Kazaa and Canadian Law
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Monday September 05, 2005
Earlier today an Australian court ruled in favour of the music industry in its copyright infringement suit against Sharman Networks, the company behind Kazaa. I won' t venture into providing an analysis of Australian law; see Kim Weatherall's excellent, quick analysis of the case, which notes that this decision is bad for innovation.
My pre-decision comments, which focused on the diminishing market share of Kazaa and the prospect for an appeal regardless of how the decision unfolded, remain unchanged.
From a Canadian perspective, the case highlights a growing divergence between Canadian and Australian copyright law such that the outcome of a similar case in Canada could potentially be much different (more on that at our comparative conference later this month in Ottawa).
Some of the differences between our two laws are obvious; for example, the existence of a making available right in Australia but only proposed here in Bill C-60. The more important distinction in this case, however, involves the question of authorization (or authorisation). Critical to today' s Kazaa decision was reliance on the test developed in Moorhouse, an Australian case, for determining authorization. The court concluded that Sharman Networks, along with several of its directors, met that standard. While acknowledging the existence of legal warnings against copyright infringement, the court was troubled that "Sharman took no steps to include a filtering mechanism in its software, even in software intended to be provided to new users."
The Supreme Court of Canada considered the authorization issue last year in CCH v. Law Society of Upper Canada. The Canadian court explicitly rejected the Moorhouse test, concluding that "Moorhouse is inconsistent with previous Canadian and British approaches to this issue. In my view, the Moorhouse approach to authorization shifts the balance in copyright too far in favour of the owner's rights and unnecessarily interferes with the proper use of copyrighted works for the good of society as a whole."
As for the application of authorization test, the Canadian Supreme Court stated that "a person does not authorize infringement by authorizing the mere use of equipment that could be used to infringe copyright. Courts should presume that a person who authorizes an activity does so only so far as it is in accordance with the law. This presumption may be rebutted if it is shown that a certain relationship or degree of control existed between the alleged authorizer and the persons who committed the copyright infringement."
In other words, under Canadian law, Kazaa would be entitled to presume that its services are being used lawfully consistent with its legal terms. Could the music industry rebut the presumption against a Canadian Kazaa? Hard to say. It might prove to be a challenge given questions about whether downloading for personal purposes constitutes copyright infringement in Canada and the evidence needed to show a relationship or degree of control that rises to the level of authorization under Canadian law.
Dominic Ryan said:
Monday September 05, 2005