## Facts

- A collective rights organization sought approval of a tariff to collect royalties for musical works transmitted over the Internet.
- The Copyright Board considered whether Internet transmissions constitute a “communication to the public by telecommunication” and who should pay royalties.
- The Board concluded royalties could apply to those who post music to a server in Canada accessible to Internet users, but not to intermediaries whose role was limited to operating servers, routing data, or providing Internet access.
- On judicial review, the Federal Court of Appeal generally accepted a statutory “intermediary” exclusion for mere carriage, but held the exclusion did not cover ISP caching and treated Canadian jurisdiction as turning on a “real and substantial connection” to Canada rather than server location.
- The Supreme Court of Canada heard an appeal and cross-appeal to clarify extraterritorial reach, the meaning of “communicator,” and ISP liability (including caching).

## Issues

1. When do Internet communications have a sufficient connection to Canada to attract Canadian copyright law?
2. Does transmitting musical works over the Internet constitute a “communication to the public by telecommunication,” and who is the “communicator”?
3. When do ISPs “provide only the means of telecommunication” such that they are not communicators under the intermediary exclusion?
4. Does ISP caching and other temporary technical copying create copyright liability?

## Decision

- The Court held that Canadian copyright may apply to Internet communications where there is a real and substantial connection between the communication and Canada.
- ISPs performing content-neutral intermediary functions (e.g., routing, access provision, automatic forwarding) generally “provide only the means of telecommunication” and are not primary communicators.
- Automatic, temporary caching undertaken for technical efficiency does not, by itself, remove an ISP from the intermediary exclusion or create copyright liability in ordinary Internet operations.
- ISP liability turns on function rather than the geographic location of the ISP or its infrastructure.
- The matter was returned to the Copyright Board to apply the clarified legal framework to the tariff issues.

## Legal Principles

- A statute may apply to cross-border Internet activity when the relevant communication has a real and substantial connection to the forum.
- “Communication to the public by telecommunication” focuses on the actor responsible for the communicative act; neutral transmission infrastructure is not, without more, the communicator.
- An intermediary that provides only the means necessary for another to communicate a work does not communicate the work by that act alone.
- Caching that is automatic, temporary, and purely technical is treated as part of neutral transmission and does not, without more, constitute infringement.
- Intermediaries are not subject to a general duty to monitor; exposure may arise where an intermediary goes beyond neutrality (e.g., selecting, authorizing, or controlling content) or refuses reasonable steps after clear notice and practical ability to address stored infringement.

## Conclusion

The Supreme Court of Canada adopted a real-and-substantial-connection approach for applying Canadian copyright to Internet communications and held that ISPs acting as content-neutral conduits—including through ordinary caching—are not primary infringers merely because their systems transmit or temporarily store copyrighted works.


Soc'y of Composers, Authors & Music Publishers of Can. v. Can. Ass'n of Internet Providers, [2004] 2 S.C.R. 427 (Can. 2004)