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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 RightsMarket received on September 12, 2001 via e-mail

Subject: Comments - Government of Canada Copyright Reform

PDF Version

Comments - from RightsMarket Inc.

Lindsay Moir, Founder, RightsMarket Inc.


RightsMarket keeps your intellectual property working for you no matter where it goes.




Table of Contents

RightsMarket's Recommendations on Copyright 4
1.0 Introduction 4
1.1 Digital Content Types 4
1.2 The Solution 5
1.3 How It Would Work 5
1.3.1 Tariff on Internet Service Providers (ISPs) 6
1.3.2 Rights Clearing House (RCH) 7
1.3.3 Blanket License 8
1.3.4 Has This Worked In The Past? 8
2.0 Objectives of Consultation Paper 9
RightsMarket's Opinions on the Consultation Paper on Copyright Issues 10
1.0 Introduction 10
3.0 Promoting The Dissemination of New Digital Content For and By Canadians – Core Principles 13
4.1 Making Available 14
4.2 Legal Protection of Technological Measures 15
4.3 Legal Protection of Rights Management Information 16
4.4 Liability of Network Intermediaries, such as Internet Service Providers, in Relation to Copyright 17
RightsMarket's Opinions on the Consultation Paper on the Application of the Copyright Act's Compulsory Retransmission License to the Internet 18
1.0 Introduction 18
2.0 BDUs 18
3.0 Rights Holders 18
4.0 Regulators 19
5.0 Recommendations 19
6.0 General Comments 19



Our response is organized as follows:

1. RightsMarket's Recommendations on Copyright - This is a high level view of what we think needs to be done in order to address the digital dilemma. How do you make money from digital bits if you can't control distribution? If the economic fuel can not be applied thru control of distribution, then it must be applied at a different point. We are proposing that digital economics be based on use not distribution (e.g. the Superdistribution model). This part goes beyond the scope of this consultation paper. In the last part of this section we reference the overall "Objectives of the Consultation Paper" (http://strategis.ic.gc.ca/SSG/rp01101e.html ) and explain why we believe this approach meets those objectives.
2. RightsMarket's Opinions on the Consultation Paper on Copyright Issues (http://strategis.ic.gc.ca/SSG/rp01099e.html) - This copies questions from the department and gives our opinion directly below that question.
3. RightsMarket's Opinions on the Consultation Paper on the Application of the Copyright Act's Compulsory Retransmission License to the Internet (http://strategis.ic.gc.ca/SSG/rp00008e.html) - This part states what we believe are the issues, addresses them, and gives general recommendations.


RightsMarket's Recommendations on Copyright

1.0 Introduction

This discussion paper is primarily concerned with the digital environment (e.g. Internet). Its comments should be considered in that context.

RightsMarket Inc. (CDNX-RTS) incorporated in 1993 in Calgary, Alberta, Canada. Its mission is to keep intellectual property working for rights holders no matter where it goes. RightsMarket was the first Canadian company and one of the early entrants to the Digital Rights Management (DRM) market.

Copyright law needs to consider the economic and social peculiarities of the Internet. Each Digital Content type requires different technological, legal, and regulatory solutions. A taxonomy of Digital Content types is in order here.

1.1 Digital Content Types

Type 1 is consumer content. This is content that even one instance of the content being cracked (anywhere in the world at any time, resulting in global redistribution) potentially destroys a large part of the value of the content. The loss of one sale is not the issue. The subsequent redistribution of the digital file thru email, P2P, FTP, etc. causes significant economic loss. Examples would be popular music, best selling novels, movies, many types of software (e.g. PKZIP), photographs, etc. This is a large percentage of the current content industry and is causing the greatest challenges for rights holders and regulators. Based on our experience, the experience of others, and extensive scientific and academic study, Type 1 content only becomes economic thru Superdistribution (described below).

Type 2 content derives a large part of its value from ease of access. A good example would be reference materials, such as medical journals or the services that Lexis-Nexis provides. You have the ability to get what you want, when you want it with sophisticated search capabilities. There is little or no problem with redistribution in this case. Even if the digital content is redistributed, there is little economic loss to the rights holder. Type 2 content is a good candidate for password protected websites.

Type 3 content is reference oriented, very valuable and a relatively small audience is interested in it. A good example would be an investment newsletter aimed at mutual fund managers. This information can be extremely valuable and if it was distributed in the clear, the chances of it being redistributed and destroying it value are very high. Type 3 content is a good candidate for persistent encryption. It is unlikely that (for example) professional mutual fund managers would hack the content and if they did inadvertently send the content to somebody else, the receiver (unlikely to be a hacker) would have to agree to the terms and conditions of use and pay for the content in order to access it.

Type 4 content (information, education, etc.) has traditionally been advertising and subscription supported (trade journals in the print world and their analog web sites in the digital world). In the physical world the publisher has the revenue stream of paid subscriptions (e.g. course fees) as well as advertising income. In the digital world, it has been very difficult to get people to pay for subscriptions. As a result, many of these digital offerings are going out of business. It is also difficult to get people to pay for quality educational material. Type 4 content works well with Superdistribution (described below).

Type 5 content is sensitive information that is destined for only a few individuals. Examples would be health records, legal correspondence, mergers and acquisitions documents, etc. If it is secret then encryption is a good solution. Type 5 content is a good fit for DRM enforcement technologies.

1.2 The Solution

This problem and the solution has been studied extensively by academia and peer reviewed. It is called Superdistribution as described by Dr. Brad Cox, Author, Addison-Wesley Pub Co; ISBN: 0201502089 Superdistribution: Objects as property on the electronic frontier. Instead of trying to bottle up bits, you assume that they will be redistributed (superdistributed). The trick is to meter the use of the bits and with that information pay rights holders.

The term Superdistribution has been somewhat abused. To clarify the situation, if the DRM requires that users must agree to the terms and conditions of use before they get access to the digital content the technology does not do Superdistribution.

Superdistribution assumes no pre conditions (no encryption for example) to the distribution of digital content, except that there is some way of metering the use of the digital content. Superdistribution is metering, analogous to the metering that is done by the electric utility. It is simple, works, scales, and deals very elegantly with the challenges of Type 1 and Type 4 content.

1.3 How It Would Work

While Dr. Cox lays out the problem and the solution well in his book, there are some nuances that apply to the current Internet and Canadian situation. We are proposing the following.

1.3.1 Tariff on Internet Service Providers (ISPs)

There have been several requests by collectives to issue a tariff on ISPs.

The departments note that tariff proposals in relation to reproduction have been filed with the Copyright Board by the Société du droit de reproduction des auteurs, compositeurs et éditeurs au Canada (SODRAC) Inc. The tariff proposals (http://www.cb-cda.gc.ca/proposed- e.html) are based on "network exploitation" of reproductions of the recorded music in the SODRAC repertoire.

On October 27, 1999, the Copyright Board released its decision that it would proceed with the certification of proposed Tariff 22 (the so-called Internet tariff). In 1995, the Society of Composers, Authors and Music Publishers of Canada (SOCAN) had filed a proposed tariff (Tariff 22) whereby ISPs were asked to pay royalties for the communication of the musical works in SOCAN's repertoire over digital networks such as the Internet. In its decision of October, 1999, the Board asserted its jurisdiction to certify such a tariff. The decision is currently review by the Federal Court of Appeal.

ISPs are the one place that is currently regulated by Canadian law, have a large capital investment, and have a physical connection to every one of their customers. No payment, no access to the Internet for an individual user. The argument could be made that putting a tariff on ISPs in Canada would make them less competitive. ISP's subscriber base is driven by the free content that is available on the Internet. The ISPs have been the general beneficiary of the current situation which is very unfair to rights holders. Rights holders are not getting paid, ISPs are. This needs to be redressed.

ISPs would not be required to levy this Tariff on non Canadian residents. Canada currently has levies on blank cassette tapes and blank CDs in order to pay rights holders for the loss of revenue that occurs from works being copied onto those media. Not all nations in the world do this (Germany and France do). The argument that Canada can only levy charges against ISPs that are the same or similar as other jurisdictions seems arbitrary and counter to what Canadians have done in the past dealing with similar issues.

Dr. Cox suggest metering all uses and creating a bill from the uses. Consumers do not like the metered experience. They prefer subscriptions. Whether you watch a lot of TV or a little your cable bill is still $49.95 per month. We are suggesting a flat Tariff that is closer to the subscription model. This could be adjusted as time goes on and we get more experience with actual usage and real value that Canadians are receiving.


1.3.2 Rights Clearing House (RCH)

RightsMarket in conjunction with SOCAN and Digital Content Management Services (DCMS) have bid on the Electronic Copyright Fund (ECF). This is administered by the Department of Canadian Heritage through the Secretariat of the Canadian Digital Cultural Content Initiative (CDCCI). The ECF component provides funding to improve copyright management in the digital environment for Canadian copyright holders. The RCH in concert with the Canadian Collectives will administer the clearing of licenses on-line.

The RCH will not have any revenue distribution mechanisms directly to rights holders. One cheque will be cut to each of the collectives, along with reports/digital files. The collectives will do revenue distributions to their members. This greatly simplifies the operation of the RCH and allows Canadians to leverage the investments and relationships that the collectives already have with rights holders.

The RCH could also be used to do the following. In the current response to the CDCCI, this is not proposed.

1. Provide a web interface where rights holders opt in or out of providing Blanket Licenses (described below) for specific content. This is similar to the present situation with SOCAN. Rightsholders can decide to opt in and use SOCAN or they can "go their own way". If the rights holder opts in then they are entitled to their pro rata share of the ISP Tariff. Their alternative is to go with the current situation. This is untenable for Type 1 and 4 content.
2. Distribute requested digital content. This could be the first 4 Types. However, in the case of Type 1 content, statistics pertaining to downloads would be helpful. These would be inputs to the RCH and help determine which rights holders get what percentage of the ISP Tariff.
3. Provide usage meters to Internet users that want them. While we will be able to generate useful statistics that indicate how we should split up the ISP Tariff from downloads and licensing activity, the fact is a lot of the use will be the result of redistribution. Users, generally speaking, want their content providers to be paid. If they are willing to install a meter, we can guarantee that their usage statistics will drive revenue towards their content providers. We expect that content owners will be aggressive about promoting this. This will be especially helpful to Type 1 and 4 rights holders.
4. Authentication of content. In the Superdistribution world (the one we really live in), it is difficult to know if the content you have received is really the official version that the rights holder created and stakes its reputation on. RCH would provide the necessary technology and processes to do this.
5. Provide statistics on use to content providers. These statistics will only be sufficient for revenue reconciliation.

Again, no revenue distributions will be made by the RCH to rights holders. All funds will be funneled to the existing collectives, who in turn will do revenue distributions.

1.3.3 Blanket License

A Blanket License includes all necessary underlying rights. Creating a package of rights that is easily consumable will help the economics of digital content on the Internet.

A Blanket License means you have accepted that uses will occur. If you can aggregate the uses sufficiently then you have economic reason to sit down with rights holders (in this case, it will be their representatives, which are the collectives) and negotiate the fees that need to be paid. It is uneconomic for every user who wants a single music track (for example) to negotiate for each one of the rights to use it.

However it is economic for an RCH to work with the collectives to split up the ISP Tariff. The Collectives represent the interests of the rights holders. They have the revenue distribution mechanisms. They have also dealt with this type of situation before (e.g. radio play) and the Canadian Private Copying Collective (CPCC).

If there are uses that a user undertakes that a rights holder has not provided to the RCH thru the Collectives, then that rights holder has the right to go after the user according to the existing law. This still allows rights holders to pursue other avenues that they believe are more economic.

1.3.4 Has This Worked In The Past?

The cassette tape and CD levies are examples of this type of system. They use radio play logs. They have worked better than any other alternative. The difference in cyber space is that the sampling mechanism that we are using for payment of Internet digital goods has no analog in the physical world. There is no radio log for the use of digital content (however that is what we are proposing). The breadth of content available on the Internet is just too large. You need a more sophisticated system (content authentication, content breadth, determination of Canadian Content, etc.).

2.0 Objectives of Consultation Paper

In summary, the objectives to be met through the reform process are:

· Create opportunities for Canadians in the new economy;

Creating a Blanket License as described above, the Rights Clearing House, and the Tariff on ISPs would put Canada in the position of exporting the technology and know how to solve the digital dilemma (cheaper to distribute digitally, but how do you make money).

· Stimulate the production of cultural content and diversity of choices for Canadians;

An economic model (Superdistribution) that pays rights holders is what is required. This will increase the amount of Canadian cultural content and offer more selection to Canadians.

· Encourage a strong Canadian presence on the Internet; and,

In the late 1800s, the USA Government asked Bell Telephone(now the Baby Bells and AT+T) to solve the network challenges of the day. There were a variety of competing service providers and they were all short term rewarded to have their networks not inter operate (sounds like the music and technology industries). Bell created the USA telephone network and subsequently exported that expertise. In fact Bell was the major shareholder in most of the Public Telephone and Telegraphs (PTTs) in the world. If Canada has the foresight to implement Superdistribution then that technology and expertise can be exported world wide.

· Enrich learning opportunities for Canadians.

If there is an economic incentive to provide Type 4 content (trade, educational, etc.), then Canadians will have greater learning opportunities. The major source of wealth of a nation in the 21st Century is the education, skill, and knowledge of its population. Superdistribution will increase this for Canadians.


RightsMarket's Opinions on the Consultation Paper on Copyright Issues

1.0 Introduction

The following are our specific comments on this Consultation Paper, organized according to the headings from the Consultation Paper on Digital Copyright Issues.

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

There are two types of technological approaches. The first is prevention or locking up the digital content (encryption). The second is identification (e.g. watermarking).

There have been several hundred million dollars expended on technology that would help create business models for rights holders in the digital era based on encryption (locking up) . Examples include InterTrust (www.intertrust.com, $750 million raised), ContentGuard (www.contentguard.com, $100 million raised), IBM (www.ibm.com, $100 million invested).

As Bruce Schneier (Chief Technical Officer, Counterpane Internet Security, Inc.) states "Attackers don't follow rules; they cheat. They can attack a system using techniques the designers never thought of. Art thieves have burgled homes by cutting through the walls with a chain saw. Home security systems, no matter how expensive and sophisticated, won't stand a chance against this attack. Computer thieves come through the walls too. They steal technical data, bribe insiders, modify software, and collude. They take advantage of technologies newer than the system, and even invent new mathematics to attack the system with."

For background on Bruce Schneier go to the "Hearing on Internet Security before the USA Subcommittee on Science, Technology, and Space of the Committee on Commerce, Science and Transportation", http://www.counterpane.com/commerce-testimony.html.

Popular music is probably the best example where technology is failing. Even if you used the strongest encryption possible, music is still played on the radio. Simply record your favorite song off the radio, use the analog outputs/inputs to your sound card, digitize it, and then log onto one of the file sharing networks (e.g. Napster, BearShare, Aimster, etc.). Instantly that song is now available to millions of users and you have made obsolete all of the technology that was supposed to protect the interests of the rights holder. The attacker in this case did not play by the rules. He did not try to break the encryption. He simply used his radio, analog input/output, Peer to Peer, and digitization software. None of this hardware and software is illegal anywhere in the world.

There is hope for watermarking and systems that name/ identify or meter the use of digital content. This is primarily because these systems do not get in the way of the user experience, they are very technologically neutral, and they are not as prone to being defeated as are the lock up (encryption measures).

Legislation needs to be put in place to keep Canada consistent with WIPO. However, we do not believe that prevention/encryption technologies will greatly enhance the ability of this marketplace to thrive in Canada for consumer (music, movies, best selling books) or trade content (education and specialized web sites). However, encouraging standards for the naming, identification, and authentication of digital content would be very helpful.

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

Unless the rights holders are getting paid, they will continually request/threaten legal action that ISPs intervene on their behalf. The creation of the Blanket License (bundle of necessary rights), the operation of the Rights Clearing House, and the ISP Tariff would greatly help network intermediaries. It would keep them onside with the rights holders.

· The Copyright Act has evolved over time to reflect a balance between the various categories of rights holders, intermediaries and users:

- What are the appropriate balances in the digitally networked environment?

- Does the environment created by the new ICTs upset these balances?
- If so, does it do so in such a way as to impede the legitimate dissemination of content on-line?
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- If so, what intervention, if any, is required to restore the balances?

· Do the challenges to copyright truly represent challenges to core copyright principles or are they primarily challenges to existing business and distribution models?

Copyright Law envisions a world where distribution can be controlled. Distribution can not be controlled on the Internet. This inability to control distribution of their works makes it difficult if not impossible for rights holders to make money on digital distribution channels.. Recognition needs to be given to the ease with which digital content is changed and redistributed without rights holders express permission.

As mentioned previously, there has been several hundred million dollars invested in DRM technologies to control distribution. There are 10s of millions of dollars being expended on lawyers for the prosecution of companies that have technology that make it easy to share digital files (e.g. Napster). Users and intermediaries are constantly facing legal action for transmitting digital content or possessing digital content. Legislators are under intense pressure to create more laws and larger punishments for organizations and people that are taking advantage of the natural ability of digital bits to be redistributed.

We believe that the fundamental nature of digital content can not be legislated away. The digital dilemma will still remain. How do you make money from digital bits if you can't control distribution? If the economic fuel can not be applied thru control of distribution, then it must be applied at a different point. We are proposing that digital economics be based on use not distribution (e.g. the Superdistribution model).

To restore the balance, the department must look at use as the value point and not distribution. It is easy for computers to count uses. It is very difficult for computer hardware and software to control the distribution of digital content.

The creation of Blanket Licenses, the ISP Tariff, and the RCH creates a new equilibrium that fosters the creation of content and increases the selection and quality of content for consumers for Type 1 and 4 content.

· Given that legislative intervention could potentially impede the emergence of new models of content creation and dissemination, and given the unpredictable manner and rate at which technology is evolving, when is legislative intervention an appropriate response?

We believe that ease of consumption and economics are the areas where the department should concentrate. These two areas are relatively impervious to technological changes and provide the most benefit to rights holders and the general public.

In light of the foregoing questions, do the approaches suggested in this paper contribute to a copyright framework which promotes Canadian public policy objectives?

We would like to see Copyright Board supporting applications similar to the SODRAC application.

The departments note that tariff proposals in relation to reproduction have been filed with the Copyright Board by the Société du droit de reproduction des auteurs, compositeurs et éditeurs au Canada (SODRAC) Inc. The tariff proposals (http://www.cb-cda.gc.ca/proposed-e.html) are based on "network exploitation" of reproductions of the recorded music in the SODRAC repertoire.

These types of applications ease consumption issues by consumers and address fundamental economics for rights holders.

"In its final report of December 1997, (Towards a Learning Nation: The Digital Contribution -Recommendations Proposed by the Federal Task Force on Digitization, http://www.nlc-bnc.ca/8/3/r3-407-e.html), the Task Force recommended that the federal government adopt a policy and guidelines that would envisage a "single window" approach for streamlining rights licensing. The recommendations were all premised on the principle that the government act in a model fashion."

This is an absolute requirement for digital content commerce. The creation of a Blanket License that puts all of the rights together in a simple consumable package would help greatly to solve this problem.

3.0 Promoting The Dissemination of New Digital Content For and By Canadians - Core Principles

· The framework rules must promote Canadian values.
The government is committed to establishing a framework that will facilitate the use of the digital environment for Canadians to communicate with each other and with the world. In so doing, the values that define our society should continue to be upheld.

There are three major impediments to the use and exploitation of the digital environment for Canadians. The first is the difficulty of getting correctly licensed copies of digital content. The second is a lack of an economic framework that pays rights holders for the use of their digital content. The third is a lack of centralized administration of Intellectual Property. We have Land Registries, Motor Vehicle Registries, and Election Registries. These are examples of major assets being managed (land, vehicles, and people). As more and more of our wealth is put into digital Intellectual Property, how can we manage it effectively, unless we have a Registry? If the goal is to promote Canadian Values, then having a Registry seems paramount.

· The framework rules should be clear and allow easy, transparent access and use.

The need to respond to ever-changing technologies over the last century has added to the detail and complexity of copyright regimes around the world, including Canada's Copyright Act. Nonetheless, stakeholders have informed us that a source of some infringement lies in misunderstandings or differences in opinion about the scope of certain rights and exceptions. By the same token, rules that are unclear may have a chilling effect on legitimate uses of works that are nonetheless permitted under copyright law. Our objective is to dispel confusion for all Canadians about the boundaries of legitimate uses of works on-line.

Creating a Blanket License would help achieve this objective.

· The proposals should promote a vibrant and competitive electronic commerce in Canada.

Copyright changes in other jurisdictions have not fared well. For example, the DMCA in the USA has not produced a more vibrant and competitive eCommerce marketplace for digital content in the USA. It has created a lot of legal work. Currently USA businesses are afraid to deal with digital content for fear of being sued and rights holders are concerned about distributing their digital content because there does not appear to be any way to make money from the effort. On the contrary, it seems likely that digital distribution will destroy rights holders current revenue channels. Rights need to be packaged for easy consumption by the public (Blanket License), a registry established (e.g. Rights Clearing House), and an economic framework put in place (ISP Tariff).

· The framework needs to be cast in a global context.

The nation that produces a favorable economic environment for the creation of intellectual property will do very well in the 21st Century. Canada can be consistent with the WIPO treaty. Some of the other provisions of WIPO (protection of technological measures), should be implemented very carefully, if at all.

· The framework should be technologically neutral, to the extent possible.

Blanket License is a technologically neutral consideration. It creates a bundle of rights that users are willing to consume in an Internet environment. The ISP Tariff has no technology implications for the Copyright Act.

4.1 Making Available


1. How would a "making available" right affect the balances among the various copyright interests?
2. In which respects might such a right require limitations or be subject to exceptions?
3. In which respects do existing rights, e.g., the reproduction right, fail to provide a
measure of control which is comparable to a distinct "making available" right?

We do feel that a rights holder should have the opportunity to exploit their work. The making available right would help them do this. Having said that, these questions are important when relatively large dollar negotiations are conducted between creators and publishers in more traditional physical channels. This is because there is enough money and control of the distribution channel to justify the time and effort invested on this right.

However, that is not the case on the Internet. The creator is not at the table, nor is his publisher. The digital files have been redistributed and there is little or no opportunity for any rights holder to benefit from the work.

The "making available" right would be largely irrelevant in the digital environment. It would only make the business model for digital products more difficult. You would now have one more right to include in your bundle of rights that you need in order to profit from a work.

Keeping works out of the digital realm is hard and once they are there it is impossible to control them. Technology has made the "making available" right a moot point on the Internet. If the digital content is of sufficient interest, it will become available whether or not there is a "making available" right in the Copyright Act.

4.2 Legal Protection of Technological Measures


1. Given the rapid evolution of technology and the limited information currently available regarding the impact of technological measures on control over and access to copyright protected material, what factors suggest legislative intervention at this time?

While Canada needs to be on board with WIPO, we believe that legislation to make it illegal to circumvent technological measures will have only a minor beneficial effect on Canadian rightsholders. We would not recommend legislative measures at this time.

In order for control and access technologies to be successful, they would have to be 100% pervasive and effective. There are large impediments to this being the case. There are a wide variety of computing devices available today. The technology would have to interoperate on hundreds of different computing platforms. All distribution would have to be digital and copyright intelligent. You could not allow any analog distribution. That seems very unlikely given the large installed base of analog devices (radios, books, newspapers) and non license respecting digital devices such as CD players.

We do not think that technological measures that control access to copyright material will be effective on a large scale for at least 20 years. Most if not all markers point to no legislative intervention on this issue at this time.

We do not recommend to the departments that they suggest amendments to the legislations to protect technologies that enforce control and access to the digital content. We believe current legislation provides all of the protection that rightsholders require.

2. Technological devices can be used for both copyrighted and non-copyrighted material.
Given this, what factors should be considered determinative in deciding whether
circumvention and/or related activities (such as the manufacture or distribution of
circumvention devices) ought to be dealt with in the context of the Copyright Act, as
opposed to other legislation?

3. If the government were to adopt provisions relating to technological measures, in which respects should such provisions be subject to exceptions or other limitations?

Intent is paramount. For example, if you intend on transferring an eBook from your old PDA to your new PDA. You are prevented from doing so, because, unfortunately, your license is for the old PDA. You decide to use technology that would allow you to use your eBook on the new PDA. This circumvents the technological protection that the rightsholder put in place. You should not be subject to prosecution. However, if you are circumventing the technology for commercial gain, to harm the rights holder etc. then those activities should be forbidden.

As the New York Times reported in their article of July 30, 2001 titled "Jail Time in the Digital Age", http://www.nytimes.com/2001/07/30/opinion/30LESS.html, "Dmitri Sklyarov is a Russian programmer who, until recently, lived and worked in Moscow. He wrote a program that was legal in Russia, and in most of the world, a program his employer, ElcomSoft, then sold on the Internet. Adobe Corporation bought a copy and complained to the Federal Bureau of Investigation that the program violated American law and that, by the way, Mr. Sklyarov was about to give a lecture in Las Vegas describing the weaknesses in Adobe's electronic book software. Two weeks ago, the F.B.I. arrested Mr. Sklyarov. He still sits in a Las Vegas jail."

It is going to be very difficult for law makers to make this work. There are already many provisions in copyright, civil and criminal law that rights holders can use if they are being harmed.

4. Are there non-copyright issues, e.g. privacy, that need to be taken into account when
addressing technological measures

Advances in cryptography, mathematics, security can all be impaired by an improperly drafted law. The intent of the individual or organization is the issue. Amendments, if any should only consider intent not eventual results. This also applies to privacy. If the intent of the holder of that information was consistent with the agreement with the provider of that information (consumer) then there should be no legal issues given due care and consideration.

4.3 Legal Protection of Rights Management Information


1. What information should be protected under the Copyright Act? Given that information may cease to be accurate over time, should information relating to, for example, the owner of copyright and terms and conditions of use be protected?

It is important to protect rights management information. The proposed Option B is the better option.

3. Given the fact that some technologies serve a dual purpose, i.e., reflect rights
management information and protect a work against infringement, how should provisions
concerning rights management information take into account provisions regarding
technological measures?

We believe that these are two separate issues. Rights management information is important. Technological measures that enforce the terms and conditions of use are not very useful today (except for Type 3 content). We suggest that Copyright Board concentrate on rights management information protection.

4.4 Liability of Network Intermediaries, such as Internet Service Providers, in Relation to Copyright


The notice and take down provisions of the DCMA are appropriate models for Canada to follow, with one amendment. There are many instances in the USA where rights holders, with very little research, are sending out notice and take down letters. This has the unfortunate effect of harming companies/people in ways that were unintended.

The letter increases the liability of the ISP, but there is no attendant increase in the duty of the rights holder. We think it would be fairer if there was an intermediate step. For example, the ISP could receive the notice and take down letter and provide back the name and contact information to the rights holder of the alleged infringer. If there is no resolution within 60 days, then a second letter can be sent to the ISP requiring take down.

Another possibility is that with the notice and take down letter, the rights holder should a) state the information that the department has indicated in this consultation paper and b) provide the correspondence or other documentation that proves they have tried to work things out with the alleged infringer.

Finally, the ISP could charge a reasonable amount for the action of take down. While this may seem odd, the fact is that if the amount of infringement is so small, that it amounts to the economic value of fair use, then why should the ISPs have to shoulder these costs? This will make rights holders more diligent about getting redress directly from the infringer.

These alternatives should make the rights holder invest the time to come to terms with most alleged infringers instead of continually putting the ISP in the middle.

RightsMarket's Opinions on the Consultation Paper on the Application of the Copyright Act's Compulsory Retransmission License to the Internet

1.0 Introduction

There are three concerns here. The first is that existing BDUs do not want additional competitors, especially if the new competitors have any type of perceived or real advantage over them. The second is that rights holders do not want their digital content digitized and then redistributed globally, resulting in substantial harm. Regulators do not want to make a bad law now when things are changing so rapidly.

2.0 BDUs

If the tariff were identical, then the BDUs have little ground to stand on. If the Internet is really a better way of doing things, then the BDUs themselves will use it. If it is not a better way, then the BDUs have nothing to fear from Internet competition.

There may be an issue of readiness. Regardless of how much time you give the BDUs to get ready, they won't until they know the answer to the first question. Is the Internet really a better way of delivering TV and/or Radio? On that basis alone, it would be worth offering yearly renewable Internet licenses to somebody like JumpTV. That way you could at least find out.

3.0 Rights Holders

Rights holders are absolutely correct in being concerned about the digitization of their assets. The history of piracy and redistribution of digital content is instructive. The Software Games industry is a good example.

Software locking schemes were quite prevalent when games would fit on a floppy. These introduced large support costs for the supplier of the games but were seen as a necessary evil. When games went on to CDs and CD Writers were not available, the need for software protection schemes all but evaporated. It was just too difficult to copy the game, so the loss to rights holders was smaller than the costs of having protection schemes. Now that CD Writers are available, the need for software protection schemes has returned.

Right now the cost of bandwidth for transmission and storing large amounts of video on a users hard drive is just too expensive and not convenient. We expect that rights holders losses over the next few years would be commercially insignificant. However, once users have terabyte drives (4 years?), rights holders could find themselves in a very tough position as does the music industry today and perhaps the movie industry in another 2 years.

We believe that if Canada grants this right to Internet broadcasters without extensive consultation, that rights holders will remove a lot of content from existing BDUs.

4.0 Regulators

A technology dependent ruling now would be something that likely would have to be unwound over the next 3-5 years and could in that time substantially harm Canada. However as stated above there is a window of opportunity to find out. Piracy is not a problem now and the TV and Radio industry needs to experiment with the Internet.

5.0 Recommendations

Our recommendation would be to provide a small number of Internet TV/Radio licenses with the retransmission right. However, this should only be done after extensive dialog with the rights holders. They have legitimate reasons to be concerned and without their support the ramifications could be quite unpleasant.

6.0 General Comments

It is interesting to note that the Copyright Act has already encountered the redistribution problem and provided a retransmission right in the past. It is now facing the same issue for a wide variety of digital content. A Blanket License is very similar to a retransmission right. The automatic granting of the necessary rights and then paying the rights holders the appropriate share is a simple way of moving content industries forward and one that has worked in the past.