physical address of the person to whom notice was forwarded.

The majority concluded that, by virtue of s. 41.26(2) of the Copyright Act, precluding an internet service provider from charging a fee for performing any of its notice and notice obligations, Rogers could not recover fees for satisfying its implicit obligations, in addition to its explicit obligations, outlined in the regime.

Notably, the majority distinguished between an internet service provider’s implicit obligations under the notice and notice regime and its obligation under a Norwich order to actually identify a person from its records. As the majority noted, the notice and notice regime “only goes so far”: the reasonable costs associated with actually identifying the person from the accurate records retained by an internet service provider will be recoverable.

The dissent

Justice Côté dissented from the majority. While she agreed the appeal should be allowed, she disagreed with the majority’s interpretation of the implied obligations in the notice and notice regime.

According to Justice Côté, the majority disregarded the vast number of notice and notice requests that Rogers receives and sends daily and, as a result, the reality of its process for complying with its statutory obligations. At no stage during Rogers' automated process, says Justice Côté, does Rogers verify the accuracy of the records it is required to retain. It is only during the process of complying with a Norwich order that Rogers manually verifies the accuracy of the information. To that end, Justice Côté held courts should consider whether the time spent verifying the accuracy of the information was reasonable in the circumstances and allow internet service providers to be compensated for such reasonable steps. She concluded that Rogers’ process was “not subsumed within the notice and notice regime” (para 74), as found by the majority.

Take-away

The Supreme Court’s decision in Rogers Communications helpfully outlines the test for obtaining Norwich orders and provides guidance on its interaction with the Copyright Act when the information sought relates to the identity of an alleged online copyright infringer.

The decision reminds copyright owners that a Norwich order is still necessary to obtain the identity of an alleged infringer from an internet service provider, despite the obligations in the notice and notice regime to retain records for this ultimate identification process. For internet service providers, the decision confirms the common law right to reasonable costs for steps taken in compliance with a Norwich order, so long as those steps do not fall under existing statutory obligations (whether express or implied) under the notice and notice regime.