Music Canada - Legal Actions

Legal Actions

On February 16, 2004, Music Canada applied to the Federal Court to force five major Canadian internet service providers — Shaw Communications Inc., Telus Corp., Rogers Cable, Bell Canada's Sympatico service and Quebec's Vidéotron — to hand over the names of 29 people accused of copyright infringement through peer-to-peer file sharing. On April 2005, Vidéotron indicated its willingness to supply customer information to Music Canada.

On March 31, 2004, in the case of BMG v. John Doe, Justice Konrad von Finckenstein of the Federal Court of Canada ruled that making music available for download over the Internet was not equivalent to distribution and was thus noninfringing. The Justice compared the peer-to-peer filesharing activities to "having a photocopier in a library room full of copyrighted material" and wrote that there was no evidence of unauthorized distribution presented. The Federal Court of Appeal upheld the lower courts ruling denying the disclosure of the customers' identities, but, in reference to "what would or would not constitute infringement of copyright," stated: "such conclusions should not have been made in the very preliminary stages of this action, since they would require a consideration of the evidence as well as the law applicable to such evidence after it has been properly adduced, and could be damaging to the parties if a trial takes place." The Copyright Board of Canada earlier that year had included downloading music in the list of "private copying" activities for which tariffs on blank media applied. (Private copying is the act of copying music for personal use from a noninfringing source, and is itself noninfringing.) That made it extremely unlikely that downloaders could be successfully prosecuted, leaving only the possibility of acting against uploaders, those supplying the works to others on the networks.

In 2008, the operators of the isoHunt website filed a motion with the Supreme Court of British Columbia seeking a declaratory judgment affirming the legality of their operation. The motion was denied, and the court ruled a full trial was needed. This decision was appealed by the operators of isoHunt; the appeal was also denied. In late 2009, isoHunt filed a formal suit against Music Canada and the four "major" record labels seeking "declaratory relief to clarify its legal rights."

Additionally, in October 2008, the four main members of Music Canada were sued by the estate of Chet Baker and several other artists for copyright infringement. The major claims in this lawsuit are as follows:

• That some three hundred thousand works were illegally distributed by the Music Canada's members, and

• That they failed to seek proper licensing and distribution agreements with the creators of the aforementioned works, instead placing the works on what is colloquially referred to as a "pending list" (i.e., any payments to be made for the use of the aforementioned works are reserved, pending an agreement with the artists who created the works).

As the standard punitive damages for each act of infringement is set at $20,000, and there are three hundred thousand works on the "pending lists", Music Canada may face punitive damages of a minimum of $6 billion.