How do Canada's copyright laws affect you?

Like most Canadians, I am both a producer and consumer of works that fall under the purview of the Copyright Act (henceforth, the Act). For much of my career, I have earned my living as a software developer. I am also a writer, a photographer, and a musician — although I (thusfar) pursue these activities primarily in non-commercial arenas. Furthermore, I am a student.

Impact of copyright on software development

As a software developer, copyright has a direct bearing on several aspects of my professional life. When I work on behalf of an employer, the rights that the Act defines form part of the value proposition that underlies my employment contract — i.e. copyright is one aspect of the value of software. ¹

Copyright also represents a potential barrier to the use and integration of software products produced by other parties. In the absence of direct contractual relationships, or explicit license agreements, the Copyright Act limits the rights to reproduce, modify and distribute, which are necessary elements of the construction of software systems. To the extent that it prevents novel and useful combinations of software products from being legally created, copyright is therefore also detrimental to the value of software.

Increasingly, the software ecosystem is being divided into "proprietary" and "open" camps — i.e. into camps that seek to maximally restrict rights grants to software products, in an attempt to extract more rents from them, and camps that grant rights more liberally, including rights to reproduce, modify and distribute. It is clear that the latter camp is producing a public good in the form of software that can be used "freely". It is also clear that the former camp contributes economic value, which is also a public good. Unfortunately the two camps are fundamentally at odds with each other and have some difficulty co-existing.

Both sides, in varying ways, attempt to use intellectual property legislation, including the Copyright Act, to protect their interests. This is as it should be, insofar as this is consistent with the purpose of that legislation.

By contrast to the statutes of many other jurisdictions, Canada's Copyright Act is notable for the fact that it does not have any explicit purpose, either in the Act itself, or in the Constitution. However the statute reflects, in part, the tradition based on the Statute of Anne ². So it is reasonable to presume that the purpose of the Act is at least vaguely connected to the idea of encouraging learning, as found in the full title of that law; or, as the U.S. Constitution puts it: to promote the Progress of Science and the useful Arts. The Canadian Supreme Court has taken an instrumentalist view of the purpose of the Act, as noted by Daniel Gervais:

It is clear, then, that anti-competitive advantage is not an appropriate result of the application of the Act. Nor is any other result that would tend to unduly favour the protection of authors or other rightsholders over the "encouragement and dissemination of works". Unfortunately, such results have become all-too-common in the software world, and elsewhere — particularly in the U.S., following the adoption of the Digital Millennium Copyright Act (DMCA). For example, the protection of so-called Technological Protection Measures (TPMs) under that act, together with the licensing terms of the Content Scrambling System (CSS), make it seemingly-impossible to distribute DVD playback software under the GNU General Public License (GPL) in the U.S., even though such software can legally be produced and used in other jurisdictions. ⁴

Impact of copyright on cultural participation

The purpose for the Act that Gervais deduces makes it plain that the goals of copyright include a public interest in the production and use of works of art and intellect — that is to say cultural artifacts. However the model of cultural production that is implied by the Act is fundamentally not a participatory one. Production is assumed to be professional, paid, and for commercial gain. As Larry Lessig notes, this comes with an increasing cost in the limits it places on legal culture:

This, however, has never been a good fit for how culture actually works in people's lives. To frame the issue with a specific example, when I play my guitar and sing a song with my family and friends, I am simply behaving as my predecessors have since time immemorial. I am also performing a work, arguably in public, and potentially in violation of the Copyright Act, depending on the song. But this type of infringement has typically been of little concern to rights-holders. If I were to record myself performing that same work and share that recording with the same group of peers, it is still unlikely to attract much attention or concern. However, if I were then to post that recording to a social network, it is possible that it would become a fad of the week and reach an enormous, potentially global, audience.

This would seem to be entirely consistent with promoting the public interest in the dissemination of works of art. However it still might be implicated in a class action lawsuit against YouTube in the U.S., over copyright infringement. ⁶ This is precisely the risk that Lessig warns of: that commercial interests may exploit the Act to make themselves unavoidable gatekeepers to culture, in direct opposition to the goals of the Act.

Impact of copyright on education

Education routinely involves the use of protected works, both inside and outside the classroom. Given that, as noted above, the Act derives from the tradition of the Statute of Anne, learning (in the sense of knowledge) would seem to be a core value. There is a clear public interest in education. It would therefore seem sensible that, if any activities can reasonably be allowed to override the protections of the Act, educational uses should be among them.

In fact, the Act does explicitly set out some particular uses for educational purposes that are exempted from copyright, including reproduction required for tests or examinations. However these explicit exemptions cover only a small fraction of the educational uses of protected works. Other educational uses are likely protected under the "Fair Dealing" provisions, but this is frequently unclear. In particular, there has been some controversy about the legality of using publicly-available material from the Internet in an educational setting.

Because Internet content is an integral part of students' learning experience in Canada, education ministers strongly believe this issue cannot be ignored. Minister Muir explains,

Meanwhile, Access Copyright, the collective licensing agency, (among others) continues to lobby strongly that educational exemptions should be limited, and in particular that royalties should be paid for such uses. ⁸ It is unsurprising that they would make this argument, since they would be the ones to collect such royalties, but it would not seem to be consistent with the purpose of the Act, or with the public interest, to divert limited education resources into copyright royalty payments that may or may not ever reach the creators of the implicated works.

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How should existing laws be modernized?

Align the Copyright Act with the ordinary activities of Canadians

Canadians value the works that are protected by copyright. They also tend to value law and order, generally. It is therefore not in the Canadian interest to have an ineffective, unenforceable Copyright Act. If there is widespread disregard for the Act, as has been suggested by some seeking to increase its punitive capacity, it is likely because the provisions of the Act are based on faulty assumptions about how Canadians interact with protected works in their routine use of those works. For example, section 30.6(b) of the Act permits a single backup copy of a computer program to be made. However ordinary consumer backup systems are quite likely to produce more than one copy in the course of ordinary use. Canadians who fully intend to abide by the spirit of the provision may nonetheless be in violation of its letter. Such violations do not represent any real harm to rights-holders. The law should therefore be adjusted to be more harmonious with actual usage patterns.

Distinguish commercial and non-commercial action

There are at least three basic strategies that should be applied to re-align the Act in this way. First, the Act should continue to draw a strong distinction between commercial and non-commercial use of a work. Non-commercial reproduction of audio recordings for private use is already carved out by Part VIII of the Act. Canadians, in their habits, make no strong distinction between audio recordings and, for example, video recordings. Both are cultural artifacts with similar properties; both should be treated similarly under the law.

While the Private Copying regime defined in Part VIII of the Act is not without problems — not the least of which is the implication of the national treatment principle of the WIPO treaties — it is at least widely understood by Canadians to recognize that non-commercial actions do no significant harm to rights-holders, although they may have a legitimate claim to some form of compensation. This framework is in stark contrast with, and strongly preferable to, the statutory damages provisions of the Act, which define penalties that are grossly disproportionate to the actual harms (if any exist).

As such, the statutory damages provisions of the Act should either be removed, or limited to cases involving infringement for commercial purposes. The principles underlying the Private Copying regime should be applied to cover equivalent actions involving works other than audio recordings. Where necessary, this may involve expanding the levy regime to compensate rights-holders, however this need not be automatic.

Generalize Fair Dealing, as per CCH

Certain uses of protected works are already recognized as "Fair Dealing" under the Act. Rights-holders are not entitled to compensation for qualifying uses of works. This is not an accident, or something incidental. It is central to the propositions that have underpinned statutory copyright, dating back to the Statute of Anne: that the rights granted are limited; and that they are granted for the benefit of the public, as much as for the creator. The Supreme Court of Canada has affirmed that:

Canadians, for the most part, accept and believe in this notion of balance between the interests of owners and users. However the range of actions covered by the statutory definition of fair dealing is not sufficient to reflect the public interest. Most Canadians would probably agree that parody and satire should be in scope of the fair dealing exemption, while it is at best uncertain that this is the case under the existing Act. ¹⁰ An appropriate solution would be to generalize the provision, such that the list of purposes that are considered fair dealing is inclusive rather than exhaustive. ¹¹

Establish a "good faith" provision

Naturally, such a change would create an ambiguity in what specific uses were covered by the fair dealing provisions. In the long run the courts would develop appropriate criteria to make the determination — likely based on the six-step test that is present in CCH — however there will inevitably be gray areas in these determinations. There should therefore be a "good faith" limitation on remedies: where a user reasonably and sincerely believes that his or her use of a work is not infringing, injunctive relief should be the only available remedy. This is already the case under s. 39 (1) for cases where the user is unaware that an unregistered work is protected. The concept should be extended.

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Based on Canadian values and interests, how should copyright changes be made in order to withstand the test of time?

Laws, like any other cultural artifact, must occasionally evolve along with the assumptions and environment of the society that created them, or be doomed to obsolescence and irrelevance. Obsolete laws are typically difficult, if not impossible, to enforce, as they no longer have any objective connection to the day to day activities of citizens.

Technological Neutrality

There are some key principles that, if observed, would tend to make the Act resilient to change and therefore able to withstand the test of time. First, the Act should be technologically neutral. Provisions that are tied to particular technological implementations are doomed to become nothing more than excess baggage when the underlying assumptions they rest on are replaced. Provisions in the Act that are specific to videocassettes, for example, will soon make about as much sense as provisions specific to stone tablets or zoetropes would: while these formats are still available to the public, neither is in widespread use. The Act should be limited to specifying principles and actions. The courts are quite capable of interpreting how to apply those provisions to the facts of particular technologies, as is their proper role.

Copying is not always reproduction

Furthermore, the Act must continue to recognize that works are distinct from their embodiments. The works considered under s. 5 of the Act are necessarily information products. Representations or embodiments of information are inherently fungible — that is to say that bits are bits. It is irrelevant if a data file is stored on a floppy disk, a CD-ROM, a flash drive, or some other medium. All represent the same information, therefore all embody the same work. Incidental copying, for instance to load a work from disk-based storage into memory during the execution of a computer program, should not be considered reproduction within the meaning of section 3 of the Act. These incidental transformations are part of the routine life cycle of a single instance of a work, and are necessary in order to make use of the work.

Exceptions, such as defined for copies of computer programs in section 30.6, for ephemeral recordings made during the course of a "live" broadcast in section 30.8, and elsewhere in the Act, could be substantially simplified and rendered more harmonious with the actions they are intended to permit, if it were simply understood that copying is not the same thing as reproduction. The latter requires some form of severability, such that separate exploitation of the new copy is possible. ¹² (In this sense, copying is not truly the chief concern of the Copyright Act at all — rather it is exploitation.)

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What sorts of copyright changes do you believe would best foster innovation and creativity in Canada?

Cultivation of the Public Domain

Innovation and creativity flourish in environments that promote the free and open exchange of ideas; the sharing of cultural output; the recognition of originality; and the ability to build upon the past. New ideas are not conceived in a vacuum, they flow from interaction and interchange. It is likely no coincidence that cultural industries tend to favour weak copyright regimes when they are young and vigorous, but prefer increasingly strict regimes once they are more established. ¹³

Creativity is most vibrant when it can act in collaborative ways with the existing body of culture. Most creative works draw in subtle and obvious ways on existing material. Historically, when copyright term lengths were much shorter, most protected works were quickly returned to the Public Domain, where they were available to be used freely in new creative endeavours. In fact, one can see this as the fundamental bargain of copyright — that a temporary monopoly is granted on the understanding that the work will eventually become the "property" of the public. However term extension after extension makes it such that, now, essentially no new works enter the Public Domain (except by explicit grant). This is an untenable position for the future of creative output.

The obvious solution to this problem would be to reverse the term extensions. This may of course be difficult — in particular because of the requirements of the Berne Convention and other international treaties. (Although what can be negotiated can also be re-negotiated.) Failing that, it becomes essential that the balance of copyright protection include wide and flexible rights to produce derivative works — without requiring the permission of rights-holders. A sufficiently-broad flexible fair dealing provision, as discussed above, could meet this goal.

Copyright does not directly promote creativity

Although strong copyright laws are frequently promoted as a means to promote innovation and creativity, it does so at some remove. The protections of the Copyright Act accrue primarily to publishers rather than to primary producers of cultural artifacts. As noted by Ruth Towes:

The primary effect, in practice, of copyright protection is not to promote creativity and innovation; it is to enable and privilege particular business models. The dynamic holds in the software industry, and presumably in other creative fields as well. The authors or producers of original works typically trade their rights to other entities, for short term considerations, for example as part of an employment contract. It is these publishers, aggregators, and distributors who are the primary beneficiaries of extended copyright terms and other protections.

Business model protection limits new opportunities

By contrast, overly-restrictive copyright laws may discourage or even prevent some innovations or creativity altogether. As a trivial example, one proposed amendment that appeared in last year's Bill C-61 would have explicitly denied authorization of a "network personal video recorder service". Such services have recently been ruled legal in the U.S. ¹⁵, and are being actively developed.

Circumvention of Technological Protections for legal purposes

More generally, so-called "anti-circumvention" provisions may place substantial limitations on the ability to develop products and services based on any existing technologies without the authorization and support of the incumbent rights-holders who implement Technological Protection Measures (TPMs). Rights-holders may have competitive or anti-competitive reasons to withhold such cooperation. Furthermore, the rights-holders may not be capable of cooperating — for example, because they no longer exist. It is therefore essential for innovation and creativity that any protection of TPMs must be limited, if it is enacted at all. In particular, circumvention for any legal or authorized purpose must itself be legal.

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What sorts of copyright changes do you believe would best foster competition and investment in Canada?

Monopolies are inherently anti-competitive

When considering the competitive implications of copyright, one must remember that copyright, in the Statute of Anne tradition, is not a natural right. It is a monopoly power created by the state, for particular purposes. Monopolies are generally seen as inherently anti-competitive — in fact the lack of competition is usually a defining characteristic. It is at least slightly odd to talk about promoting competition by means of an instrument that, inevitably, prevents it. The most important thing that copyright can do in respect to competition is to interfere with it as little as possible.

Incumbents must not control access to markets

In particular, as has been noted in the previous discussion of the software industry, copyright can play a gatekeeper function. To the extent that this enables incumbents to prevent new players from entering markets, this is clearly anti-competitive. To avoid this, there should be clear statements in the Act that, for example, reverse engineering of a work for the purpose of establishing compatibility, is legal, regardless of any permission or authorization from the rights-holder. This must be true even if circumvention of a TPM is required to do so. There must be no implied or explicit right for a content provider to control what devices can play that content.

Consumer protection against third party interference

Similarly, there should be broad protections for consumer rights to treat their property as they wish. The Supreme Court has affirmed such rights (in Théberge, for example) under the current Act. Future changes should strengthen and enhance these protections, not weaken or remove them. (Regulation of property rights separate from copyright is, of course, a matter of provincial authority under s. 92 of the Constitution Act. Federal law should not intrude into this arena at all.) In particular, any protection of TPMs that might be introduced to the Act for WIPO treaty compliance should be properly constrained to ensure that consumers retain control over devices they own.

Liability shield for intermediaries

Furthermore, intermediaries such as Internet Service Providers (ISPs) and search providers should be shielded from liability for the infringing actions of their customers. Similarly, creators and providers of software and other products or services that have substantial non-infringing uses should also be protected. Liability should rest with the individual who commits the infringing action. The concept of Secondary Infringement should be removed from the Act, or at least limited to cases where there is explicit knowledge and intent to infringe.

To the extent that the Act includes a "notice" regime, by which rights-holders are entitled or required to inform intermediaries of specific infringements, this should be a "notice-and-notice" system, consistent with current voluntary practices in Canada. So-called "notice-and-takedown" systems, such as the one present in U.S. Law, are too vulnerable to exploitation for improper purposes, and to inadvertent error. ¹⁶ The public interest in promoting the encouragement and dissemination of works is best served by requiring a rights-holder to present evidence of actual infringement prior to being able to assert any remedy that may limit legitimate expression.

What kinds of copyright changes would best position Canada as a leader in the global, digital economy?

Canada's position in the "global, digital economy" is already quite admirable. The Global Competitiveness Report 2009-2010 ranks Canada's overall competitiveness in 9th place (improving over last year), with an innovation ranking of 12th (ahead of, for example, the U.K.). Strikingly, in the category of "Intellectual property protection", Canada ranked ahead of the U.S., the U.K., and Japan. ¹⁷

However, when we consider leadership, we must ask ourselves in what direction are we leading, and to what end? In that sense, Canada should focus on copyright changes that affirm the purpose of the Act: promoting the public interest in the production of works of art and the intellect. The protection of economic rights is a means, not an end. In particular, Canada has a leadership role to play in pursuing the so-called WIPO Development Agenda. A re-balancing of international treaties to reflect the needs of developing nations for access to knowledge; to enhance cooperation and exchange with research and development institutions; and to support a robust public domain ¹⁸ can only enhance our own public interest in those areas.

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¹Frequently this is a secondary value; when software is developed primarily for in-house use by the organization that sponsors its development, the benefits of copyright are relatively unimportant. Copyright is more clearly relevant to software that is intended to be sold in the open marketplace. (Return to text.)

²The long title of this statute — generally considered the first fully-fledged copyright law — is "An Act for the Encouragement of Learning, by vesting the Copies of Printed Books in the Authors or purchasers of such Copies, during the Times therein mentioned". (Return to text.)

³Daniel J. Gervais. "The Purpose of Copyright Law in Canada" University of Ottawa Law & Technology Journal 2.2 (2006): 315-356. (Return to text.)

⁴See, for example, Forbidden items: DVD Playback, as retrieved on 2009-9-12: "DVD playback (of CSS encrypted DVDs) may be a violation of the United States DMCA, because it may be considered circumventing a copyright protection mechanism. Additionally, MPEG2 is a patented codec, so even DVDs without encryption cannot be played." By contrast, the Helsinki District Court refused to convict a pair of defendants who were charged under Finnish copyright law, on the grounds that CSS protection is not "effective"; however the decision was reversed on appeal. This case has now been referred to the European Court of Human Rights. See, for example, Finnish CSS case application lodged in the European Court of Human Rights, as retrieved on 2009-9-12. (Return to text.)

⁵Lawrence Lessig, Free Culture (New York: The Penguin Press, 2004), at 186. (Return to text.)

⁶The plaintiffs in the suit include the National Music Publishers' Association, which might well hold, or represent the holder of, the songwriting credit for the work. While the complaint refers primarily to unauthorized posting of commercially-produced video clips, the injunctive relief sought could cover it as a performance of a Protected Work. See The Football Association Premier League Limited, et al. v. YouTube, Inc., et al., 07 Civ. 3582 (LLS). (Return to text.)

⁷Council of Ministers of Education, Canada, Priority issue — educational use of the Internet — discussed with federal ministers, as retrieved on 2009-9-13. (Return to text.)

⁸See, for example, the comments of Roanie Levy in the Gatineau Round-Table discussion during this very consulation process, Museum of Civilization, Gatineau, QC. , as retrieved on 2009-9-13:

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⁹CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13 (CanLII), [2004] 1 S.C.R. 339, at para. 48. See also Théberge v. Galerie d'Art du Petit Champlain inc., 2002 SCC 34 (CanLII), [2002] 2 S.C.R. 336, 2002 SCC 34, at para. 31: "The proper balance among these and other public policy objectives lies not only in recognizing the creator's rights but in giving due weight to their limited nature." (Return to text.)

¹⁰See, for example, Michel Geist at Parody and Copyright: In the Government's Own Words, as retrieved on 2009/09/12:

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¹¹See, for example, Howard Knopf at Six Ways to Simplify Canadian Copyright Revision and WIPO Ratification, as retrieved on 2009/09/12:

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¹²In Théberge, the Court held that mere physical transformation is not countenanced by the term "reproduction" in holding that "[t]here is no multiplication and fixation alone is not an infringement of the original work." [Théberge supra, at para. 50] The migration of a digital representation of a work through various storage formats is a series of fixations. Only when multiplication occurs can there be an infringement. Ephemeral or hypothetical multiplications that do not produce a separately exploitable copy can reasonably be ignored as harmless. (Return to text.)

¹³See for example, Lessig supra, pp. 53-61. (Return to text.)

¹⁴Towse, Ruth, Copyright and Creativity: An Application of Cultural Economics. Review of Economic Research on Copyright Issues, Vol. 3, No. 2, pp. 83-91, 2006. Available at SSRN. (Return to text.)

¹⁵See: Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008). (Return to text.)

¹⁶ See: Electronic Freedom Foundation, Unintended Consequences: Ten Years under the DMCA, retrieved on 2009-9/13: "Experience with section 1201 demonstrates that it is being used to stifle free speech and scientific research." See also Micheal Piatek, et al., Challenges and Directions for Monitoring P2P File Sharing Networks — or — Why My Printer Received a DMCA Takedown Notice: Proceedings of HotSec '08, San Jose 2008), retrieved on 2009-9-13:

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¹⁷Klaus Schwab, The Global Competitiveness Report 2009-2010 (Geneva: The World Economic Forum, 2009) at 347. (Return to text.)

¹⁸See, for example, The 45 Adopted Recommendations under the WIPO Development Agenda, as retrieved on 2009-9-13. (Return to text.)