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Canada Eyes Ban On Shady Piracy Warnings That Demand Payment

Bill C-86 would end the obligation for ISPs to forward misleading copyright infringement notices that ask for a settlement payment to customers accused of pirating media.
A man receives a copyright infringement notice demanding settlement payment.
Image: Shutterstock

The Canadian government is considering a ban on aggressive and misleading settlement warnings sent to people accused of piracy. Such warnings typically promise that recipients can avoid a costly legal battle over copyright infringement by paying an upfront fee to companies employed by the entertainment industry.

Such letters—which usually ask for $20 to $75 per infringement—have a long history of abuse by copyright trolls that have attempted to turn piracy warnings into a controversial revenue stream, often while ignoring the finer points of the law.


A new proposed law—called Bill C-86, part of Canada’s Budget Implementation Act—would, among other things, effectively ban such settlement letters by freeing internet service providers (ISPs) from the obligation to forward them to customers in the first place. Currently, an ISP may remind a recipient that they have no legal obligation to pay any settlement fee to the rights holder when forwarding a notice. According to Canadian law professor Michael Geist, a frequent and outspoken critic of heavy-handed copyright enforcement, the new proposal is a promising first step in preventing the entertainment industry from using fear and dubious legal claims as a shaky business model.

“Restricting speech altogether would have faced a challenge, but removing the requirement to forward notices that contain settlement demands is a great starting point,” Geist told me in an email. “I think it was the most obvious approach.”

Read More: What Happens When Telecom Companies Search Your Home for Piracy

Canada’s “notice-and-notice” system was first crafted in 2012 as a way to allow rights holders to forward allegations of online copyright infringement to broadband users via their ISPs. The hope was that users could be educated away from engaging in piracy and steered toward more above-board sources for music, movies, and games. According to Geist, within hours of the 2012 rules being passed, copyright trolls began sending broadband users threatening missives saying that they could avoid court if they pay up. One company notorious for misleading and threatening letters asking for payment is Rightscorp. According to copyright lawyer Rob Cashman, once someone admits to copyright infringement by paying the initial fee of between $20 and $75, Rightscorp often circles back around, your admission of guilt in hand, demanding additional fees for any additional accusations of infringement. Court records from US ISP Cox’s battle with the entertainment industry revealed that Rightscorp’s script for talking to potential settlement targets often includes entirely false claims, such as insisting that targets must hand over their personal PCs to law enforcement. Rightscop’s letters in Canada have included falsehoods such threatening the recipient with $150,000 in liability per infringement when Canadian law caps liability at $5,000.


There’s other, numerous legal and ethical issues with such letters.

For one, they routinely assume automatic guilt by IP address, when there’s numerous circumstances where that’s not necessarily true (such as somebody downloading the Led Zeppelin discography via an unsecured WiFi hotspot while sitting in your driveway). Under Canadian law there is also an established—and costly, for rights holders—process that ISPs must complete to confirm the identity of a customer behind an IP address.

A 2015 letter sent to the Canadian government by a coalition of copyright experts and consumer groups urged Canadian lawmakers to ban copyright infringement notices that demand settlements, saying they were often legally and morally unsound.

“We have seen notices claiming infringement of foreign law, misrepresenting the scope of damages recipients potentially face, omitting mention of defenses, and failing to identify the notice as a mere allegation of infringement,” the letter stated. Bill C-86 is already the seeing widespread support, meaning that after years of demands from ISPs and copyright reformers alike, the use of settlement letters in Canada as an entertainment industry revenue stream may soon come to an end.

“ISPs are often blamed for the notices, but maintain that they are merely following the law,” Geist told me. “By removing the legal requirement to forward notices with settlement demands, ISPs should refrain from forwarding such non-compliant notices.”

Rightscorp has been widely maligned in Canada and the US for routinely misinforming the public, and has played a starring role in trying to pass laws demanding that repeat copyright infringers be kicked off of the internet entirely, often based on little more than flimsy accusations of guilt and very little in the way of due process. Canadian ISPs like Rogers have consistently opposed the inclusion of settlement demands in such notices. In the US, smaller ISPs like Texas-based Grande Communications have criticized Rightscorp for not only a lack of hard evidence in accusations, but for attempting to turn ISPs into “copyright police” tasked with aiding a glorified extortion-like scheme against consumers across North America. While copyright trolls like Rightscorp continue to see some worrying legal victories in the US, Canada’s new law could prove fatal to such firms’ long-standing effort to use fear, unsound legal theory, and often evidence-optional accusations of guilt as a business model.

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