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Copyright Reform Process


Documents received have been posted in the official language in which they were submitted. All are posted as received by the departments, however all address information has been removed.

Submission from TELUS received on September 14, 2001 via e-mail

Subject: Consultation Paper on Digital Copyright Issues (the "Consultation Paper") -TELUS Response

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TELUS Corporation welcomes the opportunity to submit these comments on the Consultation Paper on Digital Copyright Issues (the "Consultation Paper"). The task in updating copyright in the digital environment is to ensure that solutions to protect against unauthorized use strike an optimum balance among interested parties so that technological innovation and electronic commerce may flourish and not be stifled.

TELUS notes that the Consultation Paper will be just one of many parts in a long process of updating copyright law in Canada so that it can maintain the integrity and objectives of the copyright system in the digital environment, and that the outcomes of this process will feed into Canadian positions in international fora addressing these issues with a view to establishing global standards of copyright protection. TELUS will wish to participate in subsequent stages of this process.

TELUS is Canada's second largest communications and information management services company. Through our various subsidiaries, TELUS engages in almost every type of electronic information transfer available today - from basic telephone service to Internet access and wireless communications. The application of copyright law to such transfers of information is therefore of great importance to us. TELUS is interested in ensuring that Canadian and international laws on copyright strike an appropriate balance among the interests of rights holders, intermediaries and users.

We are pleased to see the efforts being made to consult broadly in order to develop forward-looking policies in this constantly evolving area. TELUS will focus its intervention at this time on two issues that will be of particularly great importance to the Corporation on a going-forward basis: (i) legal protection of technological measures to protect against the unauthorized use of copyrighted materials; and (ii) liability of network intermediaries over whose networks are carried communications that make unauthorized use of such materials.

Legal Protection of Technological Measures

Traditionally, copyright laws have been concerned with the protection of expressions. Recognizing the potential for digital technologies not only to make available new means to distribute such expressions, but also new means to circumvent measures to protect against the unauthorized use of expressions, the 1996 World Intellectual Property Organization treaties provide (in article 11 of the Copyright Treaty and article 18 of the Performance and Phonograms Treaty) for "adequate legal protection and effective legal remedies against the circumvention of effective technological measures" to protect copyrighted material.

As the Consultation Paper notes [at p. 11], these treaties aim to establish "standards of copyright protection that would maintain the integrity and objectives of the copyright system in the digital network environment." TELUS' concern is that, while laws that target technological measures can be used to protect the interests of rights holders, such measures may also go too far and introduce extraneous issues into copyright law, thus distorting the balance that the Copyright Act has traditionally sought to maintain between the interests of rights holders and the interests of users.

TELUS recognizes that electronic information, including audiovisual, literary and musical works, is susceptible to unauthorized use, including piracy. However, as the Consultation Paper notes [at p. 4]:

"Some of the challenges which have been created by technology may be adequately resolved by technology, through private arrangements with other Internet players, through educational activities in relation to copyright, or by adopting suitable business models."

Some business models are predicated on the maintenance of on-line retail prices near off-line retail levels despite the differences in the costs of distribution. Rights holders are accordingly seeking to devise and deploy technologies that will help them to protect, and maximize revenue from, copyrighted works. While it is natural that rights holders should strive for the highest prices that the market will bear, such above-cost pricing demonstrates market power and at the same time encourages the development of means to circumvent such technological measures, as well as rights management information systems, intended to protect copyrighted materials.

Further, while some technologies may be intentionally designed with the express purpose of circumventing technological copyright protection measures and rights management information systems, there are other technologies that only produce that result as a secondary effect. The solutions employed in some jurisdictions that have acceded to the WIPO treaties (e.g., the United States under the Digital Millennium Copyright Act (DMCA)) have reached beyond the traditional purposes of copyright law to prohibit even devices and methods, including software and hardware, that may have the unintended capability of circumventing copyright protection, or that may be used to produce copies for private purposes in a manner analogous to photocopying and or home-taping, or that may be employed for other "fair use" purposes, such as research and development in the fields of encryption and technological security, which may lead to the development of devices and/or methods that are able to overcome other protective technologies and methods.

TELUS seriously questions the correctness of targeting for prohibition goods, services, software, devices and methods, which may have the potential for circumvention of copyright protection, rather than targeting the conduct of persons that willfully commit copyright violations. Even a "primary function test" to determine whether a software or hardware device should be prohibited on the basis of whether it is capable of circumventing technological measures should be prohibited, would be a crude test, as it could come down to a 49 % vs. 51 % kind of distinction, with a resultant prohibition on the legitimate 49 %. An example could be a device that recognizes and works effectively with products from the same or affiliated firms, but which does not recognize and renders ineffective the technological protective measures devised by competing firms (e.g., in a manner analogous to the way Microsoft operating systems have been found to have difficulty working with the software of some competitors). Su ch cases may be more a matter for competition law authorities than a copyright matter.

Accordingly, TELUS would urge the Departments to implement the WIPO treaties in a manner that maintains the traditional balance between the legitimate needs of rights holders to protect and manage their copyrighted works and the traditional rights and privileges of users and consumers. Otherwise, the risk is that overly restrictive laws will stifle technological innovation in the hardware and software industries, as well as the development of electronic commerce.

Specifically, legal action should be directed only to individuals who intentionally circumvent technological measures. Any amendments to the Copyright Act should place responsibility for the infringing action on the perpetrator, on the person who removes or circumvents such protective measures for unauthorized purposes. This is the proper focus for any amendment to the Copyright Act to deal with the circumvention of technological measures.

Liability of Network Intermediaries

As the Consultation Paper notes [at p. 30], "the Canadian copyright sectors are seeking ways to exploit the potential of networks such as the Internet to disseminate their content." They are also seeking to minimize their risks and maximize their returns by having network intermediaries held liable for unauthorized communications and reproductions. Accordingly there are proposals to subject Internet service providers (ISPs) to tariffs providing for copyright royalties for music and other works communicated over their networks, as well as compensation for certain unauthorized activities of reproduction.

In TELUS' view, it is important that the laws of Canada and international treaties be consistent and technologically neutral. It is also important that the balance among the various interests in the context of copyright law - rights holders, intermediaries and users - continue to be reflected in updates to the law.

As TELUS stated in its submission to Industry Canada regarding the Draft Canadian Code of Practice for Consumer Protection in Electronic Commerce , unless there are problems to address that are specific to a particular medium, it is incorrect and inappropriate that the Draft Code should target a particular type of technology - "open networks" or the "Internet" - and attempt to create Internet-specific rules for transactions consummated over the Internet, rules that are different from those governing the conduct of consumers and merchants who engage in transactions offline or even over other electronic media, such as the telephone:

"The laws of Canada ... should be 'technology neutral', and should not target a particular technology, such as the Internet, any more than is necessary to address problems that are specific to that medium. This means that the Draft Code should be consistent, to the greatest extent possible, with the rules and standards established with respect to commercial transactions conducted over different technological platforms (whether over the Internet or other electronic media, such as the telephone or cable lines), as well as transactions conducted offline, in the world of mail-order catalogues and "bricks-and-mortar" shopping. The approach that should be taken in developing a code of conduct should also be proportionate to the extent and significance of the problem, and must balance consumer interests and economic interests in order to avoid stifling competition and economic growth in Canada."

The Telecommunications Act and the Copyright Act provide for symmetrical treatment of carriers with respect to the content that they carry. S. 36 of the Telecommunications Act states:

"Except where the Commission approves otherwise, a Canadian carrier shall not control the content or influence the meaning or purpose of telecommunications carried by it for the public."

Not being permitted to control or influence the content of communications, except in cases where the Commission has approved or ordered specific actions in respect of content, ensures that telecommunications carriers are not liable for the content that they transmit, except in those limited and specific circumstances. Accordingly, the Terms of Service of the telephone companies approved by the CRTC provide a standard exclusion from liability for copyright infringement arising from the transmission of copyrighted materials over their facilities.

The Copyright Act seeks, in S. 2.4(1)(b), to achieve a similar outcome by excluding from the definition of "communication to the public by telecommunication"

"a person whose only act in respect of the communication of a work or other subject-matter to the public consists of providing the means of telecommunication necessary for another person to so communicate the work or other subject-matter ..."

Internet service providers are in a situation analogous to that of telecommunications carriers. The primary function of an ISP is the provision of transmission services by means of packet switching telecommunications technologies. Ancillary functions include caching and may include web-site hosting. An ISP does not initiate the transmission of information; nor does it select the recipients of the transmission, nor does it select, control, influence or modify the information contained in the transmission, while caching is automatic and temporary and inherent in the architecture of Internet Protocol networks.

The Copyright Board recognized the symmetry between ISPs and telecommunications carriers in Tariff 22 where it held content providers rather than network intermediaries liable to pay royalties under the Copyright Act. The Board found that:

"[p]ersons who can avail themselves of paragraph 2.4(1)(b) of the Act with respect to a given communication of a work do not communicate the work. Generally speaking, this includes all entities acting as Internet intermediaries such as the ISP of the person who makes the work available, persons whose servers act as a cache or mirror, the recipient's ISP and those who operate routers used in the transmission."

Tariff 22 deals only with the right of communication to the public in the context of musical works. Consequently the Board has not yet addressed the question of network intermediary responsibility with respect to copyright in other works or with respect to reproduction rights. While the copyright sector has appealed Tariff 22 to the Federal Court, it is also pushing for ISP liability in the other areas as well. If the positions of these groups were adopted, the outcome would be a burdensome and unfair situation for Canadian ISPs that is unique to Canada and which would handicap Canadian ISPs relative to ISPs in other jurisdictions.

For greater certainty and to bring an end to litigation before the courts and quasi-judicial regulatory agencies, the Government of Canada should amend the Copyright Act to exempt network intermediaries from liability (except in instances where such intermediaries fail to block access to infringing material after having received a court order to do so). Such amendment should define the activities or functions that qualify a person for an exemption from liability (e.g., conduit, caching and hosting) rather than defining the types of persons that may qualify for an exemption, as some network intermediaries may implement business models that entail seeking to control or influence the information that they transmit or make available to subscribers.

Regarding the responsibility of network intermediaries to block access to or take down third party sites that are alleged by a complaint" to be illegal or copyright-infringing content, network intermediaries should be legally required to remove content from web sites that they host only when advised by the proper legal authorities, following proper judicial procedures, that the material contravenes Canadian laws. This policy was developed in cooperation with the Canadian Association of Internet Providers (CAIP), the Canadian Cable Television Association (CCTA) and the Canadian Recording Industry Association (CRIA), which have jointly entered into a voluntary copyright management arrangement that demonstrates that it is unnecessary to implement a "notice-and-take-down" regime like in the United States, which is complex and administratively burdensome and may encourage rights holders to harass competitors by making unfounded complaints. Under the CAIP-CCTA-CRIA arrangement, the intermediary ISP serves as a mere intermediary.

TELUS is also of the view that a "notice-notice" regime similar to the CAIP-CCTA-CRIA arrangement could be an effective model:

  1. The complainant gives notice to the ISP of an alleged infringement.
  2. The ISP gives notice of a complaint to the alleged offender ("defendant") and reminds this party of its obligations under the service agreement with the ISP, which normally includes a commitment not to engage in copyright infringement.
  3. The ISP sends a notice to the complainant confirming that the ISP has notified the defendant, while stating that the ISP itself is not liable for copyright infringement by third parties, and indicating to the extent possible whether the complaint has been received.

Assuming that the party receiving notice of the complaint does not believe that it has any legitimate copyright interests at stake, TELUS fully believes this process will successfully satisfy most complaints of infringement in a quick and cost effective manner. If the party posting the offending content does not remove it, the complainant then takes action directly through the courts. This regime does not compromise the role of the ISP by requiring it to act - in addition to its role as network intermediary - also as judge and jury (in effect having to determine the legality of the content in question and the penalty for infringement) and as executioner (enforcing a decision that should properly be made by a court).

While some may still argue that the 'notice-notice' approach does not sufficiently address infringements that are not voluntarily removed by the party receiving the complaint, it is important to understand that in situations where there is a dispute between two parties, each of which is asserting conflicting copyright interests, the resolution of such legal rights is the proper domain of the courts or tribunals - not the ISP.

While a "notice-and-take-down" regime that allows a complainant to force an ISP to tear down a third party's site on "notice alone" (and in the absence of any judicial order from a court or tribunal of competent jurisdiction) may well protect the interests of the complainant, such a model violates basic principles of natural justice and procedural fairness toward opposing parties. An ISP is not qualified to assess the validity of a claim of infringement, nor should it have to adjudicate between competing claims. It is inappropriate to require an ISP to take down content based solely on the allegations of a third party copyright holder. An ISP should only take down or block access to a web-site pursuant to a court order.

If judicial expediency is the problem, TELUS would recommend that this be a proper focus for reform, instead of enacting legislation or rules that thrust ISPs and other network intermediaries into a judicial or quasi-judicial role in the context of copyright disputes for which they are ill-qualified. It is essential that reforms be implemented in a manner that reflects the balance that has developed in the Copyright Act among the interests of rights holders, intermediaries and users.


Copyright laws that bring clarity to parties' rights and obligations in the evolving digital environment will be important instruments to encourage technological innovation and to enable electronic commerce to flourish.

At page 6 of the document entitled "Framework for Copyright Reform", the Departments state:

"Priority consideration for revisions to the Act will be guided by the following principles:
  • ensuring net gains for Canadians
  • maintaining the responsiveness of the Act to technological innovation and new business models
  • clarifying the law where it will reduce the risk of unnecessary litigation
  • ensuring a direction for reform that takes into account, and helps shape, international trends."
TELUS supports these principles and believes that the approaches that it recommends in this submission will help to realize these goals.

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