ARCHIVED — Canadian Chamber of Commerce

COPYRIGHT REFORM PROCESS

SUBMISSIONS RECEIVED REGARDING THE CONSULTATION PAPERS

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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.

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Submission from Canadian Chamber of Commerce received on September 13, 2001 via e-mail

Subject: Canadian Chamber of Commerce Submission on Consultation Paper on Digital Rights Issues

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Canadian Chamber of Commerce Submission: Consultation Paper on Digital Copyright Issues

Introduction
The Canadian Chamber of Commerce (herein "the Chamber") welcomes the opportunity to comment on the Consultation Paper on Digital Copyright Issues (herein "the Consultation Paper").

The Canadian Chamber of Commerce is Canada's largest and most representative business association. It speaks for approximately 170,000 members - which has representation from each sector of the economy and every region of the country - through its network of some 500 local chambers of commerce and boards of trade.

The Chamber believes that copyright represents a key issue for Canada with regards to cultivating an innovative society and economy. A balanced copyright regime is essential to drive the production of knowledge, the key input to the innovation process. Moreover, in an increasingly global, knowledge-based economy Canada must ensure that its intellectual property regime is modern, dynamic and fulfils international commitments. Canada must be seen as a leader in intellectual property protection, for only then will we be a leader in attracting the talent, investment and research and development opportunities that allow a nation to maximize its innovative potential. As such, the Chamber applauds the work of the Departments of Industry Canada and Canadian Heritage in relation to developing the Consultation Paper.

Canadian Chamber of Commerce Comments on the Consultation Paper
The comments herein concentrate on the four issues addressed in the Consultation Paper, specifically, whether or not:

1. the Act should be amended to allow a specific right for on-demand communication;

2. legislative measures are needed to deter the circumvention of technological measures that are used by rights holders to protect their rights;

3. legislative measures are needed to deter tampering with rights management information; and

4. legislative measures are needed to address the liability of network intermediaries in relation to copyright protected materials over digital networks.

The Chamber believes these four issues constitute the key discussion points regarding the development of digital copyright, and we are encouraged by the thorough examination presented in the Consultation Paper.

1. Right of On-Demand Communication:
In order for the Internet to develop its potential as a platform, distribution channel and tool for providing and delivering information, knowledge, products and services, safeguards must be put in place to ensure that intellectual property rights, specifically copyright, are sufficiently protected. Therefore the Chamber urges the federal government to introduce a limited and separate exclusive right of making available copyrighted works for download over the Internet. We do not believe that such a right would unduly alter the balance of interests between users and rights holders, nor between various rights holders in the online environment, if subject to particular limitations.

Existing limitations and exceptions should apply equally to the online environment, and steps should be taken to ensure that exceptions, such as fair dealing, are respected.

2. Legal Protection of Technical Measures:
The Internet holds tremendous potential as a distribution channel for both copyright holders and consumers. Copyright holders can profit from being able to access a global audience/market, whereas consumers can benefit from increased choice, variety and competition. Providing legal protection for the development and effective deployment of technological measures to protect copyrighted works is a necessary step to maximize this potential.

It should be noted that the federal government has acknowledged the importance of technological measures in relation to the development of electronic commerce in Canada's Cryptography Policy, released in 1998. The policy allows citizens and businesses to import and use any level of encryption as they deem necessary, and users are free to determine what kinds of authentication and encryption products and services they need. While not developed in the context of copyright protection per se, this enlightened policy framework provides the private sector with the regulatory scope to develop the requisite technological measures.

With respect to copyright protection, the Canadian Chamber supports the use of technological protection measures, backed by legal safeguards to protect such measures from unlawful circumvention. The Canadian Chamber therefore supports an amendment to the Copyright Act that provides rights holders with protection against the circumvention of technological measures.

Such an amendment should create both civil and criminal offences for circumventing copyright protection technology. Offences should be directed to individuals who intentionally circumvent technological measures. It is the perpetrator(s) of an infringing action who must be held accountable, and the legislation should therefore place responsibility for the infringing action on the perpetrator who removes or circumvents such protective measures for unauthorized purposes.

Such an amendment should also create both criminal and civil offences for individuals and companies that manufacture, import, sell or market products and services that have the 'wilful and overwhelmingly purpose' of technological circumvention. The Chamber does not feel that the "Primary Purpose Test" (as used in the US & EU) is sufficient and that there is the need to develop a more strict test. The Chamber proffers that the element of intent should be added to any amendment prohibiting the manufacture, import, sale or marketing of products and services that circumvent technological measures.

The Chamber also believes that existing Copyright Act exemptions, such as the fair dealing exemption, should still apply. Moreover, an amendment in this area should not constrain research and development in the fields of encryption and technological security, even if devices/methods designed to overcome the said protection are developed during the course of such research. The amendment must focus on preventing circumvention for the purposes of copyright infringement. If the scope of the amendment grows any larger than this it risks inhibiting innovative research and development. Therefore, the manufacturing, importing, purchasing, or use of circumvention devices with rights for legitimate purposes, such as during research and development, ethical hacking or in the attempt to eliminate product weaknesses, should not be prohibited.

Due to the rapid pace of technological change, some parties have expressed concern regarding the implementation of such an amendment to the Copyright Act. The crux of such concerns relates to the instrument (the amendment) not achieving the goal (providing a sufficient framework for digital copyright protection). This is a valid concern, as today's technological climate is dynamic and continuously evolving, and thus, a few years from now the digital copyright landscape may be very different. While this is a valid concern, there is the need to develop a balanced digital copyright regime now. Therefore, the federal government may wish to consider integrating a 3 or 5 year review process into the amendment. This would allay such concerns, as well as constitute prudent policy-making in light of the dynamic environment.

With respect to the issue of privacy, the Chamber believes that the federal privacy legislation, and upcoming provincial statues, will sufficiently deal with potential abuses of personal information and privacy in the context of copyright. The federal legislation, the Personal Information Protection and Electronic Documents Act, has a primacy clause (4.3) that would extend to any amendment of the Copyright Act. While there is little doubt that the collection of consumer data that profiles the purchasing habits related to digital copyrighted products will have commercial value, there is no reason why copyrighted products should be treated any differently than any other digital product. Hence, such infringements should be subject to existing/relevant privacy legislation.

3. Legal Protection of Rights Management Information:
The most effective protection of digitally delivered intellectual property will rely on the use of technological protection measures and rights management information, backed by legal safeguards to protect such measures and information from unlawful circumvention. The Chamber, therefore, fully supports an amendment to the Copyright Act that provides rights holders with protection against the circumvention of technological measures and rights management information used to secure and identify their works. Ensuring that there is adequate protection under the law to prevent circumvention of such measures will benefit both users and copyright owners.

In turn, similar to the discussion above regarding technological measures, the Chamber supports an amendment to the Copyright Act to create civil and criminal offences for tampering with copyright management information. Stating this, however, it is important to stress that even though the issues of technological measures and rights management are intrinsically connected, as one must circumvent a technological measure to alter the rights management information, they should be treated as distinct offences. There is the possibility to alter rights management information prior to integrating it with technological measures.

With respect to the issue of privacy, the Chamber would like to reiterate its position in that the federal privacy legislation, and upcoming provincial statues, will sufficiently deal with potential abuses of personal information and privacy in the context of copyright. The federal legislation, the Personal Information Protection and Electronic Documents Act, has a primacy clause (4.3) that would extend to any amendment of the Copyright Act.

4. Liability of Network Intermediaries (ISPs) in Relation to Copyright
The Chamber agrees with the assertion expressed in the Consultation Paper that, "The growth of a Canadian presence in the digitally networked environment will be aided by a viable and competitive Canadian ISP sector." In order for a robust and competitive ISP sector to flourish, there is the need to establish clear, transparent and fair rules to guide the sector. Currently, the Copyright Act is ambiguous on the issue of ISP liability, which results in a lack of clarity and predictability.

Notwithstanding the Tariff 22 decision, which is currently under review, uncertainty exists with regards to the extent of ISP liability for copyright infringement by third parties. Therefore, the Chamber urges the federal government to codify, in the Copyright Act, the principles articulated in the Tariff 22 decision of the Copyright Board.

The Consultation Paper proposes a "Notice and Take-Down" regime designed to limit ISP liability, while at the same time allowing for copyright holders to protect their works. The Chamber has concerns regarding the implementation of a 'Notice and Take-Down' regime. While such a regime protects the alleged interests of certain copyright holders, it places an undue level of responsibility, and potential liability, on ISPs.

The first problem with such a regime is the concept of 'notice'. What constitutes proper notice? Notice by whom? Notice in what form? The only type of 'notice' that could satisfy the liability requirements of an ISP is a court order. Without a court order the ISP exposes itself to potential liability stemming from 'taking-down' a legitimate web site. This does not appear to be a fair position in which to place an ISP. An ISP should not have to and cannot assess the validity of any claim of infringement, nor should it have to act as the judge between competing claims. In turn, if Canada wishes to go forward with a Notice and Take-Down regime, notice should come in form of a legal document, such as a court order.

Some copyright holders may argue that this would place their rights at a disadvantage, as it may take too long to receive the proper legal documents and by that time the economic damage may be done. While in some circumstances this may be true, the Chamber feels that such an argument should not be taken so far as to mean that Canada should adopt legislation that abandons the principles of due process by requiring Canadian ISPs to make quasi-judicial decisions to resolve what may involve, in many circumstances, legitimate copyright disputes between opposing parties. The Chamber proffers that this is or should be the proper role of the courts or specialized tribunals such as the Copyright Board.

Another possible alternative to this situation is implementing a 'Notice & Notice' regime. This approach is a three-step process with no actual takedown by the ISP, except in accordance with a court order. The service provider is basically fulfilling the function of a delivery service guaranteeing the Complainant that the third party receives the copyright infringement complaint. If infringing content is not voluntarily removed, Complainants are free to take whatever appropriate legal action deemed necessary. In this way, the service provider is not required to make judgement calls as to the validity of the claim.

The process could work as follows. After the Complainant completes its own investigation and determines in its own mind that an alleged infringement has occurred, the Complainant locates the service provider that is hosting the third party. Once the identity of the hosting party is identified, the following three steps should be followed:

Step 1: the Complainant forwards a complaint to the service provider regarding the alleged infringing material and its location.

Step 2: the ISP then takes steps to notify the third party. For example, the ISP could forward a 'notice' to the third party, which could include details of the complaint, reminds the third party of their service agreement with the ISP (which presumably states that clients should not engage in copyright infringement), as well as their 'Acceptable Use Policy', and provides a link to these documents and encourages the third party to contact the Complainant directly.

Step 3: The ISP then forwards a reply to the Complainant confirming that the ISP is not liable for copyright infringement by third parties, confirming that the ISP took reasonable steps to notify the third party in question, and indicating whether the ISP can confirm that the complaint was received.

Assuming that the party receiving the notice of complaint does not believe that it has any legitimate copyright interests at stake, the Chamber fully believes this process will successfully satisfy most complaints of infringement in a quick and cost effective manner.

While some may continue to argue that the 'Notice & Notice' approach does not sufficiently address infringements that are not voluntarily removed by third parties, it is important to understand that in situations where there is a dispute between two parties, each of whom is asserting conflicting copyright interests, the resolution of such legal rights is the proper domain of the courts or specialized tribunals, such as the Copyright Board - not the ISP.


Conclusion
Copyright is a key element in driving knowledge creation and innovation, both of which are key elements to economic growth. Canada already possesses a relatively modern copyright regime and enjoys high compliance levels. Any amendments to this regime must strike a balance between users and copyright holders and create certainty for the Canadian ISP industry. The Chamber believes the Consultation Paper identifies the correct set of issues that need to be discussed with respect to 'digital copyright', and we look forward to participating in ongoing consultations as the amendment process moves forward.

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