Canada’s Anti-File-Sharing Settlement Demands Receives Royal Assent

Canada’s law forbidding the injection of settlement demands in its notice-and-notice system has officially received royal assent.

Christmas may be next week, but the Canadian government has delivered an early Christmas present to Canadians. Back in November, as part of Bill C-86, the Canadian government moved to end the practice of injecting settlement demands in file-sharing notices.

The move would patch a glaring flaw in Canada’s notice-and-notice system. Before, shady anti-filesharing companies would insert settlement demands in the various notices they were sending to alleged file-sharers. The “settlements” have been known to threaten Canadians with millions in penalties if they don’t pay up a comparatively small “settlement” fee of a few hundred to a few thousand dollars. Sometimes, the settlements would go so far as to erroneously cite American copyright law as part of the legal threats.

The practice has long been blasted as racketeering, blackmail, ransoms, copyfraud, and more. Unfortunately, they Canadian laws didn’t forbid what was said in the notice, just that ISPs have to forward the notices onto subscribers.

Now, finally, a reprieve. The Canadian government has finally acknowledged that the practice is not what the law intended and moved to end the practice. Earlier this week, the Canadian governments law banning the practice of shady file-sharing settlement demand notices has received royal assent. A quick refresher on what the laws explicitly state:

(3) A notice of claimed infringement shall not contain:
(a) an offer to settle the claimed infringement;
(b) a request or demand, made in relation to the claimed infringement, for payment or for personal information;
(c) a reference, including by way of hyperlink, to such an offer, request or demand; and
(d) any other information that may be prescribed by regulation

Moving forward, if Canadian’s receive settlement demands for alleged file-sharing activities, those demands are actually illegal. Michael Geist notes that the laws don’t actually carry any penalties for copyright violators:

In short, the law now excludes notices that contains an offer to settle, a payment demand or a link to a payment demand. Any notices that include that information do not need to be forwarded and ISPs will not face any penalties for failing to do so. The key remaining question is whether ISPs will crackdown on non-compliant notices. Since there is no penalty associated with sending non-compliant notices, subscribers are dependent upon ISPs carefully reviewing notices to ensure that they only forward those that fully comply with the law.

While enforcement of the law is up in the air and left to the determination of ISPs, it’s hard to argue that this isn’t a step in the right direction. If anything, it clarifies the law and the government stance that if a rightsholder wants a certain individual to stop sharing content, they are free to use the notice-and-notice system. However, the rightsholder cannot misuse the system and turn the system into their own personal ATM machines.

It may not be the end of the story as there are no doubt going to be those that will try and continue to abuse the copyright system, but for now, a good news story at the very least.

Drew Wilson on Twitter: @icecube85 and Google+.

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