The Federal Court of Canada recently granted three large broadcasters an order for an injunction* against retailers of pre-loaded “plug-and-play” set-top boxes. The apps pre-loaded on the boxes allow consumers to access TV programs and movies without cable or other subscriptions. As Madam Justice Tremblay-Lamer observed:
These boxes have several uses for consumers, some of which are perfectly legal and some which skirt around the fringes of copyright law. This is not the first time a new technology has been alleged to violate copyright law, nor will it be the last.
In her view, the allegations in this particular instance were strong enough to support a prima facie case of copyright infringement and the injunction order. The matter will proceed to trial at a later date to resolve the various copyright and related issues.
A focus on the copyright issues
Bell, Rogers and TVA/Videotron each have exclusive rights under the Copyright Act to – in lay terms – broadcast, deliver and copy a range of TV programs and movies in Canada. The television business model relies on broadcasters’ ability to exploit these rights. The Plaintiffs argued that
pre-loaded set-top boxes represent an existential threat to [their] line of business as piracy is one of the top causes for declining subscriptions for television services in Canada and leads to annual decreases in revenue.
A central question before the Court was whether the set-top box retailers were simply the “conduit” for consumers’ infringing activities, or were instead themselves infringing copyright. The Copyright Act does provide a limited shield for “conduit” services that provide only the means to deliver copyright-protected programs, images or music:
2.4(1) For the purposes of communication to the public by telecommunication, […] (b) a person whose only act in respect of the communication of a work or other subject-matter to the public consists of providing the means of telecommunication necessary for another person to so communicate the work or other subject-matter does not communicate that work or other subject-matter to the public.
The Court found that this statutory defence was not available to the Defendants. They had, said the Court, deliberately encouraged consumers to use the set-top boxes to circumvent the broadcasters’ subscription-based services. They had promoted their set-top boxes to consumers as a means to cancel their cable subscriptions (using slogans such as “Original Cable Killer”), and had also offered tutorials on how to use the pre-loaded apps to obtain “free” programming. The Court said that these activities “went above and beyond” selling a simple piece of hardware, and instead related to the content of the copyright-protected programming. This constituted prima facie infringement.
The Court also agreed with the broadcasters that inducing and authorizing consumers to infringe copyright was an additional serious issue to be tried.
The Court’s order not only enjoins the five named retailers from continuing to configure, market and sell the pre-loaded set-top boxes; it allows the broadcasters to serve the order on other retailers who are engaged in the same activities.