Skip to Content

cria

Friday April 29, 2011
Wikileaks on CRIA and the U.S. Government: How They Combine to Lobby on Canadian Copyright
One of the most interesting revelations in the newly released Wikileaks cables is the close connection between the U.S. government and the Canadian Recording Industry Association on in lobbying the Canadian government on copyright reform.  Several cables reveal private meetings, access to internal documents, and strategy discussions.  For example, a 2006 cable discusses efforts to convince Canada to join the U.S. WTO complaint against China (I wrote about the case here and here). The cable notes that embassy officials met with CRIA's Graham Henderson to discuss "the U.S. Government's role in encouraging the Government of Canada to pass legislation implementing the WIPO Internet Treaties." Henderson also used the meeting to reveal the results of a private Canadian government consultation meeting on China and provided a private CRIA analysis on the case. The cable concludes that "CRIA is leading the charge to get the GOC to join the US case."
cria and wikileaks
Content Country: 
Canada
Post Category: 
Blog

One of the most interesting revelations in the newly released Wikileaks cables is the close connection between the U.S. government and the Canadian Recording Industry Association on in lobbying the Canadian government on copyright reform.  Several cables reveal private meetings, access to internal documents, and strategy discussions. 

For example, a 2006 cable discusses efforts to convince Canada to join the U.S. WTO complaint against China (I wrote about the case here and here). The cable notes that embassy officials met with CRIA's Graham Henderson to discuss "the U.S. Government's role in encouraging the Government of Canada to pass legislation implementing the WIPO Internet Treaties." Henderson also used the meeting to reveal the results of a private Canadian government consultation meeting on China and provided a private CRIA analysis on the case. The cable concludes that "CRIA is leading the charge to get the GOC to join the US case."

Add Comment (0) Tags (5)
Friday June 18, 2010
Copyright Lobby Astroturf Site Adds Mandatory, Uneditable Letter to MPs
The copyright lobby's BalancedCopyrightforCanada.ca astroturfing site has added a new mandatory requirement for all users that want to participate in the Take Action items. According to a site user, the site now requires users to send a form letter to their relevant Member of Parliament.  There are two letter options - one letter for entertainment industry employees and one general letter. 

Surprisingly for a site claiming to support creativity and copyright, the letters do not provide users with the opportunity to even use their own words - the form letter cannot be edited.  This is particularly striking given the earlier criticism from some of the same groups on a CCER form letter service that offered users complete control over the substance of their letter and merely served as a delivery channel. Notably, the site has already been subject to gaming from non-Canadians as a random search of members turned up at least one U.S. based record company executive with Warner Music.

The site user reports that the site briefly offered a third form letter for consumers.  That letter has apparently been removed, perhaps because it adopted positions expressly opposed by Canadian creator groups.  While the site purports to protect creator rights, the letter supported format shifting without levies (opposed by groups such as ACTRA) and educational reforms to fair dealing (opposed by writers groups).  The consumer letter included the following:


I believe the Copyright Act amendments proposed in Bill C-32 do a good job of balancing the right of artists and creators to benefit financially from their work, and the ability of consumers like me to make copies for non-commercial use and personal enjoyment. If Bill C-32 passes, it will give me the peace of mind of knowing that when I take music I've purchased and downloaded online, and copy it to my player, it's legal. There will be no doubt in my mind that the PVR copy of a movie or the episode of my favourite TV show that I've made for later viewing doesn't infringe copyright. And, I will know that my favourite singers, musicians, and film makers have been financially and fairly compensated for their work and creativity.

Also, I think Bill C-32 does the right thing in allowing schools, colleges, and universities to make copies for educational purposes. This is as it should be. Teachers and professors should feel free to make legal use of audio and video to broaden their students' cultural and intellectual horizons. Bill C-32 will enhance learning.

As it is now, the situation in Canada is embarrassing. The failure to modernize Canada's Copyright Act has made our country a destination of choice for virtual pirates of digital music, worldwide. Canada's reputation for upholding copyright and intellectual property rights is being reduced to the lowest common denominator of copyright rogue countries. Canada's brand is being compromised with our largest and most valuable trading partners, and their investors. Is that in Canadian consumers' interests? Is it in the interests of Canada's music industry? Is it in the interests of the Canadian Government and the Parliament of Canada? Is it good for Canada?

Bill C-32 is about fairness and balance: fairness to artists and other creators of content, balanced by fairness to consumers who get pleasure and relaxation from their work, and to teachers and students.

Samples from the employee and general letters are posted below:

Employee Letter

I support a balanced, modern and effective Copyright Act in Canada. The recent introduction of Bill C-32 is a starting point to achieve this long-overdue goal.

As the employee of a business that depends on sales of creative content, I urge your support in Parliament to enact the copyright reforms our country needs. My job, and many thousands of other jobs, depend on it.

Canada produces some of the best movies, music, TV shows, software and books in the world. Like many Canadians, I am proud of that. But the creative industries we have built are increasingly at risk in the face of widespread digital piracy.

I believe that artists, other content creators and the people who invest in them have the right to be compensated for their creations. People like me, who work in the creative industries and pay taxes, earn our pay as well. We all deserve a law that protects creative works from theft and unauthorized use on the Internet. Our customers deserve a law that respects and promotes the legal purchase and enjoyment of copyrighted works.

With the tabling of Bill C-32, Parliament has a real opportunity to bring our copyright rules into the digital age. With the right amendments, we can get there.

In the absence of clear rules, Canadian consumers lack a clear signal that downloading digital products from the Internet without payment is not allowed. The operators of Canadian-based websites that encourage and profit from much of the world's online piracy seem to act as if there were no law at all. As a result, Canada has become a global destination of choice for the operators of pirate websites.

It's embarrassing. Canada has been singled out on the international stage for its failure to uphold intellectual property rights, joining the ranks of copyright rogue countries. Our brand has been compromised with our largest and most valuable trading partners, and their investors.

Copyright reform is about fairness and balance: fairness to artists and other content creators balanced by fairness to consumers who enjoy and use their work.

General Letter

I support a balanced, modern and effective Copyright Act in Canada. The recent introduction of Bill C-32 is a starting point to achieve this long-overdue goal.

As a voter who lives in your riding, I urge your support in Parliament to enact the copyright reforms our country needs.

I believe that artists, other content creators and the people who invest in them have the right to be compensated for their creations. They deserve a law that protects their work from theft and unauthorized use on the Internet. The law should also respect and promote the legal purchase and enjoyment of copyrighted works by consumers.

With the tabling of Bill C-32, Parliament has a real opportunity to bring our copyright rules into the digital age. With the right amendments, we can get there.

In the absence of clear rules, Canadian consumers lack a clear signal that downloading digital products from the Internet without payment is not allowed. The operators of Canadian-based websites that encourage and profit from much of the world's online piracy seem to act as if there were no law at all. As a result, Canada has become a global destination of choice for the operators of pirate websites.

It's embarrassing. Canada has been singled out on the international stage for its failure to uphold intellectual property rights, joining the ranks of copyright rogue countries. Our brand has been compromised with our largest and most valuable trading partners, and their investors.

Copyright reform is about fairness and balance: fairness to artists and other content creators balanced by fairness to consumers who enjoy and use their work.

As a voter in your riding, I urge you to build on the start provided by Bill C-32's introduction, and to advance the passage of Copyright Act amendments that work for all Canadians.
Add Comment (0) Tags (11)
Wednesday June 16, 2010
The Copyright Lobby's Astroturf Campaign in Support of C-32
The copyright lobby, almost certainly led by the Canadian Recording Industry Association, has launched a major astroturf campaign in which it hopes to enlist company employees to register their support for Bill C-32 and to criticize articles or comments that take issue with elements of the proposed legislation. The effort, which even includes paid placement of headlines on Bourque.com, is still shrouded in some secrecy.  A member list, which featured many record company executives, has now disappeared from public view.  Requests to identify who is behind the site have been stonewalled thus far, with both ACTRA and AFM Canada explicitly stating they are not part of the site (this is no surprise since most creator groups have been critical of C-32). The heart of the site (which requires full registration) is a daily action item page that encourages users to "make a difference, everyday."  Today's list of 10 items is a mix of suggested tweets, blog comments, and newspaper article feedback.  Each items includes instructions for what should be done and quick link to the target site.  For example, users are asked to respond on Twitter to re-tweets of an op-ed by Dalhousie law professor Graham Reynolds.  The suggested response is "As an employee in entertainment, this Bill will protect your livelihood" or "The discussion around DRMs is largely fear mongering." Other suggested twitter activity includes twittering in support of James Moore and his comment that the Chamber of Commerce represents the best interests of consumers or to start following MPs on Twitter (in the hope they will follow back and later see astroturfed tweets). The site also encourages posting comments on a wide range of articles and interviews.  For example, users are encouraged to comment on a Torontoist article on C-32 with the following points: The article completely overstates the expected prevalence of DRMs DRMs have faded quickly from the music industry- why would producers/artists hide their work? There are a whole list of exceptions in the Bill, none of which Michael Geist and his Bit Torrent followers acknowledge
A Calgary Herald op-ed on the concerns with C-32 generates the following suggested response:
  • Artists, other content creators, and the people who invest in them deserve a law that protects their work from theft and unauthorized use on the Internet;
  • Canada has become a global destination of choice for the operators of pirate websites;
  • Bill C-32 is a good first step in creating balanced copyright laws for Canada;
There are suggested responses to audio interviews as well.  For an interview CRIA's Graham Henderson did on CBC Radio, users are encouraged to "listen to the interview, share it with your friends on Facebook, link to it on your Twitter account and post a comment in the comment section underneath the audio file."  As for Industry Minister Tony Clement's interview on Search Engine, users are encouraged to post comments on the TVO site stating:
  • TPMs are used to help creators of digital content – books, games, movies, software and music – to protect their creations from unauthorized copying;
  • TPMs also enable innovative new digital offerings that give consumers more choice in how they buy digital content;
  • For about $10 a month, music fans can access literally millions of songs on streaming music services. But they don’t own the songs;
  • Other fans prefer TPM-free a la carte downloads for about $10 an album. Without TPMs, it simply would not be possible to offer new choices to consumers;
  • The measures in Bill C-32, the government’s copyright reform legislation, add a measure of legal protection against breaking “digital locks.” Without these provisions, digital content would effectively lose all protection, and innovative digital offerings would disappear. The creators of music, books, games, movies, and software – and their investors – would be left high and dry.
All of these are just today's instructions, with new activities promised on a daily basis. This secret astroturf effort is unlikely to fool many people, but it is worth monitoring and serves as a useful reminder that Canadians seeking fair copyright in Canada will need to ensure that their voices are heard and not drowned out by this organized, shadowy campaign.
The copyright lobby, almost certainly led by the Canadian Recording Industry Association, has launched a major astroturf campaign in which it hopes to enlist company employees to register their support for Bill C-32 and to criticize articles or comments that take issue with elements of the proposed legislation. The effort, which even includes paid placement of headlines on Bourque.com, is still shrouded in some secrecy.  A member list, which featured many record company executives, has now disappeared from public view.  Requests to identify who is behind the site have been stonewalled thus far, with both ACTRA and AFM Canada explicitly stating they are not part of the site (this is no surprise since most creator groups have been critical of C-32).

The heart of the site (which requires full registration) is a daily action item page that encourages users to "make a difference, everyday."  Today's list of 10 items is a mix of suggested tweets, blog comments, and newspaper article feedback.  Each items includes instructions for what should be done and quick link to the target site.  For example, users are asked to respond on Twitter to re-tweets of an op-ed by Dalhousie law professor Graham Reynolds.  The suggested response is "As an employee in entertainment, this Bill will protect your livelihood" or "The discussion around DRMs is largely fear mongering." Other suggested twitter activity includes twittering in support of James Moore and his comment that the Chamber of Commerce represents the best interests of consumers or to start following MPs on Twitter (in the hope they will follow back and later see astroturfed tweets).

The site also encourages posting comments on a wide range of articles and interviews.  For example, users are encouraged to comment on a Torontoist article on C-32 with the following points:
  • The article completely overstates the expected prevalence of DRMs
  • DRMs have faded quickly from the music industry- why would producers/artists hide their work?
  • There are a whole list of exceptions in the Bill, none of which Michael Geist and his Bit Torrent followers acknowledge
Add Comment (0) Tags (7)
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.

Add Comment (2) Tags (7)
Thursday August 6, 2009
Manitoba Music Industry Association Distances Self From CRIA On Copyright Reform

The Winnipeg copyright roundtable is a must-listen as it includes some notable comments from the Manitoba Music Industry Association.  After numerous presentations at the roundtable calling for expanded fair dealing (from education, researchers, and artists), the MMIA argued:

We find ourselves in the Manitoba music industry more aligned with some of the creators coalitions and independent music groups and less aligned with CRIA and the RIAA.  Our members are generally speaking are not interested in anti-circumvention laws, they are not interested in suing fans.  No one from our membership is going to go out and sue fans because they copied some of their music.  What they are interested in is finding ways of monetizing the creative content.

With the songwriters and many Canadian musicians already distancing themselves from CRIA, it is interesting to even find a provincial music industry association doing the same.

Add Comment (0) Tags (8)
Wednesday June 24, 2009
Unravelling the Canadian Copyright Policy Laundering Strategy

The Conference Board of Canada plagiarism and undue influence story - which with the Board's report and overdue apology to Curtis Cook will now go on hiatus until new reports are issued in the fall - has obviously attracted considerable interest.  Looking back, while plagiarism is rare, it is the public airing of the copyright lobby policy laundering effort that is the far more important development. 

This lengthy post seeks to unravel the effort further by demonstrating how there has been a clear strategy of deploying seemingly independent organizations to advance the same goals, claims, arguments, and recommendations.  Over the past three years, this strategy has played out with multiple reports, each building on the next with a steady stream of self-citation.  The following diagram highlights the key players:



Although there are many groups involved in copyright lobbying, at the heart of the strategy are two organizations - the Canadian Recording Industry Association and the Canadian Motion Picture Distributors Association.  CRIA's board is made up the four major music labels plus its director, while the CMPDA's board is comprised of representatives of the Hollywood movie studios.  Those same studios and music labels provide support for the International Intellectual Property Association, which influences Canadian copyright policy by supporting U.S. government copyright lobby efforts. 

In addition to their active individual lobbying (d, CRIA and CMPDA have provided financial support for three associations newly active on copyright lobbying - the Canadian Anti-Counterfeiting Network, the Canadian Chamber of Commerce's IP Council, and the Ontario Chamber of Commerce (there are other funders including pharmaceutical companies and law firms).  Those groups have issued virtually identical reports and in turn supported seemingly independent sources such as the Conference Board of Canada and paid polling efforts through Environics.

The net effect has been a steady stream of reports that all say basically the same thing, cite to the same sources, make the same recommendations, and often rely on each other to substantiate the manufactured consensus on copyright reform.  The relevant reports are as follows:

Just how similar are these reports?  First consider some sample recommendations (note particularly the Ontario Chamber and Conference Board recommendations which include arguable plagiarism problems):

Recommendation
 CACN
 Ontario Chamber
 IP Council
 Conference Board
Create an IP Council
 Establish a federal Intellectual Property Coordination Council consisting of senior civil servants and IP rights holders whose key objectives would include:
(i) creating and implementing educational programs, with emphasis on Canadian youth, that teach the rationale for and importance of intellectual property;
(ii) communicating with IP right holders to ensure that their IP needs are being met by the current application of the laws;

IP Inter-Ministerial Coordination Council:
- comprising high-level representatives from ministries involved in innovation and intellectual property rights protection (Ministry of Research and Innovation, Ministry of Economic Development and Trade, Ministry of Education and Ministry of Finance) partnered with key industry stakeholders
- will be responsible for creating policy programs to promote the protection of IP and increase innovative capacity, such as education programs targeting youth as well as an awareness campaign for businesses and consumers

 Establish an Intellectual Property Rights Coordination Council consisting of senior government officials, representatives from the business community, and IP rights holders. The Council should develop and implement a robust IPR framework that promotes the creation and exploitation of innovative products and services in Canada.
 IP Inter-ministerial coordination council: comprising high-level representatives from the IP sector; would create policy programs to promote the protection of IP; would enforce key elements such as exposing the dangers and risks to consumer health and safety, highlighting the relationship between IPR crime and organized crime, providing information and resources to SMEs, and creating programs to exploit IPR.
Create an Intellectual Property Crime Task Force
 Adequately fund an Intellectual Property Crime Task Force, composed of police officers, customs officers, and federal prosecutors, to guide and coordinate IP criminal enforcement.
 IP Task Force:
- comprising of specialized IPR prosecutors and police officers dedicated to IP related crime
- will coordinate enforcement and prosecution activities against counterfeiters and pirates
- will work with border officials to address counterfeit products detected at border crossings

 Establish a specialized IP Crime Task Force to guide, coordinate and lead anti-counterfeiting and anti-piracy enforcement efforts in Canada.
 IP Task Force: comprising individuals dedicated to IP-related crime; would coordinate enforcement and prosecution activities against counterfeiters and pirates; would work with CBSA to track counterfeit products.
Tougher penalties
 Immediately encourage prosecutors to seek more significant penalties, including jail time.
 The Federal government must strengthen current IPR protection legislative framework by (…) Incur sufficiently severe penalties to deter and neutralize offenders, i.e. inclusion of jail/prison time as punishment.
impose stronger penalties for counterfeiting and pirating violations that endanger the health and safety of Canadians
enact appropriate penalties as a deterrent
Implement the WIPO Internet Treaties and anti-circumvention measures
 Enact criminal legislation clearly defining offences for commercial circumvention activities (including trafficking in circumvention devices)
 The Federal government must strengthen current IPR protection legislative framework by (…) Implementing the World Intellectual Property Organization (WIPO) Internet Treaties to curtail internet piracy and counterfeiting.
The Government of Canada should rapidly adopt IP legislation that fully implements the WIPO Internet treaties in a manner that is consistent with international norms and standards and enables the curtailment of counterfeiting and piracy in the online environment (whether physical or digital)
 implementing WIPO Internet treaties to curtail Internet piracy and counterfeiting
Create public education and awareness programs
 creating and implementing educational programs, with emphasis on Canadian youth, that teach the rationale for and importance of intellectual property
 Private and public sector stakeholders should work in partnership with consumer protection groups and education institutions to generate greater public awareness of the impact of counterfeiting and piracy on public health and safety, as well as to the economy
 Establish an intellectual property education program targeting the public, businesses, innovators, creators, and government officials.
 Private and public sector stakeholders should work with consumer protection groups and academia to generate awareness of the impact of counterfeiting and piracy on public health and safety, as well as to the economy.
Increase funding and resources to tackle IP crime
 Provide the RCMP and the Department of Justice with adequate financial and human resources to effectively address counterfeiting.
 Federal and provincial governments to provide additional funding and training to CBSA, police, Crown attorneys and judges specifically for the purpose of enhancing IPR protection.
 the Canada Border Services Agency (CBSA) should be provided with the legislative
authority and resources needed to target, detain, seize and destroy counterfeit and pirated goods on its own initiative.

 Federal and provincial governments should provide additional funding and training to all relevant enforcement authorities for enhancing IPR protection.


Not only are the recommendations the same, so too are the claims and the arguments used to support the recommendations.  First the claims:

1.    Counterfeiting costs the Canadian economy billions. (see posts on the uncertainty associated with counterfeiting claims here, here, and here)

Organization
 Claim
 Source
CACN
 The RCMP estimates that the cost to the Canadian economy from counterfeiting and piracy is in the billions.
 Royal Canadian Mounted Police “Intellectual Property Crime in Canada – Hazardous and Costly” RCMP Feature Focus 2005 Economic Crime in Canada
Ontario Chamber
 In Canada, the RCMP and others have acknowledged that there is no comprehensive study regarding the specific amount of pirated and counterfeit goods. However, a widely accepted estimated cost of counterfeiting and piracy to the Canadian economy, ranges between CDN $10 billion and CDN $30 billion.
 Royal Canadian Mounted Police “Intellectual Property Crime in Canada – Hazardous and Costly” RCMP Feature Focus 2005 Economic Crime in Canada
IP Council
 It has been conservatively estimated that counterfeiting and piracy cost the Canadian economy $22 billion annually in lost tax revenue, investment and innovation.
 Royal Canadian Mounted Police. “Intellectual Property Rights Crime.” Presentation. Montreal. Sept 16, 2008.
Conference Board
 Although the RCMP and others acknowledge that no comprehensive study has been done on the specific amount of pirated and counterfeit goods, they concur that a widely accepted estimated cost of counterfeiting and piracy to the Canadian economy ranges between $10 billion and $30 billion per year.
Ontario Chamber of Commerce, Protection of Intellectual Copyright: A Case for Ontario



2.    Lost revenues in the software industry (see my post on the BSA numbers here, dodgy software numbers here)

Organization
 Claim
 Source
CACN
 In 2005, the loss to the software industry as a result of piracy was approximately $736 million. This meant a tax loss of $345 million and a loss of thousands of software-related jobs.
 Royal Canadian Mounted Police “Intellectual Property Crime in Canada – Hazardous and Costly” RCMP Feature Focus 2005 Economic Crime in Canada
Ontario Chamber
 The RCMP reports that in 2005, the Canadian software industry lost approximately $736 million and 32,000 software related jobs as a result of counterfeiting and crime, the majority of which were lost in Ontario.
 Royal Canadian Mounted Police “Intellectual Property Crime in Canada – Hazardous and Costly” RCMP Feature Focus 2005 Economic Crime in Canada
IP Council
 According to a study commissioned by the Business Software Alliance (BSA), losses to the Canadian economy due to software piracy surpassed $1 billion in 2007.

Business Software Alliance. News Release. “BSA Urges Stronger Copyright Legislation To Reduce Impact of Piracy on Canadian Economy.” May 14, 2008. 

Conference Board
 Losses to the software and film industries are approximately $1 billion in Canada.
 Ontario Chamber of Commerce, Protection of Intellectual Copyright: A Case for Ontario



3.   Losses Due to Film Piracy (see my post on movie industry losses here).

Organization
 Claim
 Source
CACN
 The annual consumer spending loss in Canada due to film piracy in 2005 was estimated at approximately $270 million, while the loss of tax revenues due to film piracy in Canada in 2005 was estimated at approximately $41 million
 The Canadian Motion Picture Distributors Association (CMPDA) Beyond Borders: An Agenda to Combat Film Piracy in Canada (Beyond Borders) 2006.
Ontario Chamber
 The annual consumer spending loss in Canada due to film piracy in 2005 was estimated at approximately $270 million with a loss of tax revenue accruing to an estimated $41 million
 The Canadian Motion Picture Distributors Association (CMPDA) Beyond Borders: An Agenda to Combat Film Piracy in Canada (Beyond Borders) 2006.
IP Council
 Film piracy resulted in consumer spending losses of approximately $270 million in 2005, as well as tax revenue losses of $41 million
 The Canadian Motion Picture Distributors Association (CMPDA) Beyond Borders: An Agenda to Combat Film Piracy in Canada (Beyond Borders) 2006.
Conference Board
 Losses to the software and film industries are approximately $1 billion in Canada. Ontario Chamber of Commerce, Protection of Intellectual Copyright: A Case for Ontario


4.   Losses to the Music Industry

Organization
 Claim
 Source
CACN
 As a result of the combined impact of the physical and online black markets, the Canadian music industry’s retail sales of pre-recorded CDs and cassettes declined by 48 percent ($637 million) from 1999 to 2006.
 The Canadian Recording Industry Association, Press Release, March 2, 2006.
Ontario Chamber
 The Canadian music industry’s retail sales of pre-recorded CDs and cassettes have declined by 44 percent from 1999 to 2005, a decrease of $541 million. As a result, the Canadian recording industry has had to shed its workforce by 20 per cent, with most lost in Ontario
 The Canadian Recording Industry Association, Press Release, March 2, 2006.
IP Council
 Canada’s music industry, faced with unchecked online counterfeiting and piracy, experienced a 48% ($637 million) drop in retail sales from 1999 to 2006.
 The Canadian Recording Industry Association, Press Release, March 2, 2006.


And a few of the arguments:

1.   Piracy is out of control in Canada

CACN
 Piracy can only thrive in a culture where citizens view the acquisition of counterfeit goods as acceptable, thereby opening the way to consumer demand for those products. This appears to be case in Canada - particularly among youth - where research has found that stealing IP is increasingly regarded as morally acceptable.
Ontario Chamber
 the OECD found in a December 2005 report that Canada had the highest level of peer-to-peer downloading among OECD countries.
IP Council
 The RCMP has identified an “ever-growing use of the Internet for IP crime” in Canada, and predicted that the problem will escalate because “soft ware, music and movie piracy are easy, low-risk activities.” In November of 2007, the Quebec Superior Court declared that unauthorized file sharing in Canada was an “endemic” problem.
Conference Board
 The Internet piracy problem within Canada continues to worsen and is causing serious problems for markets in other countries.


2.   The U.S. is unhappy with Canada

CACN
 The United States Congressional International Anti-Piracy Caucus, which designated Canada as a “Watch List Country” (along with China, Russia, Mexico, India, and Malaysia) because of its failure to amend its copyright law in accordance with its WIPO obligations and because of “Canada’s lax border measures [that] appear to permit the importation of pirated products from East Asia, Pakistan, and Russia.”
Ontario Chamber
 Further, the United States Trade Representative (USTR) has stated that Canada’s lax border measures “appear to be non-compliant with TRIPS requirements” and the Canadian Anti-Counterfeiting Network has stated that “Canada has effectively failed to meet” its TRIPS obligations.
IP Council
 Several international organizations and countries have specifically identified Canada for its failure to adequately protect IP rights. In March 2008, the International Intellectual Property Alliance placed Canada in the same league as well known counterfeiting havens like China and Russia by listing it among “countries of the greatest concern.” In April 2008, the United States Trade Representative (USTR) placed Canada on the Special 301 Watch List for the fourteenth consecutive year.
Conference Board
 There is ongoing debate and outcry in Canada regarding the 2007 and 2009 Special 301 Reports issued by the Office of the United States Trade Representative.


3.   Canada’s lax IP protection hampers innovation and puts foreign investment at risk

CACN
 By providing a marketplace where investments in creative goods and services will be profitable, IP protection fosters innovation, job creation and economic prosperity. In developed nations like Canada, where innovation has become a key economic driver, this has never been more important. Unfortunately, it appears that all levels of government in Canada lack a sophisticated understanding of the connection between innovation and IP.
Ontario Chamber
 There is a real concern that mounting criticism of Canada’s IPR regime will impact Ontario’s attractiveness to foreign investors, its ability to foster innovation as well as overall competitiveness
IP Council
 Canadian failure to properly protect IPR directly affects the willingness of foreign firms to invest domestically.
Conference Board
 Canada is not among the top innovation nations, but is well positioned to do better if it can bring together its fragmented and uncoordinated innovation infrastructure. Otherwise, Canada will continue to offer only a marginal framework for developing and exploiting intellectual property from both the private and public sectors. The role of intellectual property systems in Canada has received inadequate attention. If Canada does not change, its economic outlook will suffer.


False Momentum

It is not just that these reports all receive financial support from the same organizations and say largely the same thing.  It is also that the reports each build on one another, creating the false impression of growing momentum and consensus on the state of Canadian law and the need for specific reforms.  Consider the IP Council's A Time for Change, which was released in early 2009.  The very first chapter of the report is titled "Canada's Emerging Consensus on Intellectual Property Rights."  Where does this consensus come from? 

According to the IP Council, it starts with the CACN report, followed by two House of Commons committees that heard primarily from these groups and which led to the 2007 Speech from the Throne and Canada's participation in ACTA.  The chapter then states that IPR policy was taken to the "next level" with the Ontario Chamber report, the founding of the IP Council, and the 2008 Conference Board of Canada conference that led to the three recalled IP reports.  The chapter then notes the "growing public awareness of the need for action" which cites Environics polls (paid for by the IP Council) and a Toronto Star supplement on counterfeiting (paid for by the CACN).  In all, the IP Council cites the CACN four times, the Ontario Chamber twice, the Conference Board of Canada proceedings 13 times, and the Environics research five times.

Environics

The influence over some of these independent reports is evident in other ways.  For example, Environics has emerged as the survey company of choice for this effort (Pollara was a favourite until Duncan McKie left to run the Canadian Independent Record Production Association).  Environics lead on these issues was once Don Hogarth, who now provides communications for CRIA.  On June 4, 2008 - one week before the introduction of C-61 - Environics released a poll that it said found that Canadians are looking for leadership on IP issues.  The report repeats the CACN, Ontario Chamber, and IP Council assertions, stating:

over the past several years Canada has fallen behind the international community when it comes to the protection of intellectual property and products of the mind. The gap between Canadian laws and international standards in the area of counterfeiting, piracy, and illegal downloading is growing ever wider. Canada has been maintained by the U.S. Trade Representative on a special watch list specifically because of its laxity in the realm of protecting intellectual property.

What makes the timing particularly noteworthy is that even though Environics issued a press release claiming that the data came from a new study, the data was not new.  Rather, it was drawn from a 2006 survey that seemingly sat idle for two years until the opportune moment to raise it days before the introduction of new copyright legislation.  Who funded the questions related to intellectual property?  It will come as little surprise to find that CRIA paid for those.  Moreover, Environics oddly proceeded to re-issue the identical press release six months later (June 2008 version, December 2008 version) in conjunction with an IP Council commissioned survey on counterfeiting.

What does it all mean?

At a certain level, none of this will come as a surprise.  Companies lobby for their position and what made the Conference Board of Canada series of events so unusual was the way in which it was exposed. Yet the Conference Board of Canada's recalled reports were clearly just a part of a much larger strategy to influence Canadian copyright policy by creating a narrative of crisis and the false impression of Canada as a piracy haven.  This week's comments from Industry Minister Tony Clement and Canadian Heritage Minister James Moore provide the strong sense that they better understand the current dynamic around copyright, but it is obvious that the lobbying on the issue is only going to intensify in the months ahead.

Add Comment (1) Tags (10)
Monday January 12, 2009
The Music Industry's Digital Reversal
My weekly technology law column (Toronto Star version, homepage version) opens by noting that Canadians focused on hockey success and economic doom-and-gloom over the past month may have missed a series of events that suggest a dramatic shift for the recording industry.  For much of the past decade, the industry has relied on three pillars to combat peer-to-peer file sharing - lawsuits, locks, and legislation.   The lawsuits, which began in 2003, resulted in suits against more than 35,000 alleged file sharers in the United States.  The locks, which refers to digital locks that seek to impose copy-controls on music files, was a requirement for online services such as iTunes before it was given the green light, while the lobbying for legislative reforms to support the use of copy-controls led Canada to introduce the failed Bill C-61. In a matter of weeks, the foundation of each of these pillars has either crumbled or shown serious signs of cracking.

The changes began with the announcement in late December that the industry was abandoning the lawsuit strategy.  While cases already filed will continue, the Recording Industry Association of America indicated that it plans to shift its attention to discussions with Internet service providers that it hopes will lead to the adoption of a controversial "three strikes and you’re out" policy for repeated cases of unauthorized file sharing.

The decision to drop the lawsuit strategy was long overdue as it had accomplished little more than engender significant animosity toward the industry.  In fact, the approach had recently come under legal fire with courts challenging the industry's contention that liability flowed merely from making files available on a shared hard drive (some courts have demanded evidence of actual downloads) and a Harvard law professor using one case to question the constitutionality of damage awards that can run into the millions of dollars for a handful of songs that sell for 99 cents each.

The Canadian situation was similarly unsuccessful as the courts rejected lawsuits against 29 alleged file sharers in 2004 on evidentiary and legal grounds.  The failed cases were particularly damaging since they led to the perception that all file sharing is legal in Canada (it is not) and helped to convince some of Canada's best-known artists to speak out against the practice.

The crumbling of the locks pillar came last week when Apple, the dominant online music seller, announced that it will soon offer millions of songs from all four major record labels without digital locks.  Apple had long supported the removal of the locks but faced resistance from some record labels.

The about face reflects the recognition that frustrating consumers with unnecessary restrictions is not a particularly good business model.  Moreover, the interoperability problems (songs locked to a single device) and security threats (the Sony rootkit fiasco that led to class action consumer lawsuits) associated with the locks clearly made their use more trouble than they were worth.

With lawsuits and locks on the way out, cracks are now also showing in the legislative pillar.  In addition to the privacy, security, and consumer concerns with such legislation, laws to protect digital locks seems increasingly unnecessary given the decision to abandon their use in the primary digital sales channel.

Nielsen Soundscan data released last week also undermine a key argument for such reforms.  The industry has long claimed that the legislative changes are needed to support the development of a digital marketplace in Canada.  The 2008 Canadian sales data reveal that laws are not the issue as Canada experienced a 58 percent increase in sales of digital tracks last year. That figure is more than double the U.S. growth of 27 percent and, incredibly, marks the third consecutive year that Canada has outpaced the U.S. in digital music sales growth.

The data - along with the crumbling of the lawsuits and locks strategy - reinforce the view that it is innovation, not intervention from governments and courts, that will ultimately determine the digital winners and losers.

music industry reversal column

My weekly technology law column (Toronto Star version, homepage version) opens by noting that Canadians focused on hockey success and economic doom-and-gloom over the past month may have missed a series of events that suggest a dramatic shift for the recording industry.  For much of the past decade, the industry has relied on three pillars to combat peer-to-peer file sharing - lawsuits, locks, and legislation.  

The lawsuits, which began in 2003, resulted in suits against more than 35,000 alleged file sharers in the United States.  The locks, which refers to digital locks that seek to impose copy-controls on music files, was a requirement for online services such as iTunes before it was given the green light, while the lobbying for legislative reforms to support the use of copy-controls led Canada to introduce the failed Bill C-61.

In a matter of weeks, the foundation of each of these pillars has either crumbled or shown serious signs of cracking.

Add Comment (8) Tags (10)
Wednesday September 5, 2007
"We Don't Have Any Choice"
Last week, the Vancouver Sun ran a lengthy article on the music industry.  It was a reasonable piece - comments from CRIA, CIRPA, and many artists presented some (though not all) perspectives.  That said, CRIA's Graham Henderson provided comments that merit a response.  According to Henderson: We want laws that offer choice. Right now we don't have any choice and we want the ability to be able to try our business model in a digital environment and have at least the majority of people respect our wishes, recognizing all along that there are going to be people who take from us. Leaving aside the fact that much of the copying that Henderson characterizes as "taking from us" is covered by the private copying levy that has now generated nearly $200 million since the CPCC began collecting the levy in 2000, CRIA is effectively saying that the only way the industry can offer digital music online is with DRM supported by anti-circumvention legislation.  Anyone with even the slightest familiarity with digital music in Canada recognizes that this is utter nonsense.

First, the evidence to date suggests that Henderson's own members are moving away from the use of DRM.  EMI is offering DRM-free downloads, Universal will be conducting a similar experiment, and most suspect that Sony and Warner will soon follow.  Meanwhile, the overwhelming majority of the Canadian music industry - the independent labels responsible for 90% of new Canadian music - never bothered with DRM to begin with.

Second, if anti-circumvention legislation really was a pre-requisite for offering new business models, then Canada wouldn't have an online music market.  Of course, that isn't the case either - much like U.S. consumers, Canadians have their choice of sites that sell by song (iTunes, Puretracks, Zunior) and by subscription (Napster). Moreover, we have stores that offer online downloads (MuchMusic) and telcos that offer downloadable music as part of their services (Rogers, Bell, Telus).  In fact, when SpiralFrog, the first industry-sanctioned free music download service launched, they did so first in Canada (that's right - a site that is wholly dependent on DRM which currently offers 700,000 songs in an ad-supported, DRM'd format launched first in a country without anti-circumvention legislation).

Third, not only is Canada home to a wide range of online music services, but the Canadian market is growing faster than either the U.S. or Europe.  According to Neilsen Soundscan, the Canadian digital download market grew by 122 percent in 2006, far faster than either the U.S. (65 percent) or Europe (80 percent).

So that's the reality in Canada - an industry that collects tens of millions of dollars each year to cover private copying, launches a wide range of online music services, and experiences remarkable growth has one lobby group responsible for a fraction of new Canadian music diminishing all those efforts by claiming that we don't have laws that allow it to try out new business models.

cria comments

Last week, the Vancouver Sun ran a lengthy article on the music industry.  It was a reasonable piece - comments from CRIA, CIRPA, and many artists presented some (though not all) perspectives.  That said, CRIA's Graham Henderson provided comments that merit a response.  According to Henderson:

We want laws that offer choice. Right now we don't have any choice and we want the ability to be able to try our business model in a digital environment and have at least the majority of people respect our wishes, recognizing all along that there are going to be people who take from us.

Leaving aside the fact that much of the copying that Henderson characterizes as "taking from us" is covered by the private copying levy that has now generated nearly $200 million since the CPCC began collecting the levy in 2000, CRIA is effectively saying that the only way the industry can offer digital music online is with DRM supported by anti-circumvention legislation.  Anyone with even the slightest familiarity with digital music in Canada recognizes that this is utter nonsense.

Add Comment (5) Tags (9)
Friday March 16, 2007
Copyright Board Issues Online Music Decision
The Copyright Board of Canada this afternoon issued its much-anticipated decision involving online music services.  The decision sets a tariff for the online music services to be paid for the reproduction of music.  I blogged about the hearings in the fall, which pitted the CMRRA against CRIA and the online music services.  The Copyright Board was asked to choose between two benchmarks in establishing the tariff.  CMRRA wanted to use the recent ringtone decision as the starting point, while CRIA argued that traditional CDs served as the more appropriate starting point.  The Board sided with CRIA, ultimately arriving at a tariff of 7.9 percent of the retail price per "permanent" download (ie. a download from Apple iTunes) with a minimum payment of 5.3 cents per download. Note that CRIA also sought to become a sub-licensee of the CMRRA repertiore, but the Board rejected that request. The decision also includes some important language with respect to private copying and DRM.

On private copying, there was some discussion about authorized vs. unauthorized copying.  The Board rejected the distinction, noting that "a private copy is a private copy, whether or not is was authorized."  This statement is important as provides support for the view that peer-to-peer downloading may in some circumstances be covered by private copying, since the issue of authorization is not relevant.

The Board also rejected an initial attempt to mandate DRM for online music services.  As my colleague Jeremy deBeer pointed out, the initial wording of the tariff appeared to require the use of DRM.  The Board dropped that requirement - it does not specify any use of DRM - picking up on the recent Puretracks decision to offer DRM-free downloads.

While both sides will find things to criticize in the decision (with the online music services likely the happiest of the bunch), the bigger question is why this tariff exists in the first place.  Not only are many of the same parties preparing for a second tariff for the same services but a different right next month (Tariff 22), but many might well ask why the parties simply could not have negotiated a similar agreement.  The need for Board-mandated tariffs may make sense for efficiency sake or where a market-based solution is unlikely.  That is not the case here - the parties reached an interim agreement years ago and there was seemingly no need to have an expensive, government-funded system to sort things out.

csi tariff decision

The Copyright Board of Canada this afternoon issued its much-anticipated decision involving online music services.  The decision sets a tariff for the online music services to be paid for the reproduction of music.  I blogged about the hearings in the fall, which pitted the CMRRA against CRIA and the online music services. 

The Copyright Board was asked to choose between two benchmarks in establishing the tariff.  CMRRA wanted to use the recent ringtone decision as the starting point, while CRIA argued that traditional CDs served as the more appropriate starting point.  The Board sided with CRIA, ultimately arriving at a tariff of 7.9 percent of the retail price per "permanent" download (ie. a download from Apple iTunes) with a minimum payment of 5.3 cents per download. Note that CRIA also sought to become a sub-licensee of the CMRRA repertiore, but the Board rejected that request.

The decision also includes some important language with respect to private copying and DRM.

Add Comment (18) Tags (13)
Monday February 19, 2007
The Recording Industry's Digital Strategy Out of Tune
My weekly Law Bytes column (Toronto Star version, homepage version) begins with the following: Ten years ago, as the Internet began to mushroom in popularity and emerging technologies enabled consumers to make near-perfect copies of digital content, the recording industry emphasized a two-pronged strategy in response to the changing business environment.  First, it focused on copy-control technologies, often referred to as digital rights management (DRM), that many in the industry believed would allow it re-assert control over music copying.  Second, it lobbied the Canadian government for a private copying levy to compensate for the music copying that it could not control. While the industry’s approach proved successful on the legal front - the 1996 World Intellectual Property Organization’s Internet Treaties established legal protections for DRM and Ottawa introduced a private copying levy on blank media such as cassettes and CDs in 1997 - the strategy’s effectiveness has long been subject to debate.  The week of February 5th  may ultimately be viewed as the beginning of the end of that debate.  That week, which began with Apple CEO Steve Jobs calling on the industry to drop DRM and concluded with the Canadian Private Copying Collective (CPCC), the collective that administers the private copying levy, applying for its dramatic expansion, leaves little doubt that the recording industry got it wrong. The column proceeds to discuss the failure of DRM and the mounting pressure on the industry to drop it.

On the DRM issue, it concludes that "given the rising chorus against DRM, it is seemingly only a matter of time before the industry backs away from its locks-first strategy. EMI, the world's third largest music label, is rumoured to be ready to do so and should one of the majors move in that direction, it is likely that the others will soon follow suit."

The column then focuses on the CPCC private copying levy, echoing many of the comments I posted last week (part one, part two).  On that issue, I conclude that the latest CPCC filing may well herald the end of the private copying levy.  Unpopular with the public and targeted for elimination by the Conservative party, the levy has been overtaken by the prevailing view that consumers should be entitled to make copies of their store-bought music without further compensation.  While there may be a need for an alternative compensation system for peer-to-peer file sharing, the private copying levy is ill-suited for this role since it does not legalize the making available of content on peer-to-peer systems and the purchase of blank media bears little relation to P2P activity.  Indeed, there are better solutions out there - levies tied to network providers make more sense (and are already replicated by cable television levies for retransmission of content) and there is a need to cover both peer-to-peer and the non-commercial use of content in user-generated content.  Those approaches will require the recording industry to play a new tune - one that includes the abandonment of the 1990s strategy of DRM and the private copying levy.

cria column on private copying and drm

My weekly Law Bytes column (Toronto Star version, homepage version) begins with the following:

Ten years ago, as the Internet began to mushroom in popularity and emerging technologies enabled consumers to make near-perfect copies of digital content, the recording industry emphasized a two-pronged strategy in response to the changing business environment.  First, it focused on copy-control technologies, often referred to as digital rights management (DRM), that many in the industry believed would allow it re-assert control over music copying.  Second, it lobbied the Canadian government for a private copying levy to compensate for the music copying that it could not control.

While the industry’s approach proved successful on the legal front - the 1996 World Intellectual Property Organization’s Internet Treaties established legal protections for DRM and Ottawa introduced a private copying levy on blank media such as cassettes and CDs in 1997 - the strategy’s effectiveness has long been subject to debate.  The week of February 5th  may ultimately be viewed as the beginning of the end of that debate.  That week, which began with Apple CEO Steve Jobs calling on the industry to drop DRM and concluded with the Canadian Private Copying Collective (CPCC), the collective that administers the private copying levy, applying for its dramatic expansion, leaves little doubt that the recording industry got it wrong.

The column proceeds to discuss the failure of DRM and the mounting pressure on the industry to drop it.

Add Comment (5) Tags (7)
Syndicate content