The rise of online intermediaries, such as Google, Amazon, and Facebook, has radically changed the way in which many businesses and individuals operate and has introduced novel legal and business questions and challenges. It is easier and cheaper than ever for bad actors to use online tools, whether it be websites, platforms, or online profiles, to commit a variety of unlawful activities such as impersonating a business, associating themselves with a business without any such connection, or otherwise attempting to trade on the goodwill of a business. As each new platform or service is created, more opportunities exist for unlawful activity, including intellectual property (“IP”) infringement and violations. These developments have caused significant challenges for businesses seeking to enforce their IP rights and protect their brands and reputations.

Compounding such challenges is the fact that governments around the world have been playing catch up to regulate the dominant players in the digital world. While Canada is in the process of beginning to regulate online intermediaries[1], the lack of regulation means that businesses currently bear full responsibility for addressing unlawful activity that occurs through online intermediaries.

In this article, we will discuss the current options available to businesses when seeking to enforce their IP rights through online intermediaries and some ideas as to the regulation of online intermediaries.

Dealing with Online Intermediaries in Canada

In Canada, there is no overarching statutory framework that deals with the activities of online intermediaries, such as internet service providers, hosting service providers, and online platform providers (e.g., online marketplaces, social networks, content-sharing platforms, and app stores), and their handling of content made available through their platforms or as a result of their services. Rather, online intermediaries are left with the power to decide how to deal with unlawful activity that occurs through their platforms or as a result of their services.

Some online intermediaries have established mechanisms for other businesses and rights holders to protect and enforce their IP rights. For example, Facebook has established a mechanism for a business to make one or more IP complaints in the event that another entity is infringing on that business’ IP rights. A business can make an IP claim directly to Facebook in the event that another entity is using that business’ trademarks or copyrighted materials without permission through the Facebook platform.

However, not all online intermediaries have created frameworks to respond to and address IP infringement and violation matters. In other cases, businesses may have to commence expensive and time-consuming legal actions to stop online infringement or violation of their IP. For example, Bell Media Inc., Groupe TVA Inc., and Rogers Media Inc. had to commence an action in the Federal Court to require internet service providers to block certain websites that contained materials that infringed on their copyrights.[2] Although the companies obtained a positive decision from the Federal Court, the decision was subsequently appealed and it took close to two years for the matter to conclude.[3]

The lack of a statutory framework governing online intermediaries means that (i) a business’ ability to enforce its IP rights expeditiously and effectively will depend on the specific online intermediary that business is dealing with; (ii) there is a certain amount of uncertainty with respect to the enforcement of IP rights through online intermediaries; and (iii) different outcomes and costs may be associated with a business’ efforts to enforce its IP rights across multiple online intermediaries.

Protecting Canadian Businesses in the Digital Economy

In our view, Canadian businesses would benefit from certain rights being offered such as access to a notice and takedown procedure instituted by each online intermediary and entitlement to a binding out-of-court dispute resolution mechanism when dealing with online intermediaries. Further, online intermediaries should not be permitted to avoid liability if they are informed by a rights holder that their IP is being infringed upon, are presented with specific information to support that right holder’s position, and nonetheless do not remove the infringing content.

Businesses need simple and quick ways to report unlawful content available online and to have it removed. These additional rights and obligations would, in our view, encourage online intermediaries to expeditiously handle IP infringement matters and may reduce the damage that Canadian businesses may experience, whether reputational or financial when others unlawfully use or display their IP.

To date, the Government of Canada has not introduced a legal framework that would address the challenges that businesses face to enforce their IP rights in relation to online activity and is falling behind the regulatory efforts of other jurisdictions.[4] Although the Government of Canada is contemplating certain changes to the Copyright Act, any such changes would not address the range of IP infringement and other unlawful activity that generally occurs simultaneously online, whether it be the selling of counterfeit goods, distributing copyrighted materials, or impersonating another business. We hope that further regulatory efforts will be introduced by the Government of Canada to ease the challenges faced by businesses when enforcing their IP rights.

[1] From recently proposed amendments to the Broadcasting Act to address the rise of internet streaming services to the introduction of a consultation to consider reform to the Copyright Act, the Government has signalled that it intends on increasing its regulation of online intermediaries.

[2] Bell Media Inc. v GoldTV.Biz, 2019 FC 1432

[3] The case was appealed to the Federal Court of Appeal. See Teksavvy Solutions Inc. v Bell Media Inc., 2021 FCA 100. Neither party brought an application for leave to appeal this decision.

[4] For a discussion on international trends concerning intermediary liability, see “Intermediary Liability and Online Trade Mark Infringement: Emerging International Common Approaches”, by Frederick Mostert.