The Supreme Court of Canada ruled 9-0 Wednesday morning that Internet service providers (ISPs) should not be held responsible nor should be ordered to pay royalties to composers and artists for music downloaded by their Internet customers.
According to reports, the court ruled that ISPs are simply "intermediaries" and therefore are not bound by federal copyright legislation.
The ruling comes as a result of an ongoing campaign by the Society of Composers, Authors and Music Publishers of Canada (SOCAN). The organization administers performing rights of copyright-protected musical works in Canada and distributes fees collected as royalties to its members and affiliated performing rights organizations worldwide.
In its argument, SOCAN took aim at the Canadian Association of Internet Service Providers (CAIP), the organization representing ISPs of all sizes across Canada, including Bell Canada, Sprint, America Online Inc., MCI Inc. and Yahoo Inc. SOCAN was seeking to order ISPs to pay tariffs
"It is a great victory for ISPs," said Wendy Gross, partner with Toronto-based law firm, Tory's LLC. "It is a victory for ISPs and customers alike. The added costs would have had detrimental effects on competition ... ."
Tristan Goguen agreed with Gross. Goguen, president of Toronto-based ISP Internet Light and Power said had the ruling gone in favor of SOCAN, in all likelihood tariffs charged to ISPs would have eventually fallen on the shoulders of customers.
"ISP customers would have (had) to pay more in the end ... we don't feel that the industry should be punished for the behavior of a few individuals... . We are ecstatic, just ecstatic at the ruling."
Canada's neighbors to the south have taken a very different approach to illegal music downloads by going after individual file swappers, not the ISP industry, a route that Tory's Gross said SOCAN will likely be forced to take.
"SOCAN will have to go after the people who are actually infringers," Gross told IT World Canada. "There can be no appeal made once the Supreme Court of Canada has ruled."