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Tuesday January 12, 2010
World's Fair Use Day: Much Work Left in Canada
Today Public Knowledge is sponsoring World's Fair Use Day, described as a day to celebrate the doctrine of fair use and the benefits it brings to creators, innovators, and consumers.  As many readers will know, Canada does not have a fair use provision but rather one called fair dealing.  Given the focus on fair use, it is worth considering both the breadth of fair dealing in Canada as well as its limits.  For those supportive of fair dealing, the good news is that the Supreme Court of Canada has ruled that it is a user right.  In CCH Canadian v. Law Society of Upper Canada, a unanimous court ruled: Before reviewing the scope of the fair dealing exception under the Copyright Act, it is important to clarify some general considerations about exceptions to copyright infringement.  Procedurally, a defendant is required to prove that his or her dealing with a work has been fair; however, the fair dealing exception is perhaps more properly understood as an integral part of the Copyright Act than simply a defence. Any act falling within the fair dealing exception will not be an infringement of copyright.  The fair dealing exception, like other exceptions in the Copyright Act, is a user’s right.  In order to maintain the proper balance between the rights of a copyright owner and users’ interests, it must not be interpreted restrictively. 
Treating fair dealing as a user right was a crucially important milestone that breathed new relevance into the provision.  However, fair dealing only applies to a limited list of categories, namely research, private study, news reporting, criticism, and review.  While this list can be interpreted broadly (ie. the Copyright Board treated song samples as consumer research), there are still many common activities that are not strictly permitted under Canadian copyright law:
  • For creators, this means no protection for parody or satire.
  • For educators, this means no protection for teaching.
  • For innovators, it means no protection for many innovative business models and new technologies.
  • For archivers, it means limited protection for digitization.
  • For consumers, it means no protection for recording television shows, backing up a DVD, format shifting from a DVD to video player, or transferring music from a CD to an iPod.
These limits should not be underestimated as they unquestionably have a stagnating effect on innovation, a chilling impact on creators, and create uncertainty for consumers, students, and businesses.  So as we celebrate the breadth of fair use (dealing), let's not forget that reform is needed to ensure that the benefits of a balanced fair dealing provision accrue to all.
Today Public Knowledge is sponsoring World's Fair Use Day, described as a day to celebrate the doctrine of fair use and the benefits it brings to creators, innovators, and consumers.  As many readers will know, Canada does not have a fair use provision but rather one called fair dealing.  Given the focus on fair use, it is worth considering both the breadth of fair dealing in Canada as well as its limits.  For those supportive of fair dealing, the good news is that the Supreme Court of Canada has ruled that it is a user right.  In CCH Canadian v. Law Society of Upper Canada, a unanimous court ruled:

Before reviewing the scope of the fair dealing exception under the Copyright Act, it is important to clarify some general considerations about exceptions to copyright infringement.  Procedurally, a defendant is required to prove that his or her dealing with a work has been fair; however, the fair dealing exception is perhaps more properly understood as an integral part of the Copyright Act than simply a defence. Any act falling within the fair dealing exception will not be an infringement of copyright.  The fair dealing exception, like other exceptions in the Copyright Act, is a user’s right.  In order to maintain the proper balance between the rights of a copyright owner and users’ interests, it must not be interpreted restrictively. 

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Wednesday August 26, 2009
How Does Canada's Digital Music Market Really Stack Up?

CRIA's Graham Henderson has posted an op-ed in the Georgia Straight in which he repeats many of his comments from an earlier copyright consultation roundtable. Henderson points to U.S. sales and new services Europe such as Spotify and Nokia's Comes With Music to support his claim is that Canada is falling far behind its counterparts in the digital music sales and services.  In Canada, he says the choice is just between iTunes and illegal (it is rather amazing to see the person who launched Puretracks now ignore it).

Yet Henderson's claims simply don't stand up to scrutiny.  First, digital music sales as a percentage of total sales in Canada is ahead of every major European country. While the U.S. is indeed ahead of Canada, the IFPI reports that Canada is ahead of France, Britain, Spain, Belgium, Italy, Germany, Switzerland, the Netherlands, Austria, Sweden, Czech Republic, Finland, Greece, Hungary, Norway, Poland, Portugal, and Russia.  Canada also leads countries such as Australia, New Zealand, Hong Kong, Singapore, Taiwan, Mexico, Argentina, Brazil, and South Africa (percentage of digital sales are highest in countries where physical sales are virtually non-existent such as Indonesia and China). In fact, of the top 20 global markets for recorded music, the IFPI says that Canada ranks 5th for the percentage of digital sales.  Overall, Canada's digital market stands 7th worldwide, while ranking 6th for all recorded music - in other words, about what you would expect. Not exactly the laggard that CRIA claims.

Second, Canada trails the U.S. in the digital sales as a percentage of total sales, but digital music sales growth in Canada has outperformed the U.S. for the past three years according to Nielsen Soundscan data. Indeed, the IFPI notes that Canada's growth rate is ahead of the global average. In comparing with the U.S., Canada is starting from a lower base, but Apple iTunes launched much later in Canada and it has failed to seriously target French language music sales (effectively cutting out a chunk of the Canadian market).

Third, recent reports note that services like Spotify are promoted by the major labels who hold an ownership stake, but artists actually receive very little.  Moreover, Canada has been home to new services such as SpiralFrog, which launched in Canada before the U.S.

Fourth, Canada's private copying levy has provided hundreds of millions of dollars in compensation for personal, non-commercial copying that may include downloading.  Given that revenue, it should come as little surprise to find that many groups representing artists are focused on retaining or expanding the levy as their key issue, not the reforms promoted by CRIA.

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U.S. List Unfairly Tarnishes Canada's Digital Reputation

Submitted by administrator on May 4, 2009 - 2:03pm
Teaser: 
Each April, the U.S. releases the Special 301 Report, which examines the intellectual property laws of its main trading partners. For the past fourteen years, Canada has been included on the list of countries the U.S. believes need reform.
Date Published: 
Monday, 4 May 2009
Publisher: 
Toronto Star
Description: 
ustr special 301 column

Peeking Behind the Wall of Canada's Copyright Complaint Against China

Submitted by administrator on February 9, 2009 - 11:56am
Teaser: 
Late last month, the World Trade Organization released a much-anticipated decision involving a U.S.-led complaint against China over its intellectual property laws. Canada was among a number of countries that participated in the case, which alleged that China’s domestic laws, border measures, and criminal penalties for intellectual property violations do not comply with its international treaty obligations.
Date Published: 
Monday, 9 February 2009
Publisher: 
Toronto Star
Description: 
canada's china complaint wto
Wednesday February 14, 2007
In Good Company
The International Intellectual Property Alliance - a group that brings together several U.S. lobby groups including the MPAA, RIAA, BSA, the ESA, and publisher groups, has just released its Section 301 recommendations, a submission to the U.S. Trade Representative that frequently serves as a blueprint for U.S. commentary on intellectual property protection around the world.  The list covers 60 countries, including most of the world's leading economies.  The USTR report, which will be released in April, will likely mirror the IIPA recommendations. Canada figures prominently on this list and indeed this year it is expected that the U.S. will escalate the pressure by placing us on the Priority Watch List.  The Globe and Mail gives the lobby groups' recommendations front page coverage with dire warnings for Canada (the coverage is matched in other countries - see Taiwan and Thailand as examples).  The IIPA submission on Canada includes a litany of complaints, including the failure to implement the WIPO Internet Treaties, the need for ISPs to play a greater role in dealing with copyright infringement, the need for a camcorder law, and the need for greater enforcement activity.  The IIPA report is particularly critical of Bill C-60, arguing that Canada should "jettison" the approach in favour of something, well, like the U.S. has implemented.  In fact, it incorrectly argues that full compliance with the WIPO Internet treaties requires legislation that matches the DMCA (full TPM protection, ban on devices that can be used to circumvent, limited exceptions).  It also wants the scope of the private copying limited and clear liability for P2P services established.  In fact, it even attacks Bill C-60's tepid distance learning and library loan provisions, arguing that they "would have had a significant detrimental impact on publishers of scientific, technical, and medical materials." While the IIPA recommendations have predictably led to negative, overblown press coverage in Canada, a little context is needed. The reality is that the majority of the world's biggest economies face similar criticism, including:
  • Japan is criticized for a wide range of issues including the absence of statutory damages, copyright term extension, stronger TPM protection, narrowing private use exceptions, and the establishment of camcording legislation
  • Sweden receives special mention for widespread Internet piracy and being host to thePirateBay.org
  • New Zealand is criticized for its copyright reform bill, which, much like Canada's Bill C-60, adopts a more balanced approach to TPMs.  For its effort, the government is also incorrectly told that the proposal "fall far short of meeting international minimum standards."  Moreover, the bill's time shifting provisions are criticized, despite the fact that the U.S. has far more liberal fair use provisions.
  • Switzerland is criticized for its TPM approach, which apparently does not meet the standard in the EUCD or the DMCA, along with a broad private copying provision and the need for camcording legislation.
  • South Africa is criticized for failing to sign the WIPO Internet treaties
  • Hong Kong is criticized for its approach on TPMs and for proposing new exceptions for educational purposes. It is also urged to extend the term of copyright.
  • South Korea is criticized for its TPM approach, education exceptions, its private copying system, and for failing to extend the term of copyright.
  • Israel is criticized for failing to implement TPM legislation and for considering a fair use provision that mirrors the U.S. approach (the IIPA claims this might be viewed by the public as a "free ticket to copy.")
  • Mexico is criticized for its TPM approach and for the absence of an ISP notice and takedown system
  • Italy is criticized for doubt about its TPM approach and for failing to establish an ISP notice and takedown system
  • Brazil is criticized for failing to ratify the WIPO Internet treaties and for granting exceptions to university students
  • Greece is criticized for making it difficult to obtain the personal identities of ISP subscribers and for levying a surcharge at movie theatres that are used to support Greek films
  • Spain is criticized for failing to place sufficient liability on ISPs for activity on their networks
  • India is criticized for its TPM provisions and "overly broad" exceptions
These are just fourteen examples - there are dozens more countries on the list, including many developing countries, each invariably criticized for not adopting the DMCA, not extending the term of copyright, not throwing enough people in jail, or creating too many exceptions to support education and other societal goals.  In fact, the majority of the world's population finds itself on the list, with 23 of the world's 30 most populous countries targeted for criticism (the exceptions are Germany, Ethiopia, Iran, France, the UK, Congo, and Myanmar).

The U.S. approach is quite clearly one of "do what I say, not what I do" (fair use is good for the U.S., but no one else), advising country after country that it does not meet international TPM standards (perhaps it is the U.S. that is not meeting emerging international standards), and criticizing national attempts to improve education or culture through exceptions or funding programs.  Moreover, it is very clear that the U.S. lobby groups are never satisfied as even those countries that have ratified the WIPO treaties or entered into detailed free trade agreements with the U.S. that include IP provisions still find themselves criticized for not doing enough. 

Canadians should not be deceived into thinking that our laws are failing to meet an international standard, no matter what U.S. lobby groups or the Globe and Mail say.  Rather, Canadians should know that our approach - and the criticism that it inevitably brings from the U.S. - places us in very good company.
iipa report on canada
The International Intellectual Property Alliance - a group that brings together several U.S. lobby groups including the MPAA, RIAA, BSA, the ESA, and publisher groups, has just released its Section 301 recommendations, a submission to the U.S. Trade Representative that frequently serves as a blueprint for U.S. commentary on intellectual property protection around the world.  The list covers 60 countries, including most of the world's leading economies.  The USTR report, which will be released in April, will likely mirror the IIPA recommendations.

Canada figures prominently on this list and indeed this year it is expected that the U.S. will escalate the pressure by placing us on the Priority Watch List.  The Globe and Mail gives the lobby groups' recommendations front page coverage with dire warnings for Canada (the coverage is matched in other countries - see Taiwan and Thailand as examples).  The IIPA submission on Canada includes a litany of complaints, including the failure to implement the WIPO Internet Treaties, the need for ISPs to play a greater role in dealing with copyright infringement, the need for a camcorder law, and the need for greater enforcement activity.  The IIPA report is particularly critical of Bill C-60, arguing that Canada should "jettison" the approach in favour of something, well, like the U.S. has implemented.  In fact, it incorrectly argues that full compliance with the WIPO Internet treaties requires legislation that matches the DMCA (full TPM protection, ban on devices that can be used to circumvent, limited exceptions).  It also wants the scope of the private copying limited and clear liability for P2P services established.  In fact, it even attacks Bill C-60's tepid distance learning and library loan provisions, arguing that they "would have had a significant detrimental impact on publishers of scientific, technical, and medical materials."

While the IIPA recommendations have predictably led to negative, overblown press coverage in Canada, a little context is needed. The reality is that the majority of the world's biggest economies face similar criticism, including:
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Monday February 12, 2007
CPCC Goes For Broke, Part One
A remarkable week in music that started with the Steve Jobs call to drop DRM, followed by speculation that EMI will drop DRM, concluded with another critically important development - the Canadian Private Copying Collective, which administers the private copying levy, has asked the Copyright Board to increase the levy on blank CDs and add levies to electronic media cards (storage media) such as SD cards as well as digital audio players such as the Apple iPod.  There is much to consider here, which I will divide between the specific issues raised by the tariff application and the bigger story that is at work. On the specific tariff application, I think the CPCC is going to have a tough time convincing the Copyright Board (and almost certainly the federal court) that the levy increases and extensions to other media are warranted.  The blank CD increase represents an astonishing request as the CPCC is now openly asking that more than half of the retail price of blank CDs to be comprised of levy costs.  A backgrounder on the CPCC notes that blank CDs cost about 50 cents and that the levy currently comprises 21 cents of that cost.  That is an enormous cost - 42 percent - and the collective wants to increase that by an additional 28 percent.  This is a staggering market distortion that will obviously face very stiff opposition. The proposal to extend the levy to storage media and Apple iPods also face an uphill climb. The storage media usage data simply does not come close to supporting a levy.  The CPCC's FAQ says that its surveys suggest that 25 percent of content copied onto these cards is music and that 20 percent of people say that the last time they copied onto an electronic memory card, the content was music.   Put another way, 75 percent of content copied onto these cards is not music and 80 percent of people say that the content they last copied onto these cards was not music. These results are obvious to anyone who owns a digital camera, but apparently not to the CPCC.  While the Copyright Board's definition of ordinary use opens the door to considering storage media, this represents bad, market-distorting policy that (if approved) would force the 80 percent of non-music copiers to subsidize the 20 percent of music copiers. The attempt to extend the levy to Apple iPods is similarly flawed.

Leaving aside the fact that a court already struck down that levy, the CPCC argues that its revised definition of a digital audio recorder "is intended to excluded cellular phones, PDAs (such as Palm Pilots), or personal computers that also have embedded memory and can record and play music. However, the definition is intented to include Digital Audio Recorders that may also have secondary uses, such as calendar or address book functions, radio reception, data storage, etc."  The CPCC then argues that iPods would be subject to the tariff because they are music focused even though they store photos and play videos.  These distinctions appear to be me to be fatally flawed - is the Apple iPhone captured by the levy?  the Blackberry Pearl?  All of these offer music functionality but are not the primary use (I would argue that in my own experience music is no longer the primary use of the Video iPod either).

Much has changed since Palm last called their PDA's "Palm Pilots" (that would be 1998) and with the rapid convergence of devices, just about everything can be used to play music, record music, and do dozens of other things.  Establishing a levy on these devices is likely to regularly miss the target as the tariff definition - "a medium that is designed, manufactured, advertised and primarily used for copying sound recordings of musical works and is capable of being used to play sound recordings of musical works" - will catch devices it shouldn't and miss those that it should.

The CPCC claims that there is broad public support for the levy increases, but this is based on dubious survey data from Environics.  As I pointed out when the survey was first reported, the majority of survey respondents had never even copied music and were therefore ill-suited to render informed opinions about the levy.  Further, the survey left so many questions unanswered that it does nothing to improve our understanding of these issues.  Indeed, there is no doubt that the opposition to this levy will be fierce as every major device, cellphone, and camera manufacturer will join forces with retailers and storage manufacturers to oppose the levy.

There will understandably be considerable hand wringing over this latest proposal, yet it is only the opening salvo in what is likely to be years of hearings before the Copyright Board and the courts.  In my view, far more important is the bigger story at work here, as faced with the possible pressure of eliminating the levy altogether and the mounting desire for an alternative compensation system for P2P file sharing, the CPCC has chosen to go for broke and ask for millions more in levies over the likely objection of some its own board members.  More on this part of the story tomorrow.

cpcc private copying levy

A remarkable week in music that started with the Steve Jobs call to drop DRM, followed by speculation that EMI will drop DRM, concluded with another critically important development - the Canadian Private Copying Collective, which administers the private copying levy, has asked the Copyright Board to increase the levy on blank CDs and add levies to electronic media cards (storage media) such as SD cards as well as digital audio players such as the Apple iPod.  There is much to consider here, which I will divide between the specific issues raised by the tariff application and the bigger story that is at work.

On the specific tariff application, I think the CPCC is going to have a tough time convincing the Copyright Board (and almost certainly the federal court) that the levy increases and extensions to other media are warranted.  The blank CD increase represents an astonishing request as the CPCC is now openly asking that more than half of the retail price of blank CDs to be comprised of levy costs.  A backgrounder on the CPCC notes that blank CDs cost about 50 cents and that the levy currently comprises 21 cents of that cost.  That is an enormous cost - 42 percent - and the collective wants to increase that by an additional 28 percent.  This is a staggering market distortion that will obviously face very stiff opposition.

The proposal to extend the levy to storage media and Apple iPods also face an uphill climb. The storage media usage data simply does not come close to supporting a levy.  The CPCC's FAQ says that its surveys suggest that 25 percent of content copied onto these cards is music and that 20 percent of people say that the last time they copied onto an electronic memory card, the content was music.   Put another way, 75 percent of content copied onto these cards is not music and 80 percent of people say that the content they last copied onto these cards was not music. These results are obvious to anyone who owns a digital camera, but apparently not to the CPCC.  While the Copyright Board's definition of ordinary use opens the door to considering storage media, this represents bad, market-distorting policy that (if approved) would force the 80 percent of non-music copiers to subsidize the 20 percent of music copiers.

The attempt to extend the levy to Apple iPods is similarly flawed.

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Monday December 11, 2006
Digital Info Strategy Requires Courage Before Cash
My weekly Law Bytes column (Toronto Star version, homepage version) examines efforts in Canada to develop a national digital information strategy in light of a national summit on the issue held last week in Montebello, Quebec.  The column notes that the good news is that many provincial governments and organizations are not waiting for Ottawa to act, citing initiatives by the Alberta and Quebec governments, Alouette Canada, Synergies, the McCord Museum, and the blossoming of user generated content. This enormous energy suggests that digitization will flourish regardless of whether Prime Minister Stephen Harper, Industry Minister Maxime Bernier, and Canadian Heritage Minister Bev Oda adopt a formal strategy.  However, despite the good news, the summit also left little doubt that there are immediate steps that can be taken to pave the way for even more. In fact, I argue that the federal government would do well to resist introducing expensive new initiatives by first maximizing the benefits that can be extracted from the current set of policies and programs.

For example, Canada spends hundreds of millions of dollars each year on research funding through its three federal granting institutions in the health, sciences, and social science fields.  The government should mandate an open access model that would require that all taxpayer-funded research be made available to the public at no charge within six months of initial publication.

Ottawa could also amend the legal deposit program that requires all Canadian publishers to provide the National Library with two copies of every newly published book.  By expanding the program’s requirements to also include a digital copy, the government would effortlessly build a digital library featuring thousands of new books.

The government could also address some relatively non-controversial copyright issues that currently pose significant access barriers to digital information.  Crown copyright should be dropped and a new policy for orphan works would also foster greater digital access by removing the risk associated with using older works that have not yet entered the public domain. Although more contentious, an expansion of the Copyright Act's fair dealing provision would help open the floodgates to private sector digitization programs. The presence of a broader "fair use" provision in the U.S. has convinced Google to partner with nearly a dozen leading universities to digitize millions of books.  A parallel Canadian provision could similarly stimulate digital access initiatives with Canadian partners.

As the summit drew to a close, several participants noted that this effort should not be viewed as a digital strategy for Canada, but rather as a strategy for a digital Canada.  Indeed, digitization is already here, forever changing the way we communicate, educate, and compete in the global marketplace.

digital information strategy column

My weekly Law Bytes column (Toronto Star version, homepage version) examines efforts in Canada to develop a national digital information strategy in light of a national summit on the issue held last week in Montebello, Quebec.  The column notes that the good news is that many provincial governments and organizations are not waiting for Ottawa to act, citing initiatives by the Alberta and Quebec governments, Alouette Canada, Synergies, the McCord Museum, and the blossoming of user generated content.

This enormous energy suggests that digitization will flourish regardless of whether Prime Minister Stephen Harper, Industry Minister Maxime Bernier, and Canadian Heritage Minister Bev Oda adopt a formal strategy.  However, despite the good news, the summit also left little doubt that there are immediate steps that can be taken to pave the way for even more.

In fact, I argue that the federal government would do well to resist introducing expensive new initiatives by first maximizing the benefits that can be extracted from the current set of policies and programs.

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