The Supreme Court of Canada, Canada's highest court in SOCAN v. Canadian Association of Internet Providers 2004 SCC 45 (SCC) held that Internet Providers were not liable to pay tarriffs to SOCAN via Tariff 22 because they are only providing the means of telecommunication as provided by section 2.4(1)(b) of the Copyright Act and are not the "conduit" by which music is downloaded on the Internet without payment. The Court further held that if music is downloaded from a server outside of Canada onto a user's computer located in Canada, then the Internet transmission has occurred at least in the country of reception and the country of transmission and this is a sufficient connection to Canada for potential liability. The court further held that an ISP is not liable just because they know that someone might be downloading music; however, an ISP might be liable if an ISP becomes aware of infringing content on its server and does nothing about it - but all would depend upon the facts.

What is an ISP to make of this? This case suggests that the most prudent course for an ISP to take is to maintain its position as a provider of the means of communication (and not a reviewer of all material posted on its servers ) but to have a procedure in place (i.e. the Canadian Association of Internet Providers's Code of Conduct ) to deal effectively when it becomes aware of infringing content on its servers.

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