Wednesday, May 15, 2019

The Canadian House of Commons Copyright “Shifting Paradigms” Report – Let’s Just Call it the “Values Gap” Report





 Graham Henderson, President, Music Canada http://musiccanada.com/contact/

The House of Commons Heritage Committee copyright report entitled "Shifting Paradigms" is out. It seems even more imbalanced & problematic than the 1985 Charter of Rights for Creators report or the infamous 2004 "Bulte" report. I'll be calling this the "Values Gap" report, with no apology to the inaptly named lobbying group Music Canada (which largely represents the international sound recording industry) and which has been pushing the phrase “Value Gap” for a long time.

Michael Geist explains how the Committee acted outside its mandate of looking at remuneration models in order to help the INDU Committee in its forthcoming s. 92 report. Instead, Committee Chair Julie Dabrusin rubber stamped lobbying positions of the music, publishing and collective sectors . For example, it notably embraces Access Copyright’s devious attempt to make tariffs mandatory by harmonizing tariff regimes and statutory minimum damages, an approach that  appeared to have also received early but hopefully not lasting sympathy from DG Mark Schaan at ISED and perhaps other officials.

This is the most over-the-top copyright event I’ve seen since the 1985 Charter of Rights for Creators and the infamous 2004 Bulte Report. Michael Geist has aptly penned the name “Bulte Redux” to today’s report – referring to a former Liberal MP once touted as the next Canadian Heritage minister.

For those who don’t know Canadian copyright history and may be condemned to repeat it, Sarmite Bulte’s political career ended a couple of years after her very one sided report when her closeness to the entertainment and collective sectors was exposed and she was defeated in her reelection in the presumed safe Liberal seat of Toronto Parkdale in 2006. Had she been reelected, and the Liberals not defeated, she might have been the next Heritage Minister. But flying to high with the copyright lobby effectively ended her political career.

Anyway, here are the recommendations of today’s report which I shall henceforth call the “Values Gap” report because it is so one-sided and so completely falls short of the values of balance, evidence-based analysis, and democratic responsibility that we would expect from a Canadian parliamentary committee. The Committee simply ignored the testimony of those with whom it disagreed, including, as Michael Geist points out, Professors Jeremy de Beer, Ariel Katz, Nick Mount, Meera Nair along with author Cory Doctorow and me, lawyer Howard Knopf. Hopefully, INDU and Cabinet will do much better. I’ve highlighted some of the more outrageous and insupportable recommendations:

Recommendation 1
That the Government of Canada increase its support for creators and creative
industries in adapting to new digital markets............................................................... 9
Recommendation 2
That the Government of Canada develop mechanisms by which streaming
services will develop and promote Canadian content. ............................................... 15
Recommendation 3
That the Government of Canada create educational materials to raise
awareness of copyright provisions and artist remuneration for consumers. .............. 16
Recommendation 4
That the Government of Canada create educational materials to raise
awareness of copyright provisions as well as artists’ rights and responsibilities
under the Copyright Act for artists and creators. ........................................................ 16
Recommendation 5
That the Government of Canada review the safe harbour exceptions and laws
to ensure that Internet service providers are accountable for their role in the
distribution of content. .............................................................................................. 19
Recommendation 6
That the Government of Canada increase its efforts to combat piracy and
enforce copyright. ...................................................................................................... 19
Recommendation 7
That the Government of Canada pursue its commitment to implement the
extension of copyright from 50 to 70 years after the author’s death. ......................... 22
Recommendation 8
That music streaming services be regulated like other Canadian music services. ....... 24
Recommendation 9
That tariffs for online music services be reviewed by the Copyright Board to
ensure royalty payments provide fair compensation for artists................................. 24
Recommendation 10
That the Government of Canada amend the radio royalty exemption found at
section 68.1(1) of the Copyright Act so that it applies only to independent
and/or community-based radio stations. ................................................................... 26
Recommendation 11
That the Government of Canada amend the definition of sound recording
found in section 2 of the Copyright Act to allow sound recordings used in
television and film to be eligible for public performance remuneration. .................... 28
Recommendation 12
That the Government of Canada review, clarify and/or remove exceptions
contained in the Copyright Act, ensuring that any exception respects section 9
of the Berne Convention for the Protection of Literary and Artistic Works, to
which Canada is a signatory. ...................................................................................... 30
Recommendation 13
That the Government of Canada meet international treaty obligations
(including Berne Convention for the Protection of Literary and Artistic Works,
the Trade-Related Aspects of Intellectual Property Rights Agreement, and
World Intellectual Property Organization Copyright Treaty). ..................................... 30
Recommendation 14
That the Government of Canada amend subsection 14(1) of the Copyright Act
so that it reads “from 25 years after assignment.” ..................................................... 31
Recommendation 15
That the exception for charitable organizations in subsection 32.2(3) of the
Copyright Act be clarified to apply strictly to activities where no commercial
monetary gain is intended. ........................................................................................ 33
Recommendation 16
That the Government of Canada extend moral and economic rights to
audiovisual performers. ............................................................................................. 35
Recommendation 17
That the Government of Canada amend section 34.1 of the Copyright Act to
deem the screenwriter and director the co-owners of copyright and co-authors
of a television or cinematographic work. ................................................................... 37
Recommendation 18
That Government of Canada amend the Act to clarify that fair dealing should
not apply to educational institutions when the work is commercially available. ........ 43
Recommendation 19
That the Government of Canada promote a return to licensing through
collective societies. .................................................................................................... 43
Recommendation 20
That the Government of Canada review, harmonize and improve the
enforcement of the statutory damages for infringement for non-commercial
use in section 38.1(1) of the Copyright Act. ................................................................ 43
Recommendation 21
That the Government of Canada harmonize remedies for collective societies
under the Copyright Act. ............................................................................................ 43
Recommendation 22
That the Government of Canada establish an artist’s resale right............................... 47

PS – the Committee is obviously unaware that Canada meets or exceeds all of its international obligations as I’ve pointed out many times before, and in many respects much more so than the USA, which is ultimate source of much of the lobbying that went into this sadly bad report.

HPK

Monday, April 29, 2019

What Could Possibly Go Wrong with the Government’s Proposed Regulations re Time Limits at Canada’s Copyright Board?



A Canadian Glacier

This was in my email earlier today from Mark Schaan, Director General, Marketplace Framework Policy Branch at ISED Canada:
           
As you know, a transparent and predictable Board is key to a well-functioning copyright marketplace in Canada. Public consultations held in 2017-2018 confirmed that issues with the Board’s decision-making processes were substantial and structural. The Government of Canada has therefore taken comprehensive actions on these issues by introducing legislative reforms to the Copyright Act, which came into force on April 1, 2019. These changes include measures to reduce delays, notably a new regulatory power of the Governor in Council to establish time limits for Board proceedings.

Pursuant to this new power, draft regulations setting out decision-making deadlines for the Board were published in the Canada Gazette, Part I on April 27, 2019, and can be consulted at the following address: Regulations Establishing Time Limits in Relation to Matters Before the Copyright Board.

Interested Canadians have the opportunity to review and provide comments on the proposed regulations until May 27, 2019. Once enacted, the regulations will be published in their final form in the Canada Gazette, Part II
….
(highlight added)


Let’s cut to the chase here. The proposed regulations – which could have been implemented many years ago and which did NOT need any new enabling legislation ­­– may very well make things even worse in terms of delay and may be used to attempt to normalize delays that are already inexplicable and unacceptable.

These essence of the proposed regs is this:

Time Limits

Proposed tariff

2 The Board must make a decision with respect to the approval of a proposed tariff under subsection 70(1) or 83(8) of the Act

    (a) in the case where the Board holds any oral or written hearings in respect of the matter, within 12 months after the conclusion of those hearings; or
    (b) in any other case, before the day on which the effective period for the proposed tariff begins.

Royalty rates or related terms and conditions

3 The Board must fix the royalty rates or their related terms and conditions, or both, as the case may be, under subsection 71(2) of the Act within 12 months after the conclusion of any oral or written hearings that are held by the Board in respect of the matter.

Notice to parties

4 The Board must, within two months after the expiry of the period referred to in subsection 68.3(2) or 83(5) of the Act, notify the collective society that filed a proposed tariff and any person or entity that filed an objection to the proposed tariff of whether the Board will hold an oral or written hearing in respect of the proposed tariff.
Extension of time limit

5 (1) Despite sections 2 and 3, the Board may, to take into account the existence of exceptional circumstances, give a direction or make an order that extends the time limit for the making of a decision by a period that is referred to in the direction or order.

Notice

(2) After giving a direction or making an order referred to in subsection (1), the Board must publish a notice of the direction or order that sets out the extension of the time limit, the exceptional circumstances that justify the extension of the time limit and the extended period.

Board’s decision

(3) The Board must make the decision within the period that is referred to in the direction or order.

(highlight added)

What could possibly go wrong?

The requirement that a tariff where no hearing is required be decided before the effective period is sensible and obvious – though the Board’s discretion as to whether a hearing is required is potentially concerning.

The real problem is that the apparently good news that a tariff be decided “within 12 months after the conclusion of those hearings” is potentially actually rather bad news. Here’s why: 
·        It often takes the Board four years or more from a tariff filing to even get to the hearing stage. In the case of the currently highly fraught Access Copyright proposed PSE tariffs spanning 2011-2013 and 2014-2017, the effectively uncontested hearing was not held until 2016 – almost six years after the tariff was filed – and the decision is still pending and likely going to prove very problematic, as I hinted at earlier today. Nine years and counting for a decision on an effectively uncontested tariff is simply inexplicable and unacceptable.
·       Worse still, it is often far from clear at precisely what time the “conclusion” of a hearing takes place. The Board frequently has afterthoughts and questions and keeps the record open for some time. Despite enormous expense in many cases, the parties don’t always put their best foot forward at the earliest opportunity. Moreover, the Board has rarely been effective in restraining excessive and irrelevant interrogatories. For example it did too little too late to restrain unnecessary submission of dozens of unnecessary interrogatory responses in the Access Copyright Post Secondary proceeding that is still underway. In normal judicial proceedings, Courts reserve judgment at the conclusion of the oral hearing – and that is it – the record is closed. One waits and hopes for the best and a decision is normally rendered within six months. The record is very rarely re-opened – except in very exceptional circumstances such as when an important and potentially binding decision is rendered by another court before judgment is pronounced.
I have written about and testified about the problem of Copyright Board delays at length and for years. The Board is not exactly the busiest tribunal anywhere – it has been about two years since it last held an oral hearing and no more are scheduled until April 28, 2020. It has been given an extra million dollars a year, which may result in even more delays while it figures out how to spend this money. This gives it an even  bigger budget than the Competition Tribunal which already had a smaller budget and fewer staff  than the Board – and which has a much greater workload and cases that are sometimes of immense economic significance and legal complexity compared to most Copyright Board proceedings.

There is a really simple solution to all of this as inspired by the regime in place for the Patented Medicines Notice of Compliance (“PMNOC”) proceedings, which is to fix an absolute time limit and force the Board and parties to comply: 
·       The Copyright Board should be required to render a final decision on contested tariffs within 24 months from the time the proposed tariff is published in the Canada Gazette.
This option was at least mentioned in the above notice. If Federal Court can make this work to get to a decision within 24 months in very complex PMNOC hearings that often involve hundreds of millions of dollars, surely the Copyright Board can make this work.

The US Copyright Tribunal has a hard deadline requirement. It must issue its decisions within 11 months as follows:
§352.2   Timing.
The Copyright Royalty Judges will issue their determination within 11 months of the date of the post-discovery settlement conference or 15 days before the expiration of the existing rates or terms in a proceeding to determine successors to rates or terms that will expire on a specific date, whichever date first occurs. The date the determination is “issued” refers to the date of the order.
(highlight added)

Copyright Board proceedings often take inexplicably and even absurdly long. The outcome is often more or less an average of the figures initially proposed by the main parties, and the Board is frequently subject to successful judicial review. There are powerful interests who are not interested in changing the status quo in any meaningful way.

The current proposals may make things even worse by supposedly “normalizing” extensive delays in scheduling hearings that take years to happen and may have a very indefinite and untimely “conclusion”. Twelve months after an indefinite point in time many years away is hardly comforting and not a good or even adequate solution.

Note the above highlighted date of May 27, 2019 to respond to the Government,

HPK

The Copyright Board’s “New Leaf”? Not So Much and Not at All


By Jin Zan - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=43789998

On April 14, 2019 I blogged with great optimism that:
On March 6, 2019 the Copyright Board appears to have turned over one new leaf by asking for comments more than three years after the close of the hearing from “affected persons” on the “feasibility and clarity of the terms of the tariff” with respect to Access Copyright’s proposed tariffs for the Post-Secondary Educational (“PSE”) Institutions.  I reported on this here. Those entitled to comment potentially included lots of people and institutions that may have withdrawn from this nearly nine-year-old saga or may even have never engaged. In the past, the Board has limited acceptance of comments to a short window following the close of the oral hearing.

The invitation resulted in 11 submissions, which have conveniently been made available here from the Board itself – a helpful and timely development and another new leaf in itself. (Publishing filed court and tribunal public documents is a crucial component of access to justice). From the users’ point of view, these submissions feature a comforting degree of consistency and, at the same time, a considerable degree of independent analysis and approach.
(highlight added)

Well – it turns out that the Board intends to disregard and ignore virtually all of the substantive comments regarding:
      1.     the mandatory nature of the tariffs,
2.     the retroactive application of the tariffs,
3.     the structure of the royalties (i.e. FTE vs transactional) and
4.     the scope of acts covered by the tariffs
and presumably many other important submissions from these 11 submissions. It should be noted that these 11 submissions came from very sophisticated parties who responded to the Board’s invitation in good faith and spent a lot of time, resources and expense to do so. Here’s the Board’s Notice dated April 24, 2019 which I reproduce here in full because the Board has apparently not even seen fit to send it to those 11 “affected persons” who went to the trouble of responding to the Board’s invitation.
  
April 24, 2019
[CB-CDA 2019-021]
NOTICE OF THE BOARD
File: Access Copyright – Post-Secondary Educational Institutions (2011-2013
and 2014-2017)

Pursuant to Notice 2019-013, the Board received comments on the draft tariffs. These were provided to the Parties on April 1, 2019. The Parties may now respond to these comments.

The Notice specified that comments are to be on “the feasibility and clarity of the terms of the tariff.” Given the breadth of issues raised by the comments, the Board notes that it is of the view that many issues go beyond “feasibility and clarity.” The Board does not intend to rely on those comments and does not expect the Parties to respond thereto. This includes comments on issues of the mandatory nature of the tariffs, the retroactive application of the tariffs, the structure of the royalties (i.e. FTE vs transactional) and the scope of acts covered by the tariffs. It is also not the case that these issues are new: they were either explicitly made an issue by the proposed tariffs, or their possibility should have been reasonably contemplated (e.g., that a certified tariff may have retroactive effect).

For greater certainty, the Board is of the view that comments made in relation to issues such as record keeping, manner of performing FTE calculations, and specific issues of wording/definitions are within the scope of comments sought by the Notice.

Additionally, while not within the scope of the Notice, the Board notes that certain comments raised the issue of previous payments made for the licensing of material during the tariff period. The Board is of the preliminary view that it does not have the evidence in this proceeding necessary to establish a mechanism in the tariffs that would adjust royalties based on other licensing activities of the user.

The Board asks the Parties to respond to the Board’s preliminary view.

Parties’ responses shall be filed with the Board by no later than Thursday, May 9, 2019.

Gilles McDougall
Secretary General

(highlight added)

It will be interesting to see how the “affected persons” whose submissions are now being ignored in whole or in part react to the above notice, if they somehow become aware of it. Here are some questions I am thinking about that do not necessarily reflect any position of any clients of mine:
      1.     Why did the Board invite submissions from “affected persons” on the “feasibility” of the tariffs – only to now ignore those submissions?
2.     Why has the Board failed to notify the “affected persons” who were invited to make submissions on the draft tariffs that their submissions will be ignored in whole or part and is only interested at this point in hearing further from “the Parties” – which technically means only Access Copyright and Sean Maguire?
3.     Did the Board create a “legitimate expectation” among “affected persons” that their submissions would be accorded fair and adequate consideration?
4.     How can the Board ignore the “retroactivity” issue – especially in the context of this proposed tariff – when “affected persons” may have to try to reconstruct information on course pack content, third party licenses, fair dealing and other considerations going back almost a decade and particularly if the tariff is “mandatory” in any way? How can the Board’s decision to ignore the retroactivity issue in this context be reasonable and how could a lengthy period of retroactivity possibly be feasible in this case?
5.     How can fundamental and even jurisdictional issues such as whether tariffs can be mandatory and to what extent, if any, they can be retroactive not go straight to the core of the “feasibility and clarity of the terms of the tariff”? Surely, if a tariff is inconsistent with the Copyright Act and several Supreme Court of Canada decisions, the “feasibility” of such a tariff would be fundamentally at issue.
Unfortunately, my optimism about new leaves being turned at the Board may have been premature. What I am seeing now looks more like withered leaves. The current situation is unprecedented in my experience with the Copyright Board – which spans more than three decades. 

And that’s not all folks. Wait for my comments on the proposed regulations regarding “Time Limits in Relation to Matters Before the Copyright Board”…

HPK

Friday, April 26, 2019

The Toronto Real Estate Board is Back in the Copyright News



An important milestone in Canadian competition and copyright law was the resounding defeat in 2017 of the Toronto Real Estate Board (TREB) in its attempt to use copyright law to control the use of some key data concerning the Toronto real estate market. See Toronto Real Estate Board v. Commissioner of Competition, 2017 FCA 236. Leave to appeal to the Supreme Court of Canada was dismissed: Toronto Real Estate Board v. Commissioner of Competition, 2014 CanLII 40510 (SCC).
Justice Nadon of the Federal Court of Appeal summarized the issues at the outset of the FCA decision
[2] TREB maintains a database of information on current and previously available property listings in the GTA. TREB makes some of this information available to its members via an electronic data feed, which its members can then use to populate their websites. However, some data available in the database is not distributed via the data feed, and can only be viewed and distributed through more traditional channels. The Commissioner of Competition says this disadvantages innovative brokers who would prefer to establish virtual offices, resulting in a substantial prevention or lessening of competition in violation of subsection 79(1) of the Competition Act, R.S.C. 1985, c. C-34 (Competition Act). TREB says that the restrictions do not have the effect of substantially preventing or lessening competition. Furthermore, TREB claims the restrictions are due to privacy concerns and that its brokers’ clients have not consented to such disclosure of their information. TREB also claims a copyright interest in the database it has compiled, and that under subsection 79(5) of the Competition Act, the assertion of an intellectual property right cannot be an anti-competitive act.

[3] For the reasons that follow, we would dismiss the appeal.

It seems, however, that TREB hasn’t given up trying to control the use of information from its database. It has recently obtained a consent order against a business called MongoHouse.com, presumably the entity behind this website.  

TREB has issued a press release dated April 17, 2019 that states that “The Court has affirmed TREB’s right to protect its proprietary and copyright information and stop any unlawful attempts to sell or monetize TREB MLS® data.” This has been picked up to some extent by main stream media, e.g. here.

Consent orders are not binding precedent and are often a practical conclusion to an unsuccessful encounter by a David with a Goliath. The consent order in this instance reads as follows:
1. It is hereby ordered and declared that as the owner of the TREB MULTIPLE
LISTING SERVICE (“TREB MLS®”) and the TREB MLS® Database, TREB is the
owner of the copyrights associated therewith, pursuant to the Copyright Act, RSC
1985, c C-42 (the “Act”). It is acknowledged in relation to this declaration that the
MLS® logo is a registered trademark of the Canadian Real Estate Association
(“CREA”) and is used under license by TREB in association with the TREB MLS®.
2. It is hereby ordered and declared that the unauthorized copying, data scraping,
downloading, display, distribution, access to make available for distribution,
streaming for public display any TREB MLS® data is a breach of TREB’s
proprietary rights and copyrights associated with the TREB MLS®.
3. It is hereby ordered and declared that any access to the TREB MLS® other than as
authorized by TREB using any means to avoid, bypass, deactivate, impair, or to
circumvent in any manner a technological protection measure (“TPMs”) is a breach
of Section 41 of the Act and is an infringement of TREB’s rights.
Page: 3
4. A permanent injunction is hereby granted against the Mongohouse Defendants
restraining each of them, their officers, directors, employees, agents, assigns,
servants, or any person acting under their instructions, from:
a) accessing, copying, data scraping, downloading, displaying, distributing,
accessing to make available for distribution, streaming for public display any
TREB MLS® data or information, unless expressly authorized in writing by
TREB;
b) using any method to avoid, bypass, remove, deactivate, impair or circumvent any
TPMs put in place to protect or limit access to the TREB MLS® system and data;
c) from operating, conducting, or having any involvement in or providing or offering
means to access the TREB MLS® system, or assisting in the collection or display
of the TREB MLS® data, unless expressly authorized in writing by TREB;
d) from maintaining, operating, implementing, marketing, or having any
involvement with any business or enterprise used in any manner or form for the
purpose of providing or offering a means to access the TREB MLS® system via
any means or method, including any internet based technology, without the
express written permission of TREB.
5. The action is otherwise hereby dismissed on a without costs basis and the
Counterclaim is hereby dismissed on a without costs basis.
(highlight added)

It is far from clear how this order squares with the very clear reasoning of the FCA in the reported decision cited above that concludes, inter alia:

[194] The Tribunal considered a number of criteria relevant to the determination of originality (paragraphs 737 - 738 and 740 - 745). Those included the process of data entry and its “almost instantaneous” appearance in the database. It found that “TREB’s specific compilation of data from real estate listings amounts to a mechanical exercise” (TR at para. 740). We find, on these facts, that the originality threshold was not met. (emphasis and underline added)

Even if it could be argued the FCA’s decision with respect to copyright was technically obiter dicta in light of its findings under the Competition Act, the FCA’s reasons regarding copyright are very clear and detailed (see paras. 176-196) and were meant to have an effect.

It will be interesting to see whether the Competition Bureau follows up on what appears to be a result that may be inconsistent with the Commissioner’s clear victory in the Federal Court of Appeal.

HPK

PS: HT to Alan Macek and Graham Honsa.