What the Copyright Modernization Act Means for Business Innovation

The Copyright Modernization Act maintains the Government of Canada's long-standing commitment to productivity and innovation by giving businesses the tools they need to perform activities integral to their businesses, invest and attract investment in their companies, and roll out cutting-edge business models. The key provisions that promote innovation include:

Promoting computer program innovation: The Bill allows third-party software companies to undertake activities related to software interoperability, error correction, reverse engineering, security testing and encryption research in order to develop new products and software solutions.

Allowing technical reproductions: The Bill clarifies that there are no copyright implications for temporary, technical and incidental digital reproductions made as part of a technical process, such as cached transmissions over the Internet.

Encouraging new technologies: The Bill's technology neutral provisions, including exceptions, encourage the development and use of new technologies such as the network personal video recorder.

Targeting those who promote and profit from infringement: The Bill prohibits the sale or import of tools or services to enable hacking of access or copy controls like digital locks. Penalties related to the digital lock provisions focus on those who profit from the manufacture and sale of hacking tools and services.

Protecting the investments of creators: Innovative companies, such as video game developers, will have the legal tools to protect the investments they have made in order to reinvest in future innovation and jobs.

Innovation is about building on existing ideas to solve new problems. Copyright plays a vital role in providing the incentive to create and invest in intellectual property. But copyright can sometimes be a barrier to the development of innovative products and services. For example, when the VCR was first developed, it was challenged in the United States by copyright owners as a device that could potentially be used for copyright infringement. While the court ultimately ruled in favour of the new technology, this case provides an example of the kind of uncertainty facing innovative businesses when their products and services have copyright implications.

The Copyright Modernization Act aims to eliminate some of the uncertainty facing innovative businesses. Provisions aimed at the software industry permit the reproduction of software and the hacking of digital locks in order to engage in reverse engineering, security testing and encryption research. Such provisions support, for example, companies that test software for security flaws and then develop and sell patches. Where copyright owners believe these tools have been misused, they will have recourse to deal with any infringement or inappropriate hacking of digital locks. The Bill also clarifies that companies do not face any copyright liability for technical copies that are essential but incidental to a product or service they offer.

The Bill's approach to new consumer exceptions is also designed with innovation and competition in mind. These technology-neutral provisions permit certain reasonable uses of copyrighted material without dictating specific products or services that must be used. This approach will spur competition and foster innovation by ensuring that businesses have the flexibility to develop and offer innovative products and services to consumers, provided they fall within the permitted scope of the law.

Important new education provisions will also mean that students will be well equipped to become tomorrow's innovators and entrepreneurs.