ARCHIVED — A CRIA

COPYRIGHT REFORM PROCESS

REPY COMMENTS

---

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.

---

Reply comment from The Canadian Recording Industry Association (CRIA) received on October 30, 2001 via e-mail

Subject: CRIA Reply to Submissions Regarding Consultation Papers on Digital Copyright Issues

Replies to Submissions: Digital Issues Consultation Paper

The Canadian Recording Industry Association (CRIA) makes the following comments in regard to certain submissions. CRIA would also like to reserve any further comments or replies that it may have or as may arise until a later date in the process of consultation.


WIPO Ratification


With very few exceptions among rights holders there is a consensus that this first step of copyright reform in respect of digital issues should be a step that includes WIPO Treaty implementation and ratification.

Canada is the sixth largest market for sound recordings by retail value behind France, Germany, the UK, Japan and the USA. Canada is ranked tenth largest market in terms of per capita sales of sound recording products. The recording industry in Canada has had retail sales in excess of one billion dollars annually since 1993. Although the percentage of domestic releases has increased from 10% to 12% over the last decade., in the last three years real growth in the Canadian industry has declined at a rate of 10%. This year alone, sales of recorded music are down by 8% over 2000, a loss that is attributable in large part to Internet piracy and CD-R piracy. Numerous studies by research firms and market agencies reported that the growing popularity of Internet piracy and trading in CD-R copies could make the next couple of years crucial to reverse these trends in Canada.

Many of the rights holders' submissions have noted that Canada is far behind its leading trading partners in the development of on-line laws and regulations. This "copyright protection gap" has begun to affect the businesses that rely on copyright protection. Even now the recording industry, one of the first copyright industries to be really affected by internet penetration, is beginning to experience the cumulative effects of both the proliferation of infringing copies of sound recordings available on line and the availability of personal digital replication devices.

The private copying levy and remuneration rights added to the Copyright Act in the last round of copyright reform were not intended to provide a compensatory stream of revenue for record companies and performers for developing e-commerce markets. Combined revenue for both private copying and neighbouring rights (public performance and communication to the public right to remuneration) was less than 1% of $1,216,800,000 for total income of the recording industry in Canada in 2000.


The process of copyright reform consultation is extremely important to the recording industry and the writers of music and performers of music that rely directly and indirectly on the recording industry for income. WIPO Treaty ratification must be the goal in this process to ensure that Canadian rights holders are at a competitive advantage with their foreign counterparts and to insure that the rights of Canadian creators are recognized in foreign countries. Global access via the internet makes it more significant now, than at any time before that Canadian rights holders can negotiate licenses for use of their copyrighted works, sound recordings and performers' performances in foreign markets with the assurance that their rights will be respected and that they will be fairly compensated in those markets.


Making Available


Many of the submissions posted refer to the right of making available as proposed in the Consultation Paper. In particular, CRIA will focus its response to the submissions of the Canadian Association of Broadcasters (CAB); the Canadian Cable Television Association (CCTA) and Aliant Inc, Bell Canada, etc. These three submissions were the most extensive in regard to comments concerning the right of making available for copyright in sound recordings and performers' performances.

There are misconceptions and fallacies inherent in the arguments raised in these submissions. The confused reasoning that forms the basis of discussion of a making available right in the CAB, CCTA and Aliant/Bell submissions may arise because the Digital Issues Consultation Paper was not as clear as it could have been and therefore left the impression that the Departments understood that the right of making available might only address "downloads" while "streaming" was a process that would already be encompassed by the right to remuneration for communication to the public by telecommunication.

CRIA noted the Consultation Paper might be misunderstood in this respect. We are, however, satisfied that the reference to "streaming" was not intended to be interpreted as a process of transmission on the internet that would fall within Article 15 of the WIPO Performances and Phonograms Treaty (WPPT), which preserves a right to remuneration for broadcasting and public performance.

The test set out in Articles 10 and 14 of the WPPT and in Article 8 of the WCT in respect of the right of making available is whether the transmission is an interactive communication. Interactivity is a matter of fact adducible in each case. The meaning of interactive as a legal concept is quite clear in and of itself and would require no further definition beyond that expressed in the text of the Treaties:

".... in such a way that members of the public may access them from a place and at a time individually chosen by them."

On the Internet there are no constant signals as in the case of radio wave and cable broadcasting. An Internet user makes a request to a site operator (content provider) who has posted the content for communication. While the content is available to the public, the actual communication, including streaming transmissions, is on a one to one basis: the transmission that causes the "communication" only occurs at the request or demand by the user.

This process is often referred to as "pull" technology. It replicates, for business models on the Internet, the present primary business model for the distribution of recorded music by record companies through "brick and mortar" record shops. The site operator, like the record shop, makes available copies of sound recordings, except without a tangible carrier. Whether the technical process of receiving the copies of sound recordings is streamed or downloaded should make no difference.

CRIA's members are under attack from the unauthorized use of their copyrights on the Internet. CRIA's members are criticized by the public and by the media because the media believes that they have no response to the supply of the e-commerce market place with unlawful copies. It is the lack of a legal structure including an exclusive right of making available on which to build new business ventures that is delaying the record companies' ability to provide the public with legal access to on-line recorded music and leaving the legal void to be filled with on line pirate copies.

Without a new exclusive right, CRIA's member and other sound recording rights holders are, according to those submissions referred to above, expected to survive and to develop e-commerce solutions in the online world within a compulsory license regime - neighbouring rights and a levy for private copying. Neither of these compulsory licensing schemes were intended as a solution to issues raised by digital technologies. Despite the misleading claims made in these submissions, private copying levies and compulsory public performance and communication licenses are not an adequate alternative to compensate record companies to the extent that they could continue to do business in an e-commerce market.

We recognize that the process of copyright reform can be slow but the recording industry is fast approaching a crisis point from which, for some companies, there can be no recovery. Those creators that are dependant on the recording industry, notably the composers of musical works, will also suffer if the recording industry is damaged because there are no adequate laws to encourage and protect new online business ventures. Sales of recorded music in Canada have declined 8% to date in 2001 and this decline is attributable to technical advances that make unauthorized copying and unlawful distribution of music available on the Internet. Numerous studies by research firms and market agencies reported the growing popularity of Internet piracy and trading in CD-R copies which could make the next couple of years crucial to reverse these trends in Canada.

The legal outlets for on-line access to Canadian creation and cultural business are not opening in this country but instead are channeled to the United States and Europe where copyright laws are keeping up with and responding to protect rights holders in the face of technical advancements.

It is no coincidence that there are now no significant startup lawful online music ventures in Canada by the multinational record companies, much less the Canadian independent record companies. Canada's copyright law will not foster development and growth of online ventures by record companies. No businesses, including the record companies, can afford to invest in new ventures that will surely fail because the law does not give adequate protection or encourage rights holders and users to negotiate fair compensation. No business that wishes to survive is going to allocate resources to new ventures where it is unable to exercise the freedom to negotiate on the basis of a market driven value for its products and services.

Businesses, including the record companies, cannot be competitive if the value of their goods and services are set by a tribunal and not by the market forces of supply and demand. A public regulatory body such as the Copyright Board serves the ends of collective licensing by agencies and societies that do not invest risk capital in development of artistic expression. The Copyright Board was, however,never intended as the regulator of the sound recording business. The Internet and technical advancements should not suddenly broaden the Copyright Board's mandate to now regulate all copyright businesses only because these involve telecommunication.

The Internet and the services proposed for the Internet are not similar to broadcasting and should not be categorized or treated as if these services are broadcasting. This simplistic and naive proposition is put forward by the CCTA, the CAB and the Aliant /Bell in their respective submissions. On the Internet there is, for example, no constant feed of programming in a fixed signal that is always available to a listener to "tune into", as is the case for a broadcast signal. The interactive nature of the technology inherent in Internet transmissions is what distinguishes the Internet from traditional broadcasting.

The current legal system of copyright in Canada pertaining to the rights of producers of sound recordings is designed for an analogue world of radio and cable broadcast signals and tangible carriers of recorded music like CDs, tapes and vinyl records. The so called "technological neutrality' of the Copyright Act actually hurts copyright owners of sound recordings by squeezing all the potential uses of the Internet into a "one size fits all" envelope of copyright law restricted to compulsory licensing. The result for Canadian copyright holders in sound recordings is that under the present copyright system uses on the internet that will and are replacing the sales of tangible products like CD's that embody recorded music would be treated as if these were broadcast signals.

Record companies are not legally permitted to negotiate the value of their copyrights communicated or any transmission of sound recordings under the present Copyright Act. Rather, the compensation for use and value of the record companies' copyrighted property is determined by a government appointed board under what is known as a compulsory license regime.

A compulsory license regime intended to compensate rights owners for a secondary exploitation of sound recordings by broadcasters will not permit the development of the record companies' proposed business models that would deliver sound recordings on the Internet as a primary exploitation of their copyrights.

The exclusive right of reproduction, to make copies, is still a very important core right but alone it is insufficient to permit record companies to carry out their business plans for Internet delivery of sound recordings. The reproduction necessary for delivery of recorded music on the Internet is only part of the transaction that occurs for on-line transmissions of digital copies. The seminal transaction is the transmission of the copy, which is protected by the exclusive right of communication. Canadian copyright law does not provide record companies with an exclusive right of communication.

In the submission of the Media Content Coalition, a coalition in which the CAB is a prominent participant the following condemnation of compulsory licensing is made in respect to application for the Internet of the retransmission regime in section 31 of the Copyright Act:

"20. The essential function of copyright law is that it requires a bona fide user of a copyrighted work to have the consent of the owner. A compulsory license removes the owner's right to choose how, when and by whom his/her works will be used and replaces the right to choose with a right to a "fair and equitable" royalty determined by an administrative tribunal. Such a mechanism treats all works as fungible goods, paid for in a way that is, at best, only fair and equitable on average.

21. A compulsory license is an extraordinary limitation on owner's rights, all the more so if available to a technology (such as the Internet), which has the potential to destroy the established domestic and international markets for uses that are authorized.

22.The Canadian broadcasting system is vitally dependent on programs created and financed by copyright owners and in that context; program rights are the linchpins of the system. Without a vibrant marketplace for program rights, creators cannot be properly compensated and the objectives of the Broadcasting Act will not be able to be achieved. That is why any resort to a compulsory license regime should be strictly confined and limited in its application.

23. A compulsory license is a form of expropriation: private property is made available for uses that the owner has not authorized (and would not voluntarily authorize), for royalties determined by a tribunal. Regulated royalties cannot rebalance the resulting inequities when the tribunal setting those royalties must take into account the user's ability to pay, rather than the fair market value of the subject rights and the harm done to the rights holders."

These are statements that CRIA can endorse in respect to opposing any suggestion that streaming activities should be subject to a compulsory license. In addition, we find it difficult to reconcile the position taken by the CAB who oppose collective licensing of retransmissions on the Internet, when this is commercially expedient to their ends but then hypocritically plead that exclusive rights for producers and performers such as an exclusive right of making available is unnecessary.

Reprinted below are excerpts from the CAB's submission to the Digital Issues Consultation Paper. There is an inherent contradiction with respect to the same arguments the CAB has made above as a member of the MCC in conjunction to the retransmission regime. Note should be taken of the inconsistent position in the first item set out below in which the CAB discredits the adherence to the WIPO Treaties by dismissing these treaties that are embraced, they claim, only by a "few" countries; a statement that is factually incorrect. Then, in an about face in item 3, CAB applauds WIPO for moving ahead with a so-called Broadcast right. Further, the CAB calls for new rights to the detriment of copyright holders existing rights.

"First, the CAB does not believe that Canada should rush to treaty ratification: today, very few countries have actually ratified the treaties. A better approach is to reform Canada's Act domestically, using WCT and WPPT as a guide, and examine how the markets for creators and users evolve.

Second, minimalist reform geared towards bare treaty ratification undermines the Departments' objective of seeking creator/user balance and the need to take into account a full range of Canadian priorities, choices and values, as the treaties mandate new rights while making the grant of exceptions optional.

Finally, while the need in Canada for a plethora of new rights to address the implications of digital use may well be unnecessary, it is clear that any digital reform proposal should include an exclusive broadcast signal right. The inadvertent ambiguities of s. 31 of the current Copyright Act (the "Act"), coupled with the debilitating harm to existing business models for the marketing of program rights and Canadian cultural policy objectives posed by unauthorized on-line transmissions of programs, is sufficiently serious to merit the introduction of a signal right. In order to survive in the new digital environment, broadcasters require greater rights to control the exploitation of their signals. Moreover, while international initiatives shall serve as a guide for, not a master of, Canadian copyright reform, it is notable that at the international level, WIPO is well advanced in its process directed to the adoption of a treaty to address these broadcaster interests. Notably, the United States already require
s broadcaster consent with respect to the retransmission of broadcast signals."

Broadcasters produce only derivative subject matter that would not exist were it not for the investment and risks taken by the recording industry in the talents of performing artists and the music of composers. While broadcasters and others may expose music to the public as part of a profit making enterprise, they do not contribute to the creation of recorded music and broadcasters do not expose their business plans to the risks inherent to the development of recorded music. Broadcasters are seeking an economic advantage to expand their current businesses far beyond what they have referred to as "traditional" broadcasting. While the recording industry might applaud broadcasters and the others for this initiative and even welcome competition among distributors of music on-line , it is not appropriate policy for the government to, in effect, "subsidize" these new business ventures of broadcasters and others by limiting copyright owners to mere rights to remuneration in respect to any transmissions of their sou
nd recordings on the Internet as the submission of the CAB suggests.

It is also clear from the text of the WIPO Performance and Phonograms Treaty that Article 15 was not intended to be anything more than a restatement of Article 12 of the Rome Convention. In the guide to the Rome Convention, the right to remuneration established in Article 12 is described as dealing with "secondary uses". Primary uses of sound recordings were, at the time the Rome Convention was established, the distribution and sale of sound recordings on physical carriers such as tapes and CD's. The primary uses of sound recordings on tangible carriers were, in the early 1960's when the Rome Convention was completeld, the core business of the recording industry and were protected by the exclusive right of reproduction which was exercised with the making of each copy embodied on a tangible carrier. Secondary uses were conceived of as public performance and broadcasting and were peripheral to the core business of the recording industry which is the distribution and sale of copies of sound recordings on tangibl
e carriers.

As well, there is nothing in the text of the WPPT nor in the literature that has since been generated in regard to critiquing the new right of making available that would suggest that Articles 10 and 14 would apply in respect to some forms of transmissions and not others even though both were interactive and transmissions. The broadcasters and the others, that have suggested that streaming would not be subject to an exclusive right of making available have completely failed to support this flawed proposition with any reasoned argument or fact.

The CAB and others, including some private submissions, have also taken the position that the introduction of an exclusive right of making available for performers and producers of sound recordings would damage rights owners in musical works. In making this proposition, they argue that section 90 of the Copyright Act establishes a hierarchy or class system of rights and that in no instance can the exploitation of performers' and producers' rights interfere with the exploitation of producer's rights. In making this argument, they draw the obvious parallel between section 90 and Article 1(3) of the WPPT which have a largely identical meaning.

Unfortunately, the CAB and these private submissions have completely misread section 90 and article 1(3) and attempted to craft from it what could only be considered an absurd result. If what the CAB has claimed in its discussion of section 90 were remotely accurate, record companies would violate this provision all the time when exercising their exclusive right of reproduction. Record companies have been exercising an exclusive right of reproduction since 1924 when this right was first introduced and it has benefited both record producers and music publishers and composers.

As well, record companies routinely deny inappropriate uses of their copyrighted sound recordings, especially if pirates propagate those uses. The CAB's argument and the arguments of the other submissions regarding section 90 and Article 1(3) would lead to a ridiculous extreme that would suggest that record companies should not be able to seek to remove pirate copies of sound recordings from the Internet because authors' collecting rights societies might have a tariff in place that would compensate authors with royalties for the transmission of musical works on the pirate copies of sound recordings. That is certainly not the intent of the legislation.

ISP Liability

Generally, with exception to the America On Line Time Warner (AOL) submission, the submissions from ISP's represented by CAIP and CCTA respectively were disappointing.

CRIA's submission and the submission of AOL were reasonable, practical and offered a realistic alternative to the proposal that was put forward in the Digital Issues Consultation Paper. The submissions of, for example, the Canadian Association of Internet Providers (CAIP) and the Canadian Cable Television Association (CCTA) are neither reasonable or workable. We particularly find it interesting that AOL could present such a reasoned submission based in large part on the principles established in the DMCA with respect to the ISP liability issue and at the same time remain represented by the extreme views found in CAIP's submission.

Before addressing some specific aspects of the submissions of CAIP and CCTA, among others, it is necessary to present some of the factual aspects of the Internet and the role of the ISP that were not discussed in the submissions of these organizations representing ISP's.

The Internet is unlike other communications networks. In traditional broadcasting there is sufficient regulation that requires those individuals and entities that transmit radio signals to be identifiable as well as accountable for the content they transmit. The same transparency and accountability applies for cable transmissions of broadcast signals. In this setting, if there is an infringement of copyright or a dispute over the exercise of rights, the parties can identify eachother for the purposes of notice to resolve issues or take legal action if necessary. Even the general system of telephony in Canada provides some easy identification of the users of the telephone system, where it is easy to cross-reference names, numbers and addresses; the only exception is the occasional unlisted telephone number.

In a system such as the radio and cable broadcasting networks where there is transparency so that all parties are openly and publicly identifiable it is possible to accept the practical reason for an exemption such as the so-called "common carrier" exemption in section 2.4(1)(b) of the Copyright Act.

The Internet, in contrast, does not resemble traditional broadcasting and telecommunications and therefore it is not appropriate for policy to attempt to impose the existing exemption for common carriers in the same manner intended to limit liability of common carriers for traditional communications and apply this to the Internet and the role of ISP's.

The Internet is a worldwide network of connected computers where the greater proportion of users are not identifiable. These same users can anonymously operate servers that transmit millions of files of infringing copies of copyrighted works and performers' performances and sound recordings, including movies, books and software. The vast majority of Internet users are known only by an Internet protocol address, which is assigned to them by their local ISP. Only the ISP has the identity of its subscribers who are the users of the Internet and the transmitters of content, including content in pirated copies.

There are extensive terms of use imposed on subscribers by most, if not all, the ISPs in Canada in various standard form contracts, between the ISP's and each of their subscribers. Typical clauses in such standard form contracts request extensive indemnities from subscribers and set up rules of use and penalties for misuse, including misuse by infringing copyright. ISP's also typically reserve the right to monitor use and to suspend the subscriber's connection if they fail to comply with the "acceptable use policy" of the ISP.

This is the accepted business practice and differentiates the role of ISP's from common carriers in traditional communications such as broadcasting. ISP's provide the means of connectivity and they also maintain the security of the identity of their subscribers. These additional services are more than merely offering the means of telecommunication.

There are among some of the submissions, notably Telus, CAIP and CCTA, references to the working arrangement that has been achieved between copyright holders represented by CRIA and the two associations; CAIP and CCTA. The nature of this relationship is based on the real prospect of legal action against an ISP under the principles of joint liability for infringement and infringement of the right to authorize a reproduction of a sound recording.

The purpose of this arrangement was, from the prospective of the recording industry, necessary to expedite the ISP's response to notice and takedown (cease and desist) correspondence to the ISP. Such notice and takedown correspondence would be sent to the site operators; however, the ISP protects the identification of their subscribers. Each additional day that sites of infringing copies of sound recordings remain accessible, the rights owners are at risk to increasing losses. This is not a situation that is particular to Canada. Notice and take down arrangements are part of an international initiative that involves centralized web searching facilities that scour the Internet for sites with content of infringing copies of sound recordings. From this centralized web searching facility notices of infringing sites are generated to be sent from the country in which the search engines located the site. Prior to sending notice and take down correspondence evidence of infringement is collected and preserved in the
event that legal action is deemed necessary as a last resort.

As noted in CRIA's submission, it would be preferable for all if the rules and responsibilities of the parties ISP's site operators and copyright holders were more clearly defined in the legislation. Under the present legislation, CRIA is confident that ISP's are liable for the infringements of their subscribers and rights owners are willing to litigate if necessary even at great cost to all concerned.

Unless the legislation is amended to specify responsibilities of rights holders and intermediaries in a statutory scheme that reflects the principles established in the E-Commerce Directive and the DMCA, the alternative is that the legislation should not be amended at all and that the status quo should be maintained.

In specific reply to the submission of Aliant Inc., Bell etc. regarding its proposal of an exemption to the reproduction right for transient copies in relation to so called "webcasting" (streaming), the following should be considered. The exemption for transient copies referenced in the E-Commerce Directive is very narrowly conceived and recourse to an injunction is available to copyright owners. This principle is mirrored in the US Copyright Office 104 report that directly addressed this issue. That report was released in August 2001 and only makes general proposals; however, the US Copyright Office proposed in that report that transient copies made in the course of a legal webcast might be considered exempt, based on the reasoning that in a streamed signal these reproductions are necessary and incidental to the transmission. The US Copyright Office did not consider that a similar exemption would be appropriate for a down load where the reproduction is a primary aspect of the use and transmission of the cop
yright content. Furthermore, the transient exemption mentioned in the US Copyright Office report would only crystallize (take effect) if the transmission (communication) itself were authorized or permitted by law; otherwise those incidental reproductions would be infringing and attract liability, even if incidental to any unlawful transmission of copyrighted content. Under US copyright law, an ISP that failed to qualify for the safe harbour exemptions could be liable for contributory infringement or vicariously liable for copyright infringement for those transient copies.

The practical aspect of the issue of ISP liability should be taken into consideration. The record industry is not in the business of litigating pirates and infringers. All legal action, including all the preparatory investigations, is undertaken by record companies at great cost. The reason that the record industry has to undertake this task is because it is losing revenues from sales lost to the trading of infringing music files of sound recordings that are escalating daily. As noted above, only the ISP is a visible participant in these infringing activities and in fact, the ISP profits because many of its paying subscribers are also the infringers. The recording industry is sympathetic to the predicament placed on the ISP by technology and the market place for communication, but it is not appropriate policy to create exemptions that require copyright holders, including the record industry, to subsidizethe ISP's liability with growing loses to piracy on-line.


Technological Measures


As a general reply to all submissions that oppose in whole or part the necessity for technical measures, including measures to prevent trafficking in circumventing devices, CRIA thinks that it is important to note that the principle behind technological measures in the WIPO treaties was not conceived to assist copyright owners to prevent access to their works, sound recordings and performers; performances; rather, its purpose is to prevent infringement and access to infringing copies of the copyright owners works, sound recordings and performers performances.

CRIA is sensitive to the need to find a reasonable balance between protection of copyright through the use of technological measures and the need to encourage research and development. CRIA believes that this balance can be achieved and notes, for example that the DMCA includes within the provisions of section 1201 the following list of specific purpose exemptions:

* nonprofit library, archive and educational institution exemption;
* reverse engineering exemption;
* encryption research exemption
* an exemption for a court to require circumvention of a component that would provide access to minors of prohibited content;
* an exemption for personal privacy;
* an exemption for security testing.

Under the DMCA provisions, each of these exemptions has its own set of conditions. This model attempts to balance legitimate exemptions of particular scope with the object of rights protection. A similar model would be applicable as an amendment and should be studied in the process of consultations.

CRIA notes that there has been almost no opposition to provisions that would operate to protect rights holders for acts of circumvention. This, however, is not sufficient on its own without provisions that prohibit circumventing devices. CRIA agrees with the submission of IBM that supports measures to prevent the sale or manufacture and importation of devices that:

"In a world where most of the use takes place in private (at home, in the work place) the authorities tasked with enforcement would be very hard pressed to obtain actual proof of use, and probably even more reluctant to lay charges (whether under the copyright Act or otherwise). In the satellite decoder example, the target is not currently the end user of the decoders, but those who manufacture and sell such devices to end users."

Works in the public domain should not be affected by technical measures, as they would not violate any anti-circumvention legislation that would prevent access to these works. Even the imposition of measures that would prevent dealing in circumvention devices would not create a barrier to public domain works and subject matter, as devices that can access public domain works would not be infringing.

Technical measures are not likely to impede market development as is the complaint issued in some of the submissions. Any problems can be remedied by providing legal mechanisms for review of the legislation as technology progresses or changes and with it changing market place realities. We agree with the AOL submission in this regard and recommend that the government think carefully of this approach, which allows for deployment of anticircumvention measures to protect copyright now while the online market place is developing for rights holders and users alike. If, on review of the legislation, there is need for specific rule making to allow certain exemptions as the need arises then this can be accomplished in a balanced and reasoned process and not in the crucible of litigation.

Further, some submissions noted that legal technological measures will create incentives for development of more user sensitive technology that would approximate smart devices and software that could, for example, distinguish public domain subject matter from non public domain subject matter or certain exempted uses from non exempted uses.


Rights Management


With rare exception most of the submissions support rights management provisions and many noted that the correct implementation of a rights management provision would be to adopt the definition of rights management in Article 19 in the WPPT and Article 12 of the WCT.


CRIA does not agree with the submission of the Aliant/Bell corporations that a rights management provision should be subject to existing exemptions or limitations such as fair dealing. This would not be an appropriate course to follow, as many of the existing exemptions would not be applicable in a digital environment. Rights management measures would, in fact, make the process of clearing rights much faster and more efficient thus making many of the existing exemptions that provide a limitation for easy access no longer relevant in a digital environment. Protection against circumvention and tampering with rights management information will be essential if this is to be relied on by those who previously were exempted.

By the same token it would not be efficient nor appropriate policy to expand the format transfer exemption in section 30.9 beyond its present parameters as is suggested in some of the submissions including the CAB's. As CRIA pointed out in its submission, many of the limitations and exemptions for tangible copies would not have equivalent purpose in a market for intangible copies. Format transfer is one of the obvious examples.

Some submissions including the CAB submission question whether right management information would be reliable and whether users (broadcasters) should be liable if they rely on this information. AOL's Time Warner's submission resolves this concern:

"The fact that information may cease to be accurate over time should not affect this conclusion. The best guarantee of accuracy it the right holders' interest in ensuring effective licensing and payment, as well as reliable communication with audiences. Moreover, the digital environment enhances the ability to provide constantly updated information, through the use of dynamic databases of identifying codes, which can be provided to users through references or links. In order to allay any concern, however, the legislation could make clear that the alteration of rights management information in good faith for the sole purpose of correcting inaccuracies would not be prohibited. (The treaties require that the prohibition extend only to acts performed "knowing, or ...with reasonable grounds to know, that [the act] will induce, enable, facilitate or conceal an infringement.")"

In regard to the submissions that have raised concerns that liability should not be imposed if the rights management information is false, it would not be appropriate that liability should be imposed unless the user had knowledge that the rights management information was false. This is consistent with Article 19 of the WPPT and Article 12 of the WCT.

Both criminal and civil remedies for circumvention of technical measures and rights management are appropriate. Criminal remedies should apply where there is an element of commercial advantage or monetary gain involved. It is also appropriate that allowances be made for innocent violations as proposed in some of the submissions but in all such cases there is need to maintain the copyright owners' recourse to injunctive relief.


CRIA agrees with submissions that recognize that it is necessary that special provisions to limit liability for damages be included for non-profit, educational institutions, libraries and archives that inadvertently circumvent a technological measure or rights management information, provided that in all cases injunctive relief is available to the copyright holder. In these cases, criminal remedies should not apply.





CRIA did not submit comments in respect of the retransmission regime although it concurs with the comments expressed in the submission of the Directors Guild of Canada (DGC) and in the submission of the Media Content Coalition (MCC). Many of the concerns and recommendations expressed in these submissions are as applicable to transmissions of sound recordings on the Internet as they are to other works. CRIA joins with these organizations in the common proposition that compulsory licenses should not be applicable to the transmission of copyrighted works on the Internet, including sound recordings. Specifically, CRIA agrees that the retransmission provisions of the Copyright Act were intended for non-digital technologies and were clearly not designed for the Internet.

CRIA concurs with the submissions of the DGC in regard to compulsory licensing and the burden to be placed on legislators when enacting this type of extraordinary measure. The Internet is not a medium of delivery of copyrighted products that requires the last resort provision of a compulsory license regime as conceived in the retransmission provisions of section 31 of the Copyright Act or in the so-called "neighbouring rights", which currently extend only a right to remuneration for public performance and communication to the public by telecommunication. Neither of these compulsory regimes should be extended to any Internet uses of sound recordings works or performers' performances.

CRIA agrees with the DGC that a compulsory license does not further the public's interest in the promotion of innovation in the market place. The Internet is a dynamic and expanding market which should be left to develop with out interference of an imposed regulatory regime.

CRIA also agrees with the DGC that extending a compulsory regime such as the retransmission regime to the Internet would "preempt the developing market for direct exploitation of audio visual work on line." This proposition of the DGC applies with equal merit to the issue raised in a number of submission that argue that streaming of sound recordings is a use that falls under the compulsory license in the right to remuneration. If that argument were accepted, it would surely pre-empt the developing market for subscription services and other primary uses of sound recordings that would utilize streaming technologies and technologies that are similar to streaming. As noted above, these uses are interactive and therefore should not be subjected to a compulsory license.

The DCG makes a valid point that the CRTC has decided to exempt Internet transmissions from regulation because it would not develop and benefit Canadian consumers or businesses. The DGC submission carries this point further by noting that the Internet retransmitters, if freed from regulation and licensing, would seek to impose regulation and compulsory licensing on copyright owners.

"This is a classic case of sucking and blowing . The wonder is that commentators, who support Internet retransmitters as free market "innovators", have failed to see the contradiction. They miss the perverse fact that the compulsory retransmission license is regulation, for the purposes of the Copyright Act."

A new level of perversity is added to this statement by the DGC when one realizes that the broadcasters who argue as allies with the DGC against the retransmission compulsory license are the same broadcasters that argue that a compulsory license should apply with respect to streaming of sound recordings on the Internet. As the DGC points out, new media players are free to innovate and develop the Internet without the impediment of regulation. Rights holders,including those who hold rights in sound recordings and performances, should have a similar freedom.


Conclusion


There is hope that this process will have enlightened and informed the various stakeholders as well as the Policy Advisors of the two Departments. We trust that the urgency to move forward with the process of copyright reform that will implement the principles of the two WIPO treaties in Canadian law and allow Canada to ratify the Treaties is a message that will be well received.

As CRIA has noted above. Canada's development of the Internet as a medium for the distribution of expression will not develop without adequate legislative underpinnings to encourage creation by protecting creation. Further delay in this important process will put our cultural and creative industries farther back. The emphasis on connectivity to the Internet for all Canadians is only half of the process. Connectivity without new content is meaningless.

CRIA anticipates participating in the important process of ratification of the WIPO Treaties. CRIA thanks the Departments of Industry Canada and Canadian Heritage for commencing this process.

All of which is respectfully submitted.