In Society of Composers, Authors and Music Publishers of Canada v. Canadian Association of Internet Providers, 2004 SCC 45 (Jun. 30, 2004), the Supreme Court of Canada examines whether ISPs are liable for copyright royalties.
First, the court examines when the Copyright Act should apply to international internet transmissions. A “real and substantial connection to Canada” is sufficient to apply the Copyright Act to international Internet transmissions. Such a connection may be found by evaluating the locations of the content provider, the host server, the intermediaries and the end user.
An ISP which acts as a common carrier should not be liable for infringement in the transmissions of copyrighted works over its network:
A content provider is not immune from copyright liability by virtue only of the fact that it employs a host server outside the country. Conversely, a host server does not attract liability just because it is located in Canada. The liability of a host server should be determined by whether or not the host server limits itself to “a conduit” (or content-neutral) function.
An ISP may create a cache copy, because as a serendipitous consequence of improvements in Internet technology, it is content neutral, and “ought not to have any legal bearing on the communication between the content provider and the end user.”
Society of Composers, Authors and Music Publishers of Canada v. Canadian Association of Internet Providers, 2004 SCC 45 (Jun. 30, 2004)