When Copyright Infringement and Net Neutrality Collide 

Bryan Hsu, 3L, Volume 80 Senior Editor

In Teksavvy Solutions Inc v Bell Media Inc, 2021 FCA 100 (Teksavvy), the Federal Court of Appeal upheld Canada’s first site-blocking order by the Federal Court. The site-blocking order compels Internet service providers (“ISPs”) to block user access to websites which have the primary purpose of providing copyright infringing content. On August 25, 2021, Teksavvy sought leave to appeal to the Supreme Court of Canada.

This post contends that the Courts were correct to hold that they had equitable jurisdiction to grant the site-blocking order. However, given the recent history regarding the pursuit of these remedies in Canada and the likelihood that Parliament will soon update the Copyright Act to address injunctions against third party intermediaries, the Federal Court should have refrained from exercising its equitable jurisdiction. 

Background

Piracy of copyrighted works, such as television programming, is a challenge that plagues copyright holders. This commonly occurs on illicit streaming websites. Over the past four years, there has been concerted effort from copyright holders to obtain website-blocking orders as a relief from these infringements.

In 2018, twenty-five media organizations, artists, and content creators formed a coalition, the Fairplay Coalition. The Fairplay Coalition petitioned the Canadian Radio-television and Telecommunications Commission (“CRTC”) to create an Independent Piracy Review Agency aimed at preventing piracy through the implementation of a site-blocking regime. However, the CRTC rejected this petition on jurisdictional grounds. In its decision, the CRTC noted that the creation of new copyright remedies under the Telecommunications Act in the absence of clear statutory language would conflict with Parliament’s intent in creating an exhaustive copyright code [1]. 

Proponents of website blocking then turned to the Standing Committee on Industry, Science and Technology for statutory review of the Copyright Act. After conducting its review of arguments on the merits of site-blocking, the Committee recommended the following under Recommendation 27:

“Following the review of the Telecommunications Act, that the Government of Canada consider evaluating tools to provide injunctive relief in a court of law for deliberate online copyright infringement and that paramount importance be given to net neutrality in dealing with impacts on form and function of Internet in the application of copyright law.” [2]  

Therefore, having considered the different policy arguments, the Committee did not explicitly recommend that the implementation of a site-blocking regime.

It is with this historical backdrop that the following site-blocking order decision arose. 

Facts

The plaintiffs are Canadian broadcast companies who either own Canadian broadcasting rights or are exclusive licensees for a variety of television programing (Bell Media Inc v GoldTV.Biz., 2019 FC 1432 at para 2) (Bell Media). The plaintiffs sought and were granted an interlocutory injunction against the anonymous operators of goldtv.biz and goldtv.ca (the “GoldTV Services”) for operating an unauthorized streaming service that infringed the plaintiffs’ copyrights. Despite the injunction, the GoldTV Services continued to operate (Bell Media at paras 7-8).

The plaintiffs then sought a motion for a site-blocking order against eleven third party ISPs to block access to the GoldTV Services (Bell Media at para 8). Teksavvy Solutions Inc (“Teksavvy”) opposed the order (Bell Media at para 3). 

The Federal Court and Federal Court of Appeal Decisions

In both the Federal Court and Federal Court of Appeal decisions, issues of jurisdiction, freedom of expression and whether a site-blocking order would be just and equitable were considered. 

Whether the Federal Court has jurisdiction to issue a site-blocking order

Justice Locke, writing for the unanimous Federal Court of Appeal, affirmed the Federal Court decision that it had the authority to grant the site-blocking order. Sections 4 and 44 of the Federal Courts Act provides for the Court’s equitable jurisdiction. This jurisdiction, subject to any relevant statutory limitations, is generally unlimited. Section 34(1) of the Copyright Act provides that injunction is one of the remedies contemplated to address copyright infringement (Teksavvy at paras 19-21).  

Teksavvy argued that if the Court had equitable jurisdiction to issue the order, it should decline to do so. Teksavvy claimed that the remedies listed in the Copyright Act are exhaustive and do not include site-blocking orders (Bell Media at para 28, Teksavvy at paras 23, 24). This argument was rejected at both levels of court. Locke JA noted examples, such as a Norwich orders and Mareva injunctions, which have been granted in copyright infringement cases and are not contemplated remedies in the Copyright Act (Teksavvy at paras 29, 31). 

Teksavvy further argued that s. 36 of the Telecommunications Act contemplates net neutrality by ISPs and prohibits ISPs from controlling the content of its telecommunications (Teksavvy at para 33). However, Locke JA rejected this argument, stating that a court-ordered injunction does not amount to an ISP controlling content, rather it is the ISP that is being controlled (Teksavvy at para 36).

Freedom of Expression

Teksavvy argued that the site-blocking order would impinge on their customers’ freedom of expression (Teksavvy at para 49). In the Federal Court, Gleeson J held that freedom of expression did not tip the balance against granting the injunction in the face of a strong prima facie case of ongoing infringement and a carefully crafted blocking order (Bell Media at para 97). 

In the appellate decision, Locke JA cited Google Inc v Equustek Solutions Inc, 2017 SCC 34 (Equustek), to hold that the freedom of expression issue can be adequately addressed in the balance of convenience analysis of the interlocutory injunction test (Teksavvy at para 53) and that the Federal Court’s brief analysis was not inadequate (Teksavvy at paras 55-56).

Teksavvy also argued that the ISP’s expressive rights would be impinged. Locke JA denied that ISPs engage in expressive activity as they are subject to the obligation of net neutrality and as such, do not show preference for one website over another (Teksavvy at para 50). 

Whether the order was just and equitable

To determine whether the site-blocking order would be just and equitable, the Federal Court applied the interlocutory injunction test from RJR-MacDonald Inc v Canada (Attorney General) ([1994] 1 SCR 311, 1994 CanLII 177 (SCC)), which asks if (1) there is a serious issue to be tried; (2) irreparable harm will result if the injunction is not granted; and (3) the balance of convenience favours the plaintiff (Bell Media at para 43). In applying the test, Gleeson J incorporated factors identified in a UK site-blocking order decision, Cartier International AG v British Sky Broadcasting Ltd ([2016] EWCA Civ 658) (Cartier)—necessity, effectiveness, dissuasiveness, complexity and cost, barriers to legitimate use or trade, fairness substitution and safeguards—to guide the balance of convenience determination. Gleeson J concluded that all three elements of the RJR-MacDonald test were satisfied and that the balance of convenience favoured the plaintiffs (Bell Media at para 104). 

On appeal, Teksavvy argued that Gleeson J’s discretion was fettered from relying on the Cartier factors, which are grounded on the EU Enforcement Directive and has no application in Canada (Teksavvy at para 75). Locke JA rejected this argument, noting Gleeson J recognized the Cartier factors were grounded on foreign law and that the fundamental question was whether the order would be just and equitable (Teksavvy at para 76). 

Locke JA found there was no error on Gleeson J’s analysis of the applicable legal test and dismissed the appeal (Teksavvy at para 88).

Discussion

With the Federal Court of Appeal’s decision, copyright holders have one more powerful remedy in their toolkit to enforce their rights against illicit streaming websites. The decision appears to have emboldened rightsholders. Three plaintiffs recently filed a motion for a dynamic site-blocking order to block access to a rolling list of IP addresses in real-time that are alleged to be infringing on their Canadian National Hockey League broadcasting rights [3]. This would be a more substantial site-blocking order as there would be little judicial oversight to approve the updating lists of blocked IP addresses.  

This decision brings forward the question about the role ISPs play in the enforcement of copyrights. On the one side, proponents of the decision see site-blocking orders as necessary for copyright holders to protect their rights. As intellectual property lawyer Barry Sookman writes, 

“[b]locking order remedies were developed because ISP systems are used to facilitate the illegal dissemination of materials, other remedies in the toolbox are not effective, and because ISPs are best placed to mitigate or bring illegal behavior to an end.” [4] 

On the other side, those who are in support of net neutrality fear this decision will move us towards a less open Internet. The concept of net neutrality dictates that all traffic on the Internet be given equal treatment by ISPs with little to no manipulation, interference, prioritization, discrimination or preference given [5]. The worry is one of a slippery slope. Once one site-blocking order is granted, the fear is that the floodgates will open. This fear does not seem unsubstantiated given how quickly the NHL dynamic site-blocking order was sought after this decision.

Law professor Michael Geist argues that the initial Federal Court decision was wrongly decided from both a policy and legal perspective because the motions judge effectively substituted his own views over Parliament’s judgement. Further, the Court incorrectly relied on Cartier, which was decided in a different jurisdiction with different legal rules [6]. 

The difficulty comes from the court’s inherent equitable jurisdiction to do justice against a clear wrong. However, remedying the wrong could have significant policy implications. I argue that while the Federal Court had equitable jurisdiction to grant the site-blocking order, given the legislative history and likelihood that Parliament would soon consider the matter, the Court should have refused to exercise its equitable jurisdiction.

In justifying the Federal Court’s reliance on the Cartier factors, Gleeson J aptly noted that the UK Court of Appeal would have been comfortable to grant the site-blocking order if necessary based on s. 37(1) of the UK Superior Courts Act. This section provides for granting injunctions when it is just and convenient to do so (Cartier at para 72). The language mirrors s. 44 of Canada’s Federal Court’s Act and therefore justifies the use of the Cartier factors, despite the different statutory context (Bell Media at paras 48-50).   

However, despite the Cartier Court writing it would be comfortable to ground the site-blocking order solely on s. 37(1) of the Superior Courts Act, it did not do so. Rather, the Court grounded its decision on s. 37(1) of the Act read in light of Article 11 of the European Enforcement Directive (Cartier at para 76), which compels member States to “ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe an intellectual property right…”. Further, although not applicable in Cartier, as it involved trademark infringement, s. 97A of the UK Copyright, Designs and Patents Act 1988 provides for the express power of courts to grant injunctions against service providers where the service provider has actual knowledge of another person using their service to infringe copyright. These provisions can be thought of as Parliament giving a go-ahead for the courts to figure out the factors to consider in enforcing site-blocking orders against innocent third party intermediaries. 

This is not the case in Canada. There is no similar statutory basis in the Copyright Act that expressly allows for an injunction against third party intermediaries. This might be interpreted as the legislature not providing a similar go-ahead to the courts to identify the factors in granting a site-blocking order. Rather, judicial restraint would be appropriate in a decision that has complex policy considerations and where a court may not be provided the full array of viewpoints. Interestingly, in Teksavvy’s application for leave to the Supreme Court of Canada, they point to a High Court of Ireland Internet piracy decision in which the Court held that because Ireland had no legislative provisions for blocking, it could not provide injunctive relief (EMI Records (Ireland) Ltd & ors v UPC Communications Ireland Ltd, [2010] IEHC 377 at para 138)(EMI Records). The Court stated “[f]or the Court to pursue the course of granting an injunction on the basis not of law but of economic abuse or moral turpitude would the lead the Court beyond the threshold of the judicial arm of government and into legislation.” (EMI Records at para 86). Of course this decision is not binding in Canada, however it provides for a relevant comparison to the current Canadian context.

However, if the Federal Court was right to use the Cartier factors as a source of inspiration, I suggest that a one-to-one application of the Cartier factors does not give due weight to the history of the site-blocking debate in Canada. It is clear from the 2019 INDU Committee recommendations, the issue of site-blocking orders was contemplated, but there was no express recommendation to create a site-blocking regime (INDU Review, note [2] at 98). Rather, it recommended that if injunctive relief was contemplated, net neutrality must be of paramount importance. In applying the Cartier factors, Gleeson J dealt with the issue of net neutrality summarily in one paragraph (Bell Media at para 97). Locke JA also made relatively short shrift of the net neutrality issue in holding there is no net neutrality issue because the ISPs are being controlled by the site-blocking order (Teksavvy at para 36). At the very least the Courts should have grappled with the subject of net neutrality more thoroughly, even if they would have ultimately arrived at the same result. 

At this point, it is unclear how the development of site-blocking orders will proceed given the outstanding leave application to the Supreme Court of Canada. Nevertheless, it is unlikely the Federal Court of Appeal’s decision will be the last word on the matter. This issue is likely in the Legislature’s mind as it has recently completed a consultation on a Modern Copyright Framework for Online Intermediaries, which suggests legislative reform is upcoming.

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