Friday, January 13, 2017

Copyright Reform in Canada – the 2017 Section 92 Review

We can look forward to a lot of lawyering and lobbying devoted to copyright in Canada in 2017.
In the meantime, on the litigation front, we are awaiting important judgments in several cases, including the following that have been heard with the decision pending:
  • We can probably expect a decision sooner rather than later from the Federal Court in Phase I of the Access Copyright v. York U litigation. Indeed, the decision could come any time now, since final arguments were made June 22 - 24, 2016 and the Federal Court usually renders judgments within six months or less. The decision will likely deal with whether the "interim tariff" that is the basis of the litigation was "mandatory" and York's fair dealing guidelines. These were the key "Phase I" issues.
  • We can expect a decision in RE:SOUND v. CANADIAN ASSOCIATION OF BROADCASTERS ET AL, on judicial review from the Copyright Board, which was heard by the Federal Court of Appeal (“FCA”) on February 24, 2016. The long delay is unusual for a Court that usually renders decisions in a few weeks and normally less than six months.
  • We can expect a decision from the Federal Court of Appeal in the judicial review of the AC K-12 decision from the Copyright Board, which was heard on November 22, 2016. Likewise, there will very likely be a decision from the Federal Court of Appeal in the judicial review of the AC Provincial Government tariff, which was heard on June 20, 2016, in which fair dealing was a major issue. Although these cases were heard by different panels on different dates, there are some common issues and the decisions may very well come down together and will presumably be consistent.
  • At some point, there will be a decision from the Copyright Board in the AC Post-Secondary tariff case, from which the interim tariff that gave rise to the York University litigation arose. This case, which began in 2010, was finally heard by the Copyright Board in January of 2016. For all practical purposes, it was a default proceeding. The Copyright Board “ordinarily” and, indeed, often takes two years or more to render decisions – a delay that is unusual by any measure. So, a decision in 2017 – while certainly reasonably to be expected – cannot be assured unless the new Chairman is able to change the way the Board has worked for very many years.
  • Other decisions under advisement at the Copyright Board involve retransmission and online music services, including the long outstanding ruling on whether there is now a new “making available right” and, if so, how tariffs will be affected.
On the lobbying front, we will have the Section 92 Review. It is worth noting that there is now a different review mechanism in place, compared with the five-year review established in 1997 – which eventually resulted in new legislation 15 years later.
Review of Act
92 Five years after the day on which this section comes into force and at the end of each subsequent period of five years, a committee of the Senate, of the House of Commons or of both Houses of Parliament is to be designated or established for the purpose of reviewing this Act.
  • 1997, c. 24, s. 50;
  •  2012, c. 20, s. 58.
The effective “coming into force” day for the purpose of this review is November 7, 2012 – which means that the review process need not officially begin until November 7, 2017.

Marginal note: Review of Act
  • 92 (1) Within five years after the coming into force of this section, the Minister shall cause to be laid before both Houses of Parliament a report on the provisions and operation of this Act, including any recommendations for amendments to this Act.
  • Marginal note: Reference to parliamentary committee
(2) The report stands referred to the committee of the House of Commons, or of both Houses of Parliament, that is designated or established for that purpose, which shall
o    (a) as soon as possible thereafter, review the report and undertake a comprehensive review of the provisions and operation of this Act; and
o    (b) report to the House of Commons, or to both Houses of Parliament, within one year after the laying of the report of the Minister or any further time that the House of Commons, or both Houses of Parliament, may authorize.
  • 1997, c. 24, s. 50.
(highlight added)

The main difference now is that the review process will, at least officially, be driven by Parliament rather than the Minister and officials. To what extent Ministers Bains and Joly wish to get involved at various stages here remains unknown. Will the model of the “Fresh Start” bankruptcy law process be followed? In that case, the legislation was such that “The Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act require that the Minister of Industry report to Parliament on the provisions and operation of both Acts in 2014”. That seems more like the old 1997 mechanism and less like the current mechanism. If recent events are any harbinger, the Senate Banking, Trade and Commerce Committee may be ready, willing and able to lead the way, or at least play a major role. Hopefully, a process that provides a useful and sustainable synergy between expert bureaucrats, Ministers, elected MPs, and a hopefully less partisan and more engaged Senate where long term expertise can develop will emerge from all of this.

That said, it quite possible that Ministers Bains and Joly may play a role in making suggestions to the House and Senate regarding the direction that the review might take. Since there is little doubt that the Ministers and their officials will be heavily lobbied by the usual suspects, it would be logical for the Ministers to open up the process by inviting submissions and, perhaps, holding public fora either online or in person or both, as has been done in the past. Nothing has been announced to date about how this process will unfold. We may not know more for some time – perhaps not even before the summer.

There are some wild cards that could come unexpectedly. The obvious one is that of NAFTA, where copyright could be forced onto the table. No doubt, the American content industry, through its Canadian surrogates, will push for the life + 70 windfall that they managed to get in the now moribund if not dead TPP.

The following is where we can expect the main lobbying in the next weeks and months to be focused:
The copyright content owner and collective “maximalists”, who will likely be led by the music, publishing and copyright collective sectors, will be seeking such things as:

  •          The roll back of the Supreme Court of Canada (“SCC”) rulings on fair dealing, namely CCH v LSUC, SOCAN v. Bell and Province of Alberta v. Access Copyright
  •          To repeal the explicit inclusion of “education” in s. 29 in the 2012 legislation, not that it has made any great difference given that the key SCC fair dealing rulings were all based on the previous law
  •          To impose some version of an “iPod tax” on memory and devices or even the “cloud”, or perhaps a “linking” or “snippet” or other form of “tax” on search engines and news aggregators, or some kind of general ISP “tax”
  •          To eliminate or at least raise the $5,000 cap on statutory damages for non-commercial infringement
  •          Term extension to life + 70 years – especially if NAFTA is re-opened as Trump keeps threatening
  •          Amendments to create new rights and to attempt to force the Copyright Board to eliminate what they call the “value gap”, which will become their mantra.
  •          Amendments to force incorrect interpretations of the Berne “three step test” and US jurisprudence on the “effect on the market” into Canadian domestic law

The “user” community, on the other hand, may seek such things as:
  •          Explicit “fair dealing” provisions to legitimize the circumvention of  technical protection measures (“TPMs”) in appropriate circumstances and, as Michael Geist says, “to fix the imbalance on fair dealing in the analog and digital worlds that has undermined Canadian innovation and the commitment to balance found in copyright law”
  •          Elimination of criminal offences in relation to circumvention in the absence of commercial scale activity
  •          Regulations to prohibit the use of the “notice and notice” mechanism to troll for settlement demands
  •          Provisions to prohibit the use of “reverse class actions” for copyright infringement
  •          Elimination of crown copyright in laws, statutory instruments and in any material incorporated by reference into the law.
  •          Explicit confirmation that copyright users’ fair dealing rights cannot be waived by means of contracts or otherwise.

Copyright law has, historically, not been a particularly “partisan” issue in the political sense. However, the Democrats in the USA and the Liberals in Canada have overall been more sympathetic to copyright content owners than Republicans and Conservatives respectively. The current Liberal government would do well to remember, however, that the once promising career of Sarmite Bulte, former Liberal Member of Parliament and once potential Minister of Canadian Heritage, came to quick end in 2006 in no small part as the result of revelations about her controversial relationship generally and a notorious “fundraiser” in particular involving prominent copyright industry leaders, including the still very active Graham Henderson.

Virtually all stakeholders that are affected by Copyright Board decisions are eager to see reform at the Copyright Board. I have long suggested that much, if not most, of what is needed could be done quickly by means of regulations. However, legislation may be required for more profound and long-term change.  There is general agreement that the current delays of typically four years or more to get to a hearing and a further delay of two years or more to render a decision that is inevitably retroactive by six years or more are inexplicable, unacceptable and unsustainable.  The Senate BANC Committee has taken the initiative on this front and its report of November 30, 2016 may signal in some ways how the Section 92 process will unfold.


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