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August 27, 2009
Date: August 27, 2009 3:00 p.m.
101 College Street
Principals: See participant list
Industry Minister Tony Clement Hosts a Round Table on Copyright.
Download: Audio Recording (MP3, 48.8 MB)
Albert Cloutier: Good afternoon. I'm delighted to introduce the Honourable Tony Clement, Minister of Industry, who will shortly open the discussion by offering some opening remarks. Before I turn it over to Minister Clement, however, I'd like to introduce myself and generally describe how the round table process will roll out today.
So I'm Albert Cloutier. I'm the moderator, and the Director of the Copyright and International Intellectual Property Policy Director at Industry Canada. To my right is Barbara Motzney, the Director General of the Copyright Branch at Canadian Heritage. For today's meeting, we're using translation services and microphones in order to record the discussion. As indicated in the invitation you received, the discussion will be posted in both official languages on the Copyright Consultation website as both an audio file and as written transcripts as well. And there's a photographer wandering around, and the photos that are taken will also be posted on the website. We have translation services, so please feel free to participate in the official language of your choice. But to help ensure a high quality of translation, we ask that you speak clearly and slowly. And please, would you mind turning off your Blackberry's because apparently the… that can interfere with… with the wireless communication that they use. Before you speak, we'd also ask that you introduce yourself by name and organization.
The intent is that the discussion be free flowing, as it's intended to canvass your views on copyright reform. But in order to ensure that we have an opportunity to hear from all of you, we'd ask that you keep your remarks brief and focused. We're aiming for about three minutes per person in an initial round of comments. Behind you there's a clock that will actually do a countdown. So once you start speaking, the countdown begins.
Hon. Tony Clement: Except for me.
Albert Cloutier: Except… except for Minister (inaudible).
Hon. Tony Clement: (Laughs)… That's OK.
Albert Cloutier: The round table is scheduled to last for approximately 90 minutes. And if needed, I may ask you to wrap up your comments so that everybody can speak. So now over to Minister Clement.
Hon. Tony Clement: Thanks very much, Albert. (Inaudible)… Oh, there we go. There we go. OK. Thank you very much, Albert. I appreciate your introduction. And thank you and welcome to everybody. Sorry I was a bit late. I had to tear myself away from Muskoka, which sounds bad, except when you realize I actually live in Muskoka and I work in Muskoka as the Member of Parliament. But traffic is, as you know, sometimes a bit of a challenge. But thank you for waiting, and we'll… we'll try to pick up a little bit of extra time at the back end and make sure that everybody is given an opportunity to… to… to speak.
As you know, my colleague James Moore and I have been holding round tables throughout the country. And the goal of course has been to hear from Canadians on how our government should approach the subject of copyright reform. We have made this… these kinds of round tables fairly open ended, and of course that is just one medium that we have employed to get Canadians' views. We have had these round tables; we have had town halls — and I'm doing one of those tonight as well — but we've also heard from… from Canadians in terms of on-line submissions and basically every… carrier pigeon almost, but certainly tweets and social network sites have played a role in… in… in the… the dialogue as well. So obviously we're in the process of modernizing the legislation. We understand of course that digital technology has really radically altered the landscape over the last few years and in fact has… has altered it even from the last go-round when we had Bill C–61. So it shows that… how quickly these things can move.
As Industry Minister, I… I always like to stress that, quite apart from the general public policy issues that you're all very well aware of, one of the things that… that I would like to… to… to know is can we create laws and legislation that will help us foster innovation, help us foster economic growth. How do we make sure that Canadian consumers have the flexibility they need to… to be part of the digital era? How does that translate into economic growth and opportunity for Canadians? So that's one of the bees in my bonnet, and… but of course I'm here to hear your views and your perspectives of yourselves and your organizations as well.
With that, I'm going to stay within a couple of minutes of the three-minute mark anyway and encourage everyone to… to say their piece. And what we'd like to do, if we have time at the end, then it'll give us an opportunity to maybe have some commentary on some of the commentary that you've heard, and that allows it to be a bit more interactive. So hopefully we'll have some time for that. And with that, I… Suzanne, I'm going to pick on you. I hope you don't mind. And if you can maybe start us off. Identify yourself, as Albert had mentioned and… and what-not, but then we'll carry around counter-clockwise from you.
Suzanne Morin: Thank you very much. My name is Suzanne Morin, and I'm with Bell Canada, responsible for copyright policy, and have been part of the Canadian copyright reform marathon now since the 1990's. I use the term 'marathon', Mr. Minister, to give a sense of the dedicated effort that actually has happened over the last few years. Time has not stood still. Much has happened to encourage the legal on-line distribution of content in Canada. We applaud the government for this very broad-based consultation, and we thank you for the opportunity to be here today.
Now, before I forget, and just for the record, I do want to mention Parry Sound, Muskoka and Coquitlam… (Laughs)… as everybody else has. There you go. (Laughs)…
Now, Bell is a member of the Business Coalition for Balanced Copyright, and we support the balanced package approach for a strong Canadian regime. And we think it'll be technology neutral and withstand the test of time. But I did want to talk about roles for a minute. Many content owner groups have been calling for greater roles for ISPs. Well, let me talk about some of the things that ISPs have been doing. For several years now, many of Canada's largest Canadian ISPs have voluntarily implemented, at their own expenses, a notice-and-notice regime, whereby we receive notices of alleged copyright infringement and pass them on to our customers. Originally there were just a few every month, mostly about posted content. Now Bell alone receives upwards of 15,000 every month. Most of them are automatically generated by third parties, and all of them, for the most part, relate to file sharing. We make our best effort to pass them on, but, to be perfectly frank, the volume is challenging. Most of the notices we used to receive came almost exclusively from the recording industry; not anymore. Now they come almost exclusively from the movie, gaming and software industries. Canada invented notice-and-notice, and content owners have clearly embraced it. This actually puts us ahead of the rest of the world and those who have implemented WIPO. Other jurisdictions in this regard are catching up. Where Canada lags, though, is in recognizing the real costs for ISPs, both capital expenses and operationally, for this process. Other jurisdictions talk about sharing the cost or leaving it to private negotiations. We'd like the same opportunity here in Canada to explore how we can better manage the volume and improve the voluntary notice-and-notice process.
We've also indicated a willingness to explore with content owners what can be done in the special cases of pre-releases. Just a few words about graduated responses or one, two, three strikes you're out, better known in Canada as notice and terminate. Honestly, any thought of terminating or severely slowing down a household's Internet connection — good-bye on-line banking, learning, government services, streaming CBC News or radio, Skype for that matter, because someone in the household is file sharing is simply outrageous. A broadband connection has become a lifeline for Canadians and the engine of economic growth. While we're at it, why don't we just take their computer away and shut off their hydro? I think you get my point.
A role we don't hear much about, though, is the role of content owners to defend in Canada their own statutory rights. Bell and a few other Canadian ISPs several years ago spent time and resources in the courts helping to develop the legal blueprint that content owners would need if and when they decided to legally pursue their rights in a way that respects the privacy and judicial rights of Canadians. We're still waiting. No one is crazy about suing consumers, Minister… Minister Clement, because it's not popular. But what sort of message does it send to Canadians about the legality of the activity when an entire industry says we won't be suing Canadians for sharing our content without our permission?
Now, we've heard a lot about new and emerging business models, and we agree wholeheartedly. Bell's not alone in leading the development and promotion of legitimate downloading streaming services and efforts to bring legal music and video content to consumers. We promote the benefits of using legitimate services, pointing to the better quality and lack of viruses. Troublesome, though, is the fact that new Canadian business models that use new and more efficient distribution technologies to deliver content to consumers attract additional layers of copyright payments.
I've read all the transcripts with great interest. While I wasn't surprised — and this is my last point — by most of what I read, I was surprised by what I didn't. Only once or twice did someone actually talk about the need for education. We all know that policy initiatives require a tool kit approach, and copyright is not different. I'm not talking about a campaign that tells Canadians that they're thieves, but one that makes them understand and respect what it means to live in a society where citizens create and try to make a living from their creations, so that others in that same society can benefit from those creations and further create. I believe you're aware of the Media Awareness Network and the fabulous work that they do. Some of their resources are licensed in just about every school in the country. We believe that they can add on to these existing resources the message about copyright — again, not to tell students they're thieves if they file share content. Mnet(?) has an expertise in developing messages that touch students, our children, in a way that they get it. It's been tough getting any traction on this. Mnet has been into Industry Canada and Heritage to try to get the ball rolling, with no success. So maybe it's time that we all step up to the plate so that Mnet can play their part and help educate young Canadians. Thank you.
Hon. Tony Clement: Thank you very much. Jay, you're… you're next.
Jay Thomson: Thank you, and good afternoon, Mr. Minister. My name is Jay Thomson, and I'm here on behalf the Canadian Association of Internet Providers, or CAIP, which since 2004 has been a division of the Canadian Advanced Technology Alliance. CAIP is also a member of the Business Coalition for Balanced Copyright, and supports the BCBC's positions on copyright reform. As well, CAIP has been a longstanding proponent of promoting digital literacy as well and the importance of educating Canadians about Internet issues, including copyright, a position I certainly echo personally as the current chair of the board of the Media Awareness Network.
Now, not to be outdone by other participants in previous sessions, I too wish to highlight that the group I represent also has a connection to a riding. As CAIP has at least one member ISPs that serves the Muskoka area, namely Surenet based out of Huntsville.
Over the last decade plus, CAIP has been at the forefront of discussions regarding the application of copyright law to the Internet. It was before the Copyright Board at the initial… at the initial SOCAN Tariff 22 hearing in the late nineties, and pursued that case all the way to the Supreme Court, as you know. CAIP's role and activities have not focused solely on pushing back against rights holders, though. To the contrary, back at the beginning of the millennium, when I was the president of the association, CAIP was one of the very small group of forward-thinking organizations that worked together to establish in this country a world-leading approach to addressing the role of ISPs with respect to rights holders and working together cooperatively — that will take up a lot of my time, won't it? — And voluntarily to address copyright infringement through notice-and-notice. Indeed, with Suzanne Morin from Bell here, and Ken Thompson from Rogers, you have in this room the founding mother and two of the founding fathers of the notice-and-notice regime. The third founding father's Jay Kerr-Wilson, who was appearing before you in Gatineau. And incidentally, we're still waiting for our recognition plaque from the global community.
Notice-and-notice has always made more sense than any other proposed regime because it addresses the primary vehicle for on-line infringement, P-to-P file sharing. And it does so directly, efficiently, and proportionately while respecting due process. It does not take much to imagine how a parent will react when he or she receives a notice advising them that activity by a family member — dare I say a teenaged son or daughter — has exposed the family to possible and very expensive legal action. Notice-and-takedown, however, is completely ineffective with respect to p-to-p and it completely ignores due process. Even worse would be a so-called graduated response or a three-strikes regime, which should be recognized for what it would really be, namely notice and banishment from cyberspace. So not surprisingly, CAIP fully supports notice-and-notice.
At the same time, I must point out that notice-and-notice has costs — real costs. ISPs incur technical and human resource costs to process each notice they receive, and the volume of these notices is increasing. The cost burden for smaller ISPs is particularly acute. A 2006 study commissioned by Industry Canada revealed that it costs a smaller ISP almost $33 to process each notice it receives, which is roughly three times the cost for a larger ISP. Granted, small ISPs don't receive the same volume of notices, but recognize too that small ISPs have annual revenues typically of less than $5 million, and in many cases even less than $1 million. So they must strictly control their costs, not just to remain competitive against larger ISPs but simply to stay in business. That's why cost recovery and a cost recovery mechanism for notice-and-notice is very important to small ISPs. It's another reason why small ISPs oppose other proposals that would increase their costs or add to their administrative burden.
So in closing, I'd like to attempt to dispel the myth which a number of parties have tried to perpetuate in these consultations. That is that the Internet is primarily used for P-to-P copyright infringement activity and that ISPs are fat cats making a fortune off the backs of rights holders. For CAIP members at least, these allegations are far from the truth. CAIP members will tell you that, while they do provide access to all the net has to offer, the bulk of the users' on-line activity is far less controversial than you might be led to believe: e-mail banking, shopping, education, social networking, blogging, Internet telephony. While over the years many small ISPs in Canada have disappeared, there are still hundreds of them operating across this country. They would no doubt love to be fat cats. More realistically, they'd just like to be around tomorrow to continue to contribute to Canada's digital economy. So for this reason, Mr. Minister, CAIP asks that in pursuing a balanced copyright regime, please address the on-line activities, the special role and the special challenges that face small ISPs. Thank you.
Hon. Tony Clement: Now — thank you very much. I appreciate that, Jay. Next is Sam, representing the Canadian Council of Chief Executives.
Sam Boutziouvis: Good afternoon. Thank you, Minister, for the invitation to participate in this round table on updating Canada's copyright legislation, and thank you for leading this consultation. The CCC believes that the long-overdue amendments to the Copyright Act and the previous Parliament's Bill C–61 would be positive for Canadian innovation and creativity. The revisions would have strengthened Canada's protection of intellectual property and offered families, schools and libraries greater flexibility to make use of existing and new technologies.
Round table participants entering in this consultation have been encouraged to adopt a clean slate for these discussions. However, the four principles which underpin last year's legislation still deserve serious consideration. Briefly, they are: the appropriate balance between the rights of copyright owners and the needs of users; clear, predictable and fair rules; rules that foster innovation and attract investment; and consistency with international standards. Since the introduction of last year's bill, though, Canada has experienced a federal election and a global financial crisis which has evolved into the most severe global recession in five decades. While we're not out of the woods yet, we are beginning to see signs of light at the end of the tunnel. But through good times and bad, our future prosperity and competitiveness will depend in large measure on our ability to advance Canadian ingenuity, creativity, economic growth and innovation. In this regard, intellectual property protection looms even larger than ever, especially as our economy stabilizes and private sector-led growth and job creation return to more normal levels.
According to academics Roger Martin and Richard Florida, 30 percent of jobs in Ontario are creativity-oriented and account for nearly half — 47 percent — of all wages. Their February 2009 report titled Ontario and the Creative Age suggests that these jobs are a key engine of growth and prosperity. Enforcement of copyright and protection of the freedom to create and be compensated fairly for it are essential components of promoting creativity-based employment and prosperity, including of course in the arts and sciences but also in other areas of our economy such as finance and manufacturing.
We've learned since the last changes of the Copyright Act in the nineties and since the introduction of C61 that the creativity of individuals in the marketplace to produce such game-changing technologies have not stood still, as Ms. Morin highlighted earlier. New tools and practices have been introduced that were not even in the lexicon last year. On this I'd like to acknowledge the clear consensus that has developed thus far during these roundtables around the need for greater technological neutrality in the next iteration of copyright legislation.
Now, fostering Canadian-based ingenuity and innovation that can compete with the best in the world means acknowledging market realities. In this regard, we need to encourage the creation of a stronger private sector presence in the innovation sector with the scale necessary to make the investments that will be required to compete globally. In doing so, we need to assess our copyright rules against global benchmarks and best practices. This in turn would have us implement World Intellectual Property Organization treaties as quickly as possible. As indicated in previous round tables, we have to acknowledge that Canada's fallen behind in…
Albert Cloutier: Sorry. I'm just interrupting for a moment. The translators are asking that you slow it down a little bit. Thank you.
Sam Boutziouvis: We have to acknowledge that Canada's fallen well behind its key trading partners and competitors in this area. A benchmark perspective will result in a more flexible approach to the application of copyright rules and laws.
Also, complex and overlapping layers of rights can stifle innovation and increase costs. I think our two colleagues who just spoke on notice-on-notice are… is a clear example of this. As indica — but a market-based solution to an issue that's of great importance to ISPs. As indicated earlier, we should rely on the market to establish values and create new business opportunities. Indiscriminate regulatory intervention and fees, levies and tariffs will not, as a rule, result in more innovation and creativity. Indeed, my personal view is the opposite is the case. Such instruments should be limited to rare cases of market failure. But let me be clear here. Rules, including licenses, fees that reflect fair compensation are definitely needed, but they should be implemented not only as quickly as possible but as simply as possible. And this includes, for example, the very interesting proposition by Mr. Thompson regarding cost recovery associated with… associated with notice-on-notice.
The CCC and Canadian business broadly support a review process for the copyright legislation. Such a review process will help identify and prevent unintended consequences. Minister Clement, thank you again for pursuing a broad and inclusive approach to consultations on this issue. We do believe that the resulting legislation will be stronger and will stand the test of time. I've appreciated the opportunity to participate at the round table and look forward to a discussion, and propose, Minister, that we have this discussion in the very beautiful riding of Parry Sound and Muskoka.
Hon. Tony Clement: Thank you very much. I appreciate that, Sam. And don't tempt me. I'm pleased to have with us Gerry McIntyre of the Canadian Educational Resources Council.
Gerry McIntyre: Thank you, Minister Clement. Thank you for this opportunity to participate in a very important Canada-wide consultation on getting it right in copyright. My name is Gerry McIntyre, and I am the Executive Director of the Canadian Educational Resources Council, which is the trade association of those publishers specializing in the development of resources to support learning in the elementary/secondary schools of Canada, specifically Canadian content that supports the various curriculums of education jurisdictions in this country. We are traditionally thought of as the producers of textbooks but, while textbooks still play a significant role in the product line of our member firms, there's an increasing demand for more digital resources to support learning in Canada, including CD-ROM and on-line applications. And so we have a keen interest in seeing that copyright reform addresses today's world and the issues in it as well as the world that is evolving.
Intellectual property developers, we believe, whether their medium is print or digital, need the protection that copyright provides. Such protection can best be provided by an act that creates conditions in which right holders are assured of reasonable return for their investments and users are provided with appropriate channels of access. The language of such an act should allow market forces to shape the business models through which intellectual property will be disseminated. Policies that encourage investment and innovation will bode well for greater access and choice for teachers and for the primary beneficiaries, the students in Canada's schools.
We believe that the four principles articulated by the government as a basis for copyright reform point in appropriate directions. I won't belabour by reiterating them, but I… I… I would like to say that we felt that several sections of the previous draft bill fell somewhat short of those principles. From our perspective, that bill eroded several necessary underpinnings for rights holders. At the same time, I know that there were others who argued that the bill contained too many restrictions. Perhaps it just serves to illustrate how challenging the task of reforming copyright can be. Users have a variety of needs and intended uses, and do make it a challenge, therefore, for those drafting legislation to achieve that principle of balance that was first and foremost in the government's list.
So it's not my intention to quibble about language today. I rather hope that you are here because of your interest in hearing about issues and strategies for addressing them. And not unremarkably, I believe that there are several features of the elementary/secondary education publishing business that make it something of a microcosm in which major copyright issues play out. For example, with respect to balance, on the surface it seems quite reasonable that a teacher should expect to be able to copy a few pages of a textbook for use in class. Some would argue that this is a fair dealing use which need not be paid for. But when examined closely, it turns out that tens of thousands of teachers across Canada are copying hundreds of millions of pages of copyright protected materials every year in schools across the country. In a recent ruling on this point, the Copyright Board decided that this was not inconsequential and it was not a fair dealing of the protected works. So to simply allow what might have appeared an inconsequential use by an individual teacher would certainly not be in keeping with the principle of balance.
The creators and owners of those works have made it possible for schools and other users to access the works through a license, in this case a collective license, through access copyright. The idea of such a license is to enable educators to have the necessary access while ensuring a fair remuneration of the creators and owners for the use of copyrighted works. Canada's copyright system of the future needs to ensure fair remuneration if there is to be an achievement on that principle of balance.
Fair remuneration is also needed to foster innovation and investment in high-paying jobs in Canada, the government's third principle. Publishers invest millions of dollars every year in research and development to create textbooks and other resources for the education sector, and indeed for other sectors, directly creating thousands of high-paying jobs and indirectly employing the talents of thousands of Canadian freelance writers, photographers and visual artists. Business realities for the future will include print and digital resources being produced to support learning in Canada's schools. Licensed access to such materials — in some cases through collective license, in other cases through proprietary license — will need to be part of the business model if there is to continue to be incentive to develop those materials. Creating a copyright regime that accepts educational institutions from the… the rules applied to other users will serve only as a considerable disincentive to the development of those resources.
We encourage you, therefore, not to consider extending fair dealing. Extensions will erode both producers' revenues and the general respect for copyright. We cannot afford to battle our customers over what might be included under the sort of 'such as' clauses that have been suggested by some. New exceptions, such as an educational exception for works publicly available on the Internet, would undermine our members' revenues and their confidence about embracing Internet-linked business models. No broad educational exception is needed. The broader you make such an exception, the more you undercut the capacity of the market to serve those needs over time. Ultimately, the consumer of those services, the student, will suffer.
Book publishers are actively pursuing new business models and opportunities. Expanded fair dealing, new exceptions in the Act, circumvented TPMs or weakened collectives would undercut these models and our industry's ability to survive and contribute to Canada's future. We encourage you, therefore, to consider the real impact of such proposed exceptions on the market and their potential negative effect on the ability of thousands of Canadian creators and the Canadian publishing industry to benefit from the products of their labour, the government's second principle. We need an Act that establishes balanced, consistent norms; an Act that enables Canada to implement the WIPO treaties to re-establish our credibility on the international stage as a respecter of the fundamental principles of copyright.
Hon. Tony Clement: Gerry, if I can ask you to wrap up, that'd be great.
Gerry McIntyre: I just had.
Hon. Tony Clement: OK. Perfect.
Gerry McIntyre: Thank you for your attention.
Hon. Tony Clement: Thank you again. I appreciate that very much. We're going to carry on. I… my eyesight is not perfect, but I think that's…
Duncan Mckie: I can…
Hon. Tony Clement: …Duncan…
Duncan Mckie: I can say my name.
Hon. Tony Clement: OK. Thank you.
Duncan Mckie: OK. Minister Clement, staff, colleagues, my name is Duncan Mckie and I am President and CEO of the Canadian Independent Record Production Association, representing over 160 Canadian companies who are actively engaged in the production and distribution of music for Canadian and export markets. Our companies have helped develop some of Canada's best known independent artists, some of whom you would certainly recognize. These include legacy artists like Rush, Bruce Cockburn, Corb Lund, Blue Rodeo, and Oliver Jones, and exciting new acts like Sophie Milman, Feist, Metric, Patrick Watson, Alexis on Fire, and Broken Social Scene. And I'll be selling CDs when you leave the room.
Our companies recognize the need to develop products and services to meet the demands of the digital marketplace. Most recent catalogue tracks have been digitized. Twenty CIRPA companies have formed and are operating their own worldwide digital distribution and licensing cooperating, the Independent Digital Licensing Agency, with our support. Canadian artists and acts, sometimes with the support of international labels, appear in most digital track stores around the world, and are being marketed aggressively to international mobile players and networks, like Virgin and China Mobile.
Our association is committed to the worldwide commercialization of Canadian independent music and the reinvestment of the returns in Canadian artists. This model has served Canada well for decades. To this end, over the course of any year we send multiple delegations of artists and their associated companies around the world to pursue commercial opportunities. In June of this year a delegation visited Hong Kong for the first time, where we showcased Winnipeg's The Waking Eyes. In November of 2008 eight acts comprising 26 artists showcased in Tokyo, and Sheboya's (ph) Duo Sound (ph) Exchange and the Canadian Embassy's Oscar Peterson Theatre. As a result, Patrick Watson, the Montreal alternative band, inked a multi-country deal with Loveda Records of Hong Kong, and will be performing there live in January.
We expect that the domestic and international sale or distribution for compensation of sound recordings will in some fashion remain a component of the revenue stream of most music companies for some time to come, whether through all-you-can-eat subscription services like Nokia's Come with Music, or through track downloads in the Pure Tracks or iTunes stores or some other variant.
The digital scene outside of Canada's improving, and opportunities are proliferating. For that reason, trade development continues to be one of our major initiatives. But trade, as the name implies, is… is reciprocal. For this reason, we must be more successful at home in developing digital distribution services in light of the decline of the market for CDs. However, despite the need for innovative services, the newest international players in the digital distribution arena, like Nokia, show little or no interest in entering the Canadian marketplace, and no Canadian solution is forthcoming. In our frequent and ongoing discussions with senior executives of independent music organizations outside of Canada, they often point out that Canada has not fully implemented the WIPO treaties. They suggest that you cannot expect to develop a successful trading relationship or expect innovative technological investments without the adoption of clear and internationally acceptable guidelines with respect to property rights.
For this reason among others, CIRPA supports the ratification and implementation of WIPO and associated treaties. We feel that the four basic rights contained therein provide a clear conceptual framework for the protection of the rights of creators of sound recordings and for the development of the marketplace in the future. We also subscribe to the provision and enforcement mechanisms must be developed that ensure, quote, effective action and provide, quote, expeditious remedies, to cite the WIPO website.
At the same time, we support the extension of private copying levies to digital audio recording devices and similar DAR media whose current exclusion from the levy will ultimately erode that fund. There are a number of examples in the international scene where WIPO compliance and private copying coexist. And I think you're going to hear more on that later. So thank you. I welcome your questions.
Hon. Tony Clement: I'm sorry. Thank you very much, Duncan. I appreciate that. We'll move along to Catherine Saxberg of the Canadian Music Publishers Association.
Catherine Saxberg: I think this time out at about four minutes. I can probably do it in three, but I might leave the translators in the dust, so… (Laughs)…
Hon. Tony Clement: Take your time, then.
Catherine Saxberg: OK. I am the Executive Director of the Canadian Music Publishers Association. CMPA represents music publishers and, by extension, their songwriter partners from across the country. Music publishers develop songs and songwriters, look for ways to… for those songs to be heard, and collect and pay out revenue from around the word. The digital…
Hon. Tony Clement: Sounds… that sounds a bit too fast.
Catherine Saxberg: That's… that's fast? (Laughs)… OK.
Hon. Tony Clement: Just relax. We're all friends here.
Catherine Saxberg: (Laughs)… Alright. Just want to make sure I get through to the end, that's all.
The digital age has expanded the scale on which content can be shared and distributed infinitely. Current copyright laws can't stop that, and current laws don't provide the necessary framework for compensation for creators and rights holders. It's not necessary to punish creators to give consumers access to content in a way that consumers demand. We need a society where creators can make a living from the fruits of their labour, assuming of course that there is demand for those efforts. And that's what's at stake with the copyright reform hearings: the protection of the rights of creators and rights holders both to determine how their works are used, but ultimately to be fairly compensated for the value of those works.
There's value in intellectual property. The value to society is acknowledged in that a citizen can do things to another person's intellectual property that they can't legally do to another person's car or their iPod. And we accept that difference. However, there are those who would take this too far, and we need to uphold the principle that intellectual property is in fact private property. Its destiny has to be directed by the owner…
Hon. Tony Clement: OK. OK.
Catherine Saxberg: Still?
Hon. Tony Clement: I'll give you as much time as you need (inaudible).
Catherine Saxberg: OK. (Laughs)… And its protection has to be established and enforced by the state. We should not denigrate the rights of the owner to monetize their property as they wish. Requiring compensation for access is not a barrier to access.
We are pleased to see the majority of submissions at these round tables acknowledge the need to compensate creators and rights holders. And we enthusiastically support the development of new ways in which consumers and citizens can access content. We want people to hear our songs, whatever they want, however they want, as long as creators and rights holders are fairly compensated.
We support the ratification of the WIPO treaties because we believe Canada should live up to our international commitments. However, ratifying WIPO and leaving copyright reform at that would bring our laws up to the 20th century. The question is what's needed for the 21st.
The WIPO treaties are based on principles of maintaining control of content and establishing penalties. Although we acknowledge that there is a place for these, we are more interested in copyright reform that is based on positive principles of clarity, broad easy access, flexible use, and fair compensation.
Many have also asked that the new technology to be… that the new legislation be technology neutral. And we've seen the damage when legislation is not technology neutral. The American DMCA did not anticipate widespread file sharing, and here in Canada we have a private copying regime that does not ensure creators are compensated for the copying if their works onto MP3 players. No one listens to an empty iPod. The value in the iPod is in the content that's been copied onto it. And the vast majority of copies are currently outside the law. So, rather than having laws that get bogged down in the specifics of technology, we need laws that establish clear principles that can be broadly applied. ACTRA, the AFFM, Manitoba Music, Music Nova Scotia, and CIRPA and CPCC, among others, have all stated strong support for the private copying regime as a pragmatic approach to a failed marketplace. CMPA also emphatically supports the private copying regime. Revenue collected from private copying goes to creators and rights holders, and its not, under any circumstances, a tax.
So when we look at copyright reform, we ask who is making money from content without compensating the creators. Perhaps the biggest beneficiaries of the uncompensated use of content are the Internet service providers. They have built up broadband networks by encouraging consumers to… to access content. Indeed, one Internet service provider in this country was encouraging consumers to upgrade to high-speed access in order to download music faster at a time when there was not a legal music downloading service available in this country. So our content has added value to the businesses of Internet service providers, and creators and rights holders should be compensated for contributing to that value.
We note with interest the submission from Quebecor, and we applaud them for acknowledging that they, quote, cannot remain insensitive to the piracy problems affecting the survival of Canadian content producers and rights holders, unquote. We are also pleased to note the remark that, quote, ISPs should do more, unquote, but without the intervention of legislation of the regulator. We reiterate that they have benefited from the piracy problem, and we are concerned by their lack of specific suggestions as to how they might do more. The intervention of legislation may be the only way to motivate them to approach this question with a little more liveliness.
They will argue that they are dumb pipes or, as Barry Sukman (ph) lovingly calls them, innocent intermediaries, oblivious to what content flows through. And indeed, the Supreme Court upheld this view a number of years ago. But that was before they consistently and admirably assisted police forces in locating child pornography — that proves that they can in fact tell us what's going on in the pipes — and before they filed CRTC submissions for the net neutrality hearings this summer that indicate that they can not only know what content is on the pipes but can in fact control the rate at which you access it.
Let me be clear. We would see litigation as a last resort. We would prefer to have the ISPs at the table and negotiate terms for licensing the use of currently unauthorized content on their networks. We can create a licensing regime that will make the process simple and efficient in exchange for fair compensation. We are pleased to see that many of those who have filed submissions in this process support in fact the principle of licensing content on line, even if there are a number of approaches to the specifics of the execution. We note that the Canadian Motion Pictures Distributors Association proposes to, quote, promote ISPs to work affirmatively with rights holders to try and change behaviour, unquote. We ask what exactly are the ISPs waiting for to work affirmatively and do more. We are not convinced by their good intentions, and we believe that the best way to get them to work affirmatively and do more is to clarify penalties in law for infringement and trafficking in authorized content.
Currently many Canadians pay for both cable and Internet services — two bills, often one company. As Canadians move more and more… as Canadians move their attention more and more from the content they get via cable to content via the Internet, perhaps compensation should migrate also.
In closing, I realize these copyright consultations and subsequent changes to the Copyrigh Act occur very infrequently. And with the speed at which technology reinvents itself, far outpacing the ability of copyright to keep up with the times, any changes to legislation that result as… that result of these consultations needs to represent a 21st century vision. And on behalf of CMPA, I thank you for giving us the opportunity to be part of that.
Hon. Tony Clement: Thank you very much, Catherine. I appreciate your… your intervention. We'll turn then to Bernard Courtois of ITAC.
Bernard Courtois: Good afternoon, Minister. I am… just for the record, my name is Bernard Courtois. I'm the President and CEO of the Information Technology Association of Canada. We are the national association of Canada's information and communications technology industry, which covers both in… in terms of computers and telecommunications, hardware, software and services, and our industry therefore makes the Internet work for Canadians, and we therefore have a significant interest in these proceedings. We're also a highly innovative industry. We represent… we grow faster than the rest of the economy, but we're just a little more than five percent of GDP but we're around 40 percent of all the private sector R&D carried out in Canada.
We're also very interested, not surprisingly, in the issue of leadership in the digital economy. We're interested in that leadership for Canada, both in terms of our use, our users, and our producers, which would be our industry. We congratulate you, Minister, for having convened that significant forum in Ottawa on June 22, and you have a lot of people around waiting to see the action plan that'll come out of that. I think it was apparent on that day, and even at the… at the Canada 3.0 conference that took place in Stratford in early June, where about 1500 people attended, that leadership in the digital economy has to include a 21st century Copyright Act. Our Copyright Act at the moment predates the Internet.
We're also very happy that you're holding these consultations because this is an important subject and it… it does benefit from open discussion. That being said, the experience of everybody around this issue over the years is it is going to be impossible to satisfy everybody, to get everybody every little bit that they need. I think the Canadian way and the right way is going to be at some point to choose a reasonable course and… and… and not try to satisfy everybody; otherwise, you will get into gridlock.
When you come to the principles to use to modernize our copyright legislation, many people use the word 'balance,' and that is a traditional, fundamental, underlying concept in copyright law. And for us, I think it's important to… to view balance as meaning making sure that… that you take into account the… the rights of creators and innovators, but also the interests of users and the interests of intermediaries and the interests of researchers. We are a world leader in terms of Internet and security research, and… and we don't want to damage that.
In our view, what we're trying to do is maximize innovation and… and economic growth, innovation both in terms of the use of advanced technology, Internet technology, and in the production of it, and the economic growth can only come if there's value in it for users. Without the users paying for it, copyright doesn't lead anywhere. Copyright requires both ends of it: protection on the one hand, and value to the users.
What we feel is needed for the creators and innovators is to protect their rights in the Internet world so that they can charge — and… and the law supports them in charging when they want to charge. If they want to use a different business model that uses free, or maybe advertizing, whatever, they can use that as well, but that's a choice of business model. And the business models for Internet commerce are quite fluid, very hard to… to pick or to predict. That is not the role of government, to pick business models. It is not the role of legislation to fix and set the particular business model. If people want to charge, the law should support that. And that applies, in our view, both to copying and to access.
There could be a debate as to what the WIPO treaties apply to; we're thinking more in terms of what should Canada's copyright law be like if it wants to be a world leading piece of legislation. Today access in and of itself is very often what people sell. We're working to… moving to a world of cloud computing, software as a service, and various transactions where the access itself is the product that is being sold.
In terms of research, as I mentioned, we are leaders. We want to be very careful about that. We want legitimate research to be exempt. There's absolutely no cause or reason to get that caught up in any form of copyright. What we want the exemption regime to be, though, is we do not want it to be too cumbersome or impractical that will… it'll impede the word… the work of our… of our successful research industry and legitimate, say… other researchers.
So I'll conclude on that, saying in our minds the importance is real balance so that we're looking for something that will maximize innovation and economic growth and leadership, and all of that has to be based on the combination of innovation on the various technology sides as well as value for the end user customer. Thank you.
Hon. Tony Clement: Thank you very much. I appreciate your intervention. We'll now hear from Jacob Glick of Google.
Jacob Glick: Thank you, Mr. Minister. My name is Jacob Glick. I'm Google's Canada Policy Counsel. I'm also a copyright law nerd.
Thank you and very much for inviting Google to attend and participate in this consultation. I note that Canadians every day make their way to and from Parry Sound-Muskoka by use of Google Maps.
Alright. I'm done. Is this thing on? Thank you. I'll be here all week.
These forums, both on line and off line, provide a tremendous opportunity to have a meaningful discussion about this complex area at the intersection of law, innovation policy, and cultural policy. I don't envy the task that the Ministers and the departments have in the weeks and months coming. Over the years, copyright reform, especially ambitious copyright reform that strikes the balance between providing incentives for creation and the wide dissemination and access to works, has proven an elusive, even Sisyphean task. Although I do not intend to get into the nitty-gritty of legislative specific, I should add for the record, and because I know the blogosphere is tracking who said what in these meetings, that we support expanded fair dealing and, in particular, making the current list of fair dealing categories illustrative. We also support safe harbours for ISPs, web hosts, search engines, and other intermediaries. The made-in-Canada notice-and-notice regime and the information location tool safe harbour provisions work well for this purpose. We also support the positions taken by the Business Coalition for Balanced Copyright, of which we are a part, on other issues like TPM… like linking protection for TPMs to actual infringement.
The focus of my comments today, though, is simple and straightforward. Copyright policy is not the zero-sum game that you might think by listening to the often polarized copyright debate. Copyright policy choices can and should encourage user creativity, provide space for a vibrant technological and cultural innovation, while ensuring rights holders get paid. To illustrate this point, consider the case of the JK wedding entrance dance video on You Tube. I don't have time to show it here. But if you haven't seen it, please take five minutes to Google it and watch it. It's fun, creative and original. The video is of Jill Peterson and Kevin Heinz's wedding party dancing down the aisle to the song, Forever. Since it was posted on July 19th, just over a month ago, the video has been viewed over 21 million times worldwide.
Thanks to the sophisticated content management tools that You Tube has innovated, the record label has been able to monetize — I know that monetize isn't a real word, but we use it now as if it was one, like incentivize, so you'll have to forgive me. So has been able to monetize views of the video through advertizing. They also ran click-to-buy links over the video, giving viewers the opportunity to purchase the song on Amazon and iTunes. And in fact, in the weeks after that link went up, this song shot to the top of the iTunes chart precisely from the traffic generated by that video. All of this drove considerable revenue for the label while preserving a great user experience for the couple, their friends, and the rest of us.
In the either/or notice-and-takedown paradigm proposed by some, the record company would have simply sent You Tube a takedown notice, and You Tube would have removed the video. Under the draconian solution others suggest, You Tube would have filtered the content from the start and never even allowed the user to post the video. Both of these solutions, in addition to being bad for users and, in turn, bad… and… and as it turns out, bad for business, also pose serious problems for free speech because they silence expression on a mere lawyer's letter, allegation, or suspicion of infringement.
However, the record company that owns the rights to Forever was smart. They understood how music plays an important role in our lives, and that the users who posted the video weren't pirates; they were fans. Working with You Tube, the record company celebrated their fans' creativity. And thanks to our innovative tools, they were able to make money in the process. Everybody won.
The future of copyright policy is not a zero-sum game where user and artist rights are mutually exclusive. It's a future where user creativity is nourished and celebrated, and all sorts of innovative business models develop around this ecosystem of creativity. This future is best fostered by encouraging, again, this ecosystem of creativity by expanding fair dealing. That ecosystem can encourage all sorts of innovative business models to benefit rights holders.
Think back to the early 1980's, when the Motion Picture Association of America said that the VCR is to the American film producer and the American public as the Boston Strangler is to a woman home alone. Had the US Supreme Court agreed and restricted fair uses associated with time shifting, the US movie industry would have lost out on what became an incredible business for them. With an evidence-based, technology neutral approach that looks to protect user and artist creativity and to promote innovation, you can craft a new copyright bill that works today and continues to work as technology evolves.
Thank you again for the opportunity to present today. I'm delighted to answer any questions you may have.
Hon. Tony Clement: Thank you very much, Jacob. I appreciate your presentation. We'll now move on to Ken Thompson of Rogers Communication.
Ken Thompson: Thank you, Minister Clement. My name is Ken Thompson. I'm here on behalf of Rogers Communications Inc. Thank you for inviting Rogers to participate in the round table. This afternoon my comments will focus on our broadband and wireless Internet services. We will address our media issues at the Peterborough round table.
We support the government's initiative to update the Copyright Act and to maintain the balance between copyright owners and copyright users. We believe that copyright changes we recommend would best foster innovation, creativity, competition, and investment in Canada. We also believe that our recommended changes will withstand the test of time and position Canada as a leader in the global digital economy.
Last year Bill C–61 addressed many needed amendments, but was lacking in some important respects. The next copyright amendment bill would be much improved if it addressed some key issues that I will mention briefly. These are: exempting ISPs from liability; legalizing time shifting and NPVRs — those are network personal video recorders; avoiding a digital-on-demand tax; and avoiding a peer-to-peer or p-to-p levy.
The Supreme Court of Canada has confirmed that ISPs face no copyright liabilities when acting as intermediaries. This same principle is consistent with the Digital Millennium Copyright Act in the US and with the European Union directives. ISPs acting as intermediaries should continue to be exempt from liability for infringements of copyright and any violations under the Act, including the transmission by their sub — excuse me — their subscribers of software used to circumvent TPMs.
You're hearing from some stakeholders a demand that ISPs do more to combat peer-to-peer file sharing. But we would like to stress what ISPs are doing now. For over eight years Rogers, along with other Canadian ISPs, have voluntarily, at our own expense, sent millions of copyright infringement notices in confidence to our subscribers who are alleged to have — and I underline alleged — to have infringed copyright. The major studios, the international record companies, and other rights owners have been active participants in this voluntary notice-and-notice program.
The value of the program can be measured by the fact that these rights owners have very rarely gone the next step of exercising their rights in Canadian courts against on-line infringers and file sharers. US courts have said that the DMCA notice-and-takedown provisions are not effective against peer-to-peer file sharing. In response, some of the big US networks and studios have turned to private agreements with ISPs to pass on notices to their subscribers. Notice-and-notice programs are also being explored elsewhere as a viable alternative found to be effective in a high percentage of cases.
As we have had a function… functioning voluntary notice-and-notice program for over eight years, it makes little sense to embrace notice-and-takedown or adopt some kind of three-strikes-you're-cut-off rule, a solution that has been rejected by the European Parliament and has almost… in almost all countries where there have been attempts to introduce such laws, including New Zealand and France. It is our understanding that, if it is necessary to make our voluntary notice-and-notice regime mandatory by bringing it into the Copyright Act, then we believe it is appropriate and timely for ISPs to be compensated on a cost-recovery basis for both our capital expenditures and operating costs associated with that program.
For nearly 30 years, Mr. Minister, Canadians have been time shifting television programs and making back-up copies of their favourite films. However, this everyday practice remains a copyright infringement, even though the copyright owners have never sought to enforce their rights to license or stop these practices. As my colleague Mr. Glick has pointed out, the… these copyright owners have been quite successful because of these practices. Bill C–61 failed to achieve technological flexibility because it would have permitted VCRs and PVRs but specifically prohibited new, innovative methods such as network PVRs, network personal video recorders. The only difference between the use of a PVR and an NPVR is that the NPVR, the personal recordings are made by the customer and stored at a cable head end rather than in the hard drive of a set-top box in his or her home.
NPVRs are legal in the US under the fair use doctrine. That was recently confirmed in… in a court case at a federal appeal… appellate level. The government should take this opportunity to ensure that Canadian are not decide… denied the same benefits of this and other marketplace innovations. Adding effective technical protection measures are necessary for WIPO treaty ratification, but WIPO does not require that these override established fair use practices such as time shifting.
I'd like to mention briefly about what we call a digital delivery tax. Our present law and jurisprudence requires that consumers pay additional copyright fees, a kind of digital delivery tax, for music downloads that would not be applicable if they purchased the same music on a CD at Wal-Mart. A digital tax that increases cost to the consumer with no additional value will only drive more users to illegal sources of on-line copyright products. Amendments to the Copyright Act should provide protection for legitimate on-line distribution of copyrighted works while not adding legal uncertainty and a new layer of rights, payments and regulation.
The US has implemented and ratified the WIPO treaties in a way that would not impose additional fees or a digital tax on copyrighted works sold on the Internet. New Copyright Act amendments should clarify that point-to-point, on-demand communication of a copyrighted work — a digital sale, if you would call it that — does not incur the piling on of additional copyright fees.
Hon. Tony Clement: We're… Ken, if we could move along, that'd be great.
Ken Thompson: I'll… I'll leave it at that, except to say that we're going to file a submission on line to elaborate on these and other important issues. And… be pleased to answer any of your questions.
Hon. Tony Clement: No, I appreciate that. And I should have said at the outset of course you're all encouraged to submit fulsome briefs at the… at the conclusion or anytime between now and September 13th, for sure. Alright. We'll move on to… is it John McEwen or McCowan?
John McKeown: McKeown.
Hon. Tony Clement: McKeown, of Intellectual Property Institute of Canada.
John McKeown: Thank you very much for inviting us. A word about the Institute. It was founded in 1926, and it's Canada's pre-eminent association of professionals who specialize in intellectual property, including copyright. So it… it… it does represent many of the parties that have intellectual property issues.
And… there are two treaties. There's the WIPO Copyright Treaty, and the WIPO Performance and Phonograms Treaty. So there's the two of them. And… and they came into force into 2002, and the United States has ratified both of those treaties, and the European Union has concluded its copyright directive, which requires its members to implement those treaties. And the treaties and copyright laws, and perhaps oversimplifying but they provide creative individuals with exclusive rights that allow them to determine whether and how their works are copied and distributed. And that assumes that they should enjoy the economic rewards of their creativity. And that provides a powerful incentive. And the… it's not to say that those treaties cannot be implemented in a fashion which allows for some flexibility. They provide for minimum standards, and there are many policy options open to implement those treaties.
Also, copyright law encourages national expressions of culture. Inadequate protection deprives local creative people of adequate compensation and subjects them to unfair competition from counterfeit copies, accessible worldwide through electronic commerce. Now, counterfeiting and other forms of piracy have become a major criminal enterprise. This not only hurts right owners, but it destroys legitimate jobs, and it deprives governments of substantial tax benefits. Copyright laws provide the principal legal tools for fighting this. And the… the strong consensus, certainly in our committees, is that we need to have effective enforcement mechanisms in the Copyright Act to allow right holders to be in a position to protect their rights. Because having a right that you can't protect is not a right.
At the same time, the implementation of those treaties will provide additional rights to right holders. As the treaties are adopted worldwide, they'll ensure more consistent protection and provide… and avoid piracy havens from developing. The treaties will… treaties will only benefit Canadian right holders if Canada is a contracting partner. And I'm reading from… quoting briefly from a legal publication, Lawyers Weekly, and it says… the headline is 'Canada lands on the US trade rep's priority watch list.' After becoming a fixture on the watch list of the United States trade representative, Canada has moved to the priority watch list in the recently released 2009 Special 301 Report issued by the USTR. Canada is joined in this category by China, Russia, Algeria, Argentina, Chile, India, Indonesia, Israel, Pakistan, Thailand and Venezuela. So in our submission we should… we need to rectify that situation. And the implementation of those treaties is the positive step that we need to take to get us there.
And the other thing that I say in passing, that those submissions were originally prepared by us in February of 2003. They're still topical to… topical and timely today, and some time has gone by that we need to capture as we move forward to find solutions to the problems that face us. Those are my submissions. Thank you.
Hon. Tony Clement: Thank you. Thank you very much, John. I appreciate that. And we'll move on to Mr.… Mr. Basskin of the Canadian Private Copying Collective.
David Basskin: Well, thank you, Minister, and we're very grateful for the opportunity to appear here, and also for the opportunity to take part this afternoon — I should say this evening — in the round table. I'm hoping we'll be the lucky draw winners and get the opportunity to speak, because accompanying me will be one of Canada's brightest young artists, whose name you've heard already. Sophie Milman, who Duncan Mckie mentioned, will also be coming along to hopefully have the opportunity to speak.
Well, the Canadian Private Copying Collective is a unique body. It was established after the Phase 2 amendments to copyright with the goal of collecting the levy on blank recording media that the… the Act included with Part 8 that was introduced in 1997. The Act calls for a single collective to be formed, and, in pursuit of that goal, various collectives in effect formed an umbrella collective. So CPCC, of which I'm a member of the board, represents groups that represent writers… songwriters and music publishers, and also groups that represent the owners of sound recordings, Canadian sound recordings, as well as Canadian performers.
The levy has been an unqualified success. And it was a response to a phrase we've heard already, market failure. When people copy music onto recordable media — by that I mean minidisk, cassette, recordable CD have been the… the subjects so far — when they're doing that, they're doing something that they value. People copy the music because they value the music. They're getting value. The goal of the private copying levy was to recognize that value by paying a relatively small levy per unit to a central collective for distribution to the people who create the music. It's impossible to tell people not to make copies. It hasn't been possible since the era of cassettes, or even open reel tapes, and that kind of behaviour isn't going to change. Nor is it the goal of CPCC to tell people to change that behaviour. You might as well tell the sun not to rise. They're going to make the copies. It is impossible for rights owners to identify and pursue, whether for the purpose of making a deal or to sue somebody, every individual who does so. The marketplace doesn't offer an alternative.
So in the place of this marketplace failure, Canada, along with more than 40 other nations, created two things: an exemption that legalized copies made for private purpose — not for redistribution but for private purpose; and at the same time created an opportunity to collect a levy, the amount of which is set by the Copyright Board of Canada. Now, since that came into place in 2000, it's been a success. More than 100,000 rights owners and creators have benefited from the levy. So far we've collected approximately $230 million. We distributed something like 180, $185 million. Distribution takes about a year to… to distribute each previous year, so we're generally about a year behind. But we move very quickly to distribute the money. This is not trivial money. This is money that makes a difference for the people we collect it for. It keeps businesses open. It makes it possible for publishers and producers to invest in new products, keeps bread on the table for the people who create the songs and the music.
So it's been a success in two ways. It's been a financial success in compensating rights owners, and it hasn't gotten in the way of people's ability to make copies. So if I'm so happy with it, why are we here? We're here because the marketplace has changed but the technological neutrality, which was the premise of the legislation, seems to have gotten lost along the way. People have been making copies for a long time. They made copies on cassette. It's less prevalent today. They made copies on CDs in enormous number, and that is fading away with the rise of what everybody knows and loves: MP3 recorders, DARs, digital audio recorders. It's not just an iPod matter, but the iPod's the best known product. So if I say iPod, excuse me. I mean iPods and similar devices. Yes, thank you. Thank you, Albert.
The levy presently is not applicable to digital audio recorders. And yet, if you look at the language of the legislation that was passed in 1997, it establishes a simple criterion to determine what media will attract the levy. Number one, it has to be a medium on which it is possible to record a copy of a sound recording. Well, you can certainly do that with a DAR. The second criterion is it has to be one which individuals ordinarily use for that purpose. I don't think anybody would maintain that people don't make copies of music on their iPods. As… as my colleague Catharine Saxberg said, nobody spends much time listening to an empty iPod. And finally, the Act says without regard to its physical form. In other words, ignore the physical form. Can you make recordings on it? Do people make recordings on it? That's what establishes it. And in fact, that's what the Copyright Board of Canada said twice. The Board agreed with us that the levy should be extended to DARs. Unfortunately, the courts have taken a different view and said that it's not included.
Well, I'm not here to debate the… the judgment. This isn't a court. But I am here to point to the inequity that's the result of this. We strongly support technological neutrality. When people copy songs, they're doing so because they value them. And that's what the levy recognizes. To exclude a medium simply because it is of a different form is contrary to the spirit of the legislation in '97. Without regard to its physical form is a good idea. So what we're asking for is a relatively simple change. We need to have the door opened up so that the purpose, the goal of Part 8 of the Copyright Act, legalizing private copies and compensating creators and owners of rights for the value of those copies, is met. We need to see the DARs included within the scope of the levy. Because it's quite… it's quite predictable. The use of CDRs for copying will decline. It is a natural function of the marketplace. People's preferences are changing.
Unfortunately, the way the law is today, the people who create the music will not be compensated. So Canadians will continue to make tens of millions of copies of songs, and the people who created the songs won't be paid. And that, to me, and that, to us, seems to be contrary to the spirit in which this consultation has been undertaken and contrary to the goals of the Copyright Act. So in short, we'd like to see the law amended to reintroduce, to real low the application of the levy to DARs, at rates to be set by the Copyright Board in a very public proceeding. We'd like to see that happen as quickly as possible. Or we'll go right back to where we were before the levy came in: people will be making copies, benefiting from the rights that are owned by creators and investors in copyrighted material, and nobody will be getting paid.
The factory in China gets paid. The shipper gets paid. Apple gets paid. The distributor gets paid. The retailer gets paid. The owners of more than 500 patented processes and innovations and copyrights and trademark and software inside these devices, they get paid. Everybody gets paid. So the proposition that those who create the material, which is the motivation for so many people to purchase the product in the first place, the proposition that they shouldn't get paid seems wrong. We're asking you to help out the creators, who you say you want to support and who we believe you want to support, by putting the levy back on digital audio recorders.
Hon. Tony Clement: Thank you.
David Basskin: Thank you very much.
Hon. Tony Clement: No, I appreciate that. Thank you very much, David. We'll move right along to Mr… is it Trosso (ph) or Trossow (ph)? Yes.
Samuel Trosow: My name is (inaudible)… joint appointment in the Faculty of Law and in the Faculty of Information and Media Studies, where I teach in the Library Science Program. And I came here from the United States in 2001, where I was previously a law librarian. I've been very interested in copyright since I've been here. I've recently written a book with Laura Murray called Canadian Copyright. And I'm… I'm very, very happy to be here.
What I want to focus on today is the question of the test of time. And most… most of my comments are geared to the very, very particular question of expanding fair dealing. And I am an advocate of including the inclusive terms 'such as' to make it clear that we are not going to focus on making people have to fit into one of the four categories of research, private study, criticism, review five news… news reporting. The… the real inquiry should be in the area of whether or not it's fair. And I think that a lot of people who are opposing the extension of fair dealing into the open-ended such-as realm are making the assumption that once you're… once you're past that threshold, it's automatically going to be fair. And that's not right. Because the Supreme Court has laid out a number of tests which you… you still have to satisfy. Just because you're claiming fair dealing doesn't mean that you're going to necessarily going to be able to make the factual showing. We've seen this in the recent copy… Copyright Board decision, where the Copyright Board came down very strongly in terms of expanding the criteria of fair dealing, but when applied to the facts and the record that was before the Copyright Board in that case said that this is just not going to cut it.
Now, in terms of standing the test of time, what is it that we want to avoid? I think what we want to avoid are situations where — and other speakers have alluded to this — situations where you have technology-specific details which are onerous and difficult to understand, susceptible to rapid obsolescence, and really prone to over-interpretation and ultimately a lot of litigation. Several examples of the types of provisions that I think you should avoid were in Bill C–61. Section 29.21, Section 29.22, the ones about time shifting and different media, 29.23 — while these were well meaning provisions that were… that were… that were intended to give consumers pretty much the rights that they already have in order to make Canadian law reflect what the reality of how people use digital devices, they were just so full of detail requirement, counter-requirement, that they were just not very helpful. They were… they were onerous, they were labyrinth. And this type of legislation should be avoided.
Canadians need to have laws that are easy to understand and that make sense. And I think that there will be more respect for the law if you… if you draft it in such a way as to avoid these long, long, long definitions with counter-examples… counter-exceptions.
Another example was what was in Section 30.01 through 30.04, the so-called educational exceptions, where we created these onerous except — definitions of lessons which were to be destroyed at the end of… at the end of the term. What sort of… what sort of way is… is that to ask, you know, faculty and academic staff to spend their time, having to destroy things at the end of the term? Section 30.04, which would have created a highly unusable educational exception, which pretty much owners could opt out of pretty much by saying we don't… we don't want to be… we don't want to be in this.
So… and I… so I think, in… in terms of standing the test of time and simplicity, adding the words 'such as' to fair dealing opens up the door for all of these legitimate uses that we all agree we need for… for purposes of technological neutrality, things that people are already doing. This does not mean that it's carte blanche. This does not mean free dealing. You still have to meet the criteria that have been clearly set down by the Supreme Court of Canada. The Supreme Court of Canada has… has given you a very, very, very clear, concise… this was a unanimous decision. And you should… you should try to harmonize what's in the Copyright Act with what's in the decision.
So there also seems to be a bit of confusion about… there also seems to be a bit of confusion about how… what is the effect of a license. There's been… there's been discussion at some of the previous round tables about this so-called smart fair dealing, where, if something's available by way of a license, that's… that should somehow defeat the fair dealing.
Now, there… there… there are different philosophical positions on what fair dealing is about, and I don't have time, obviously, to develop them. But basically, you've got… you… you've got this very, very narrow market failure approach that says we only allow fair use… fair dealing if… if there's not some other mechanism in order to capture the transaction. The Supreme Court has rejected that in Canada. That's the type of thinking that we've seen in a couple of cases in the United States, like the Texaco case and the Princeton Publishers case, where the availability of a license actually acts to defeat fair dealing. In the CCH case, the Supreme Court said in paragraph 70, "The availability of a license is not relevant to deciding whether a dealing has been fair. As discussed, fair dealing is an integral part of the… of the scheme of copyright law in Canada." They… they went on to say that, if a copyright owner were allowed to license people to use its work and then point to a person's decision not to obtain a license as proof that his or her dealings were not fair, this would extend the scope of the owner's monopoly over the use of his or her work in a manner that would not be consistent with the Copyright Act's balance between owners' rights and users' interests. These are… these are not my words; these are the words of the C… of the Supreme Court.
Hon. Tony Clement: Sam, I'm the… I'm the 21st century equivalent of the Vaudevillian hook. So I'm afraid your time is just about over. If you want to wrap up?
Samuel Trosow: Yeah. And… and I… I just think… I will submit something in writing that goes into some… some detail. I think that you have to make sure that you don't have other policies, such… such as the… the fear of undue, chilling damages that are going to dissuade people from utilizing their… their fair dealing rights.
Hon. Tony Clement: Thank you very much. I appreciate your interventions. We'll move right along to Stephen Waddell representing ACTRA.
Stephen Waddell: Thank you, Minister Clement. My name is Stephen Waddell. I'm the National Executive Director of ACTRA, the Alliance of Canadian Cinema, Television and Radio Artists. Our 21,000 members across Canada are English-speaking professional performers whose work appears in all recorded media platforms — film, television, radio, sound recordings, and digital media. ACTRA has been active in organizing digital media productions since the year 2000, and was the first union in the world to negotiate digital media provisions into our collective agreements, and the only performer union in the world to have undertaken and won a strike in 2007 over digital media issues.
We're encouraged to see the government undertake public consultations on copyright. Who would have thought that copyright reform in Canada would become such a controversial and sexy topic on Facebook, Twitter and your own consultation website? In the past a simple mention of copyright would have elicited blank stares. Now…
Albert Cloutier: Sorry, I'm just interrupting. If you could slow down a little bit for our translators. Thank you.
Stephen Waddell: Now citizens of all ages seem eager to talk about it.
So why is copyright reform important to our members? Two basic reasons. Our members want moral rights to protect the integrity of their work, and they want to be fairly and properly compensated for use of their work. While our members want to be seen and heard in Canada and around the world on multiple platforms, they also want their performances to be protected from distortion. And they want to be compensated when their work is exhibited to an audience. Like you and me, performers can't afford to work for free unless they themselves choose to do so. So Canada needs fair copyright laws that balance the interests of Canadian consumers with the rights of creators and makers. In a borderless and open digital world, balanced Canadian copyright law would strengthen creators' rights to ensure that Canadian creators can afford to make a living as artists and that they can protect their work from abuse.
I'd like to outline now briefly four ways that Canadian copyright law should be reformed. First, implement the WIPO treaties, and you've heard that a lot around the table today. There's no good reason for our failure to implement changes to our copyright laws in accordance with these two treaties, which we signed back in 1997. Those treaties would give performers a full range of economic and moral rights in sound recordings. And while we're at it, we urge the government to support the WIPO Performers Audio-Visual Treaty, which is presently before WIPO, which would provide performers rights in audio-visual works. It really doesn't make any sense that performers in audio-visual productions have fewer rights than those in sound recordings. Many European countries have already established rights for… for performers in both audio and audio-visual productions. Giving performers such rights will foster the economic development of the creative industries in Canada by sustaining and protecting Canadian performing talent. And to be clear, by asking for our right to remuneration, we're not asking for two bites of the apple — once under our collective agreements and then again through neighbouring rights. Instead, we say if the use is covered by one of our collective agreements, then the… that agreement would prevail. It's only with respect to new uses that we'd… performers would be able to… to have the option to either negotiate fees or pursue a tariff at the Copyright Board.
With respect to protecting the integrity of performers' own performances, which are known as moral rights, every performer, whether an international star or just starting out, needs moral rights to ensure that their performances are not modified or distorted without their consent. Without moral rights, we risk not only our international reputation with our trading partners, but also we may do irreparable harm to our arts and culture industries. Excuse me.
And with our right to remuneration, well, starving artists can only produce work for so long. At some point they need to eat and pay their rent. So our second point is that Canadians' private… Canada's private copying regime and audio recordings has become an essential to Canadian recording artists. And I'm going to parrot my colleague David Basskin on this. It's an excellent framework for — in our view — for how all creators should be paid for use of their work in the digital world. Just let me explain briefly.
Look, first of all, let's… let's expand the private copying regime so it applies to all technologies normally used to copy music. The current regime only covers the old school storage media: blank… blank compact discs and cassettes. And when was the last time anybody used a cassette to put in their… their Walkman? These storage media are fast becoming obsolete. They've been replaced by MP3… 3 players and other digital storage devices. Please update the law to include these new form of digital media devices. And let's build on the private copying regime and collective licensing and… to give consumers what they want: the right to transfer music to various platforms in exchange for remuneration flowing back to the… for the creators and the makers through collective licensing.
Third point. It's clear and generally agreed that we need stronger penalties in the Copyright Act for commercial copyright infringement. But rather than focusing on increasing statutory penalties for non-commercial infringement, we suggest the government concentrate on reforms that facilitate legal access for consumers in exchange for fair compensation for creators and other rights holders through collective licensing.
Fourth, Canada needs effective complaint-based mechanisms for right… rights holders who object to their work being used in digital media without authorization, with one important qualification. It's not the job of ISPs to determine the legality of material being transmitted through their networks. However, since they may be facilitating access to an offending work, ISPs must be involved in resolving the complaint. You've heard they already are. In our view, it's the responsibility of rights holders to give notice of copyright infringement to ISPs. Then it's the responsibility of the ISPs to assist in resolving the complaint.
Finally, somehow there's a public perception that copyright law exists to protect big business. The reality is there are three key copyright stakeholders: creators, makers, and consumers. Makers and consumers can and do speak very effectively for themselves; I'm here today speaking for Canada's professional performers in recorded media, and they say they need more rights. They see they… they need their fair share of… of the economic value of their work. If we value the contribution of creator artists to Canadian art and culture, then we need to support legal reforms that protect and support artists. We don't need to adopt the USDMCA approach to copyright reform; rather, we should look to European models premised on collective licensing and the support for arts and culture in developing our made-in-Canada copyright law.
Canada's current copyright law is older than Napster, which revolutionized the music business. Canada's copyright needs to be modernized to recognize the new and ever-evolving forms of exhibition and distribution, and balanced, reflecting the interests of creators, makers and consumers. And to that end, I've got a little leaflet here, which I leafleted all of you, being a good trade unionist, before the meeting. Making the point: copyright law should be modern and balanced. Thank you very much, Mr. Minister.
Hon. Tony Clement: Thank you. Thank you very much for your submissions. And we'll… I… I just want to state for the record that typically I go counter-clockwise and James Moore goes clockwise in these things. So I want to apologize to our last two… (Laughs)… proponents here, but that's the way the cookie crumbles. Is it Professor D'Agostino?
Giuseppina D'Agostino: Yes.
Hon. Tony Clement: Yes. Yeah.
Giuseppina D'Agostino: Well, it's an honour to be here, Minister Clement, even though I'm the penultimate speaker this afternoon. My name is Giuseppina D'Agostino, and I'm an Assistant Professor at Osgoode Hall Law School and the founder and Director of IP Osgoode. That's Osgoode's new IP and tech program. So for more copyright fun, I would encourage you to visit our website, which is IP OSGOODE: Intellectual Property Law & Technology Program
Now, among the many potential issues that I could address, I wanted to talk to you about just three things that I think are necessary to help position Canada as a global leader in copyright policy, namely the need to consider: one, process in copyright reform; two, copyright within IP and other areas of the law; and three, substance and simplicity.
So first, process. While the essence (?) of the Copyright Act is paramount, the way at which we arrive at the right stuff is also key. Besides the importance of copyright being recognized within many more government departments — and this multi-departmental web of work also merits its own discussion — we need to found process mechanisms that we can… that can weather us through many more copyright reform cycles. And here I think we can learn from other countries. So the UK, to name but one example, is getting it right. Out of the 54 recommendations from the 2006 Gowers review, one which saw immediate action was the need for ongoing strategic analysis in IP policy. This led to the 2008 establishment of the Strategic Advisory Board in IP. And some of you may know it as SABIP.
Now, SABIP provides an independent and evidence-based approach to policy reform. SABIP recognizes that — and here I quote — "Policy developments, especially those requiring legislative change or international agreement, will probably take significant time to be implemented. Yet the current economic situation is causing a particular spotlight to fall on the need to maximize urgently the contribution of the creation and exploitation of intellectual property as an aid to economic recovery and future prosperity." Do I need to slow down? OK.
So we need to be guided by more independent, evidence-based research. This should not be something that is done at the drafting stage. Indeed, it should be the evidence that guides the policy reform, and not the interest groups. There is a difference between evidence-guided reform versus reform guided by the loudest voices. The loudest voices don't equal the soundest voices. In Canada we see that the lack of evidence-guided reform has led to a climate lacking trust, cooperation and reason. For innovation and creativity to flourish, we need more transparency, collaboration, and harder facts. And it is here where the government can continue to lead, and should lead, and forge more open and transparent links with industry and academia. And here, establishing a team like SABIP is a first step.
So second, copyright within IP and other areas of the law. Now, copyright is just one piece of the puzzle. When we speak of fostering innovation and creativity generally, it's impossible to see copyright in isolation of the other IP areas, especially when some of the fundamental principles underpinning protection are shared, and when rights holders often obtain duplicate and sometimes triplicate protection within other areas of IP, such as patents, trademarks and industrial designs, without rhyme or reason. This can't be efficient or helpful to foster innovation. Here Canada's leading software and gaming industries are two cases in point where we need to strategize on this IP convergence and complexity.
We should also recognize that the Copyright Act should not and was not meant to do it all and fix the entire kitchen sink, and that we should be less demanding of all the issues we want it to solve. Other areas of the law, such as competition, labour, education, consumer law, and privacy law, also represent reform options across various levels of government. In addition, regulations and self-standing (inaudible) generous legislation can also provide redress.
And to my third and final point, substance in simplicity. This point has been made numerous times by my colleagues, and just now by Sam, and members of the general public. For laws to work, they need to be clear. We need to be able to understand them. Simplifying copyright should not be an afterthought… an afterthought, as considered in the federal government's 2002 Section 92 report. If you remember, it was at the very end, Simplification of the Act. So when we speak of copyright, the Act needs to articulate a purpose, which we don't have right now, a vision at the outset. Of course this is not a panacea, but from this vision flows the substance. In this purpose, the copyright bargain with the public must be recognized, as must the need to protect creators.
Increasingly, authors and users have been overshadowed by provisions largely favouring rights holders. And here a theme which has consumed a lot of my own work on freelance authors is that creators are often not rights holders. These important copyright contract matters merit legislative intervention. Again, to mention the UK, a government commissioned study is currently underway on this very issue. I've argued for clearer provisions favouring weaker parties, such as creators, especially in the era of standard form contracts, as just one possible solution. And here contract law of course also affects users. Now, these same simple principles apply to fair dealing and technical protection measures as well.
So I'll end with that. And I think that by just focusing on these three things, we will be taking a major step forward towards a more innovative, competitive and creative Canada. Thank you.
Hon. Tony Clement: Thank you very much. I appreciate your intervention. And of course you are obviously going to be last but not the least. So David, Media Internet Policy and Public Interest Clinic.
David Fewer: Thank you. Giuseppina said she was the penultimate speaker, so that makes me the ultimate speaker.
Giuseppina D'Agostino: (Laughs)…
David Fewer: Thank you. Thank you. So I'm the Acting Director of CIPPIC, the Canadian… the Samuelson — Glushko Canadian Intellect… pardon me… Canadian Internet Policy Clinic at the… no, was it… Internet Policy and Public Interest Clinic at the Faculty of Law of the University of Ottawa. I've complained about the length of the name repeatedly, but they're not going to change it. We are Canada's only technology law clinic. And our mandate is to advocate on behalf of the public interest at the intersection of law and technology.
We've been involved in copyright policy debates since our inception in 2003, both before courts and in debates over legislative approaches to copyright. And I would suggest that in the things I'm going to… I'm going to say today there are two principles that are kind of guiding these comments. And first, it's… it's the… I guess the… the clarification that our limitations and exceptions in the Copyright Act are grounded in… in public policy decisions. And that's important to maintain, to… to… to remember as we consider changes to the Act and changes to those rights and… and… and limitations. Two, I would argue that some of the solutions to copyright's thorniest digital challenges will be found in… in better collective administration of copyright, and not necessarily by granting rights holders and distributors ever-greater control over work. Sometimes control is the enemy of success in copyright.
So looking at how the first of these principles can play out in some of the issues that we're talking about today, exceptions and limitations aren't simply starting points for bargaining. OK? They… they try to do things. They try to do important things, things that serve the public interest. They facilitate innovation. They facilitate education. They facilitate creativity at the end of the day. At bottom, I'd argue that exceptions and limitations are what preserve the constitutionality of copyright. Copyright, after all, deals in rights in expression. And expression of course is guaranteed by Section 2(v) of the Charter of Rights and Freedoms.
Now, this insight… insight, I would argue, suggests certain approaches to important public policy issues in… up… up for grabs, to a certain extent, in copyright policy debates. One, consider WIPO implementation. I would argue that… that this way to think about exceptions and limitations argue that C60 was the wrong approach. Adopting a DMCA type approach in Canada is not the way to go. We must permit circumvention of digital locks for legal purposes. We simply… we similarly must permit legal users… legal uses of content in the face of digital locks to obtain the services or devices to allow them to access content. Remember, we're talking about legally accessing content here, legally using content, not infringing copyright.
I had comments on notice-and-notice, but my comment… my… my friends… my copy… my special copyright friends have done a good job already talking about notice-and-notice and why it's preferable to notice-and-termination. This applies both to ISPs and to search tools. I'd simply endorse those comments.
Similarly, Sam, I think, has done a good job talking about fair dealing. At present it's simply too restrictive. We're… we're talking here about dealings that are fair, but yet not captured by the Act in… in some way. Think about time shifting, the VCR. We've had a great consumer tool live its life and become obsolete without ever having a legal home under the Copyright Act. How is that possible? Now we have threats to kind of the next generation of that device, of… of that… of that activity with the network PVR.
Similarly, parodies. Do parodies have a home in Canada? I would hope so. I… you've seen how parody pre-existed copyright by millennia. I don't think we outlawed parodies in Canada when… when we created the Copyright Act in Canada; nonetheless, we do have some court decisions that seem to go down that road. I think we should be clarifying our Act so that parodies — fair parodies, right? Not unfair parodies; fair parodies — have a legal home in Canada.
Similarly, consumer back-ups. Why are… are… are, you know, consumer back-ups, why are they illegal? These are things that enhance the value of content. At the end of the day, I would argue that consumer back-ups enhance rights holders' interests. There should be a legal space for these things.
Now I want to talk about a few things that we haven't discussed a great deal today, but again, keeping in mind the… the value and the role of exceptions and limitations. Think about the contractual elimination of exceptions and limit… exceptions and limitations. So if… if exceptions and limitations uncover… reflect important decisions on public policy issues, then those decisions shouldn't be overturned. We shouldn't overturn our legislators in things like standard form contracts. This is especially true for our public institutions: libraries, educational institutions, museums and art… museums and archives. These are institutions which, you know, by mandate, act in the public interest. We have precedent for this kind of approach, saying that you cannot overturn the fair dealing rights for these institutions, in the UK act, and I would argue that we could look to… to… to that approach for… for support.
And finally, think about the statutory damages. I would argue that statutory damages in the non-commercial context work a mischief. They cause risk-averse public institutions in particular to abandon user rights and to negotiate licensing conservatively at the expense of taxpayers, in some cases students, patrons, and in… in other contexts. I would argue that statutory damages serve no purpose in that context. These are not institutions that go out to infringe copyright. These are institutions who… who live to serve the public interest.
Similarly, I would say that there's no place where… statutory damages have no place where an individual is acting with a bona fide belief in non-infringement. If you're trying to exercise your fair dealing rights but perhaps it's… it's close, statutory damages serve to inhibit innovation, inhibit creativity.
Finally, a brief comment on the public domain and… and Crown copyright in… in this context anyway (inaudible) thinking about the… the role of exceptions and limitations. The public domain is our common heritage. I… I would call on… on this government to look for ways for facilitating access to what is after all our common heritage. Digitization initiatives. We haven't been talking about digitization initiatives in this context; we should be. Again, statutory damages. What role do statutory damages play when people are trying to gain access to and… and… and create greater access to, you know, historical images, historical data? There are ways we can address these issues around addressing presumptions of non-infringement, for example, or improving or streamlining the unlockatable copyright provisions.
And finally, I… I would argue that we would… we should take a look at Crown copyright and argue whether it continues to serve the public interest. Should we be scaling it back? Should we be eliminating it entirely? Is that the best way to promote access to government works? How does Crown copyright fit in the greater scheme of copyright?
Very brief comments with respect to the ideas around excessive control. Our view here, and you've heard this said a few times here, that collective licensing is a… is a… is a better approach. We would endorse Sack's (ph) approach to file sharing, looking at… looking at… for ways to enable to… consumers to use… to gain access to content in ways that they want to, in ways that they're demonstrating that they're going to gain access to it, and in ways that allow rights holders to be paid.
I think we've just started to go down that road, to talk about those kinds of solutions. I think we could… the government could be doing things to help facilitate that conversation. And I'd like to thank you for providing us with the opportunity to… to make these submissions.
Hon. Tony Clement: Well, thank… thank you. I… I very much appreciate that, David. And I want to take this opportunity to thank everybody. Unfortunately, I'm just about to turn into a pumpkin, so I've run out of time and I want to — that's a Cinderella reference. I'm not going… I'm not going on tour. I can assure you of that.
I do want to thank everybody here. What I found, as these round tables have proceeded — this is round table number eight in total — is that the quality of the submission has been absolutely stupendous, and certainly has really… I don't think there's any stone that has remained unturned in terms of the… the submissions and… and what has been brought forward for the public policy debate. So I just want to thank everyone. Obviously this is going to be a matter of public record, and we are continuing to receive hundreds upon hundreds of submissions on line and by all means available to us. And that will continue right up until the deadline.
So Albert, do you have anything else that needs to be said at this point?
Albert Cloutier: No, I don't think so. Just encourage you to use the on-line process to send us your comments.
Hon. Tony Clement: Great. That's a wrap, folks. Thanks again. Appreciate it.