CAB Gets SOCAN + NRCC radio increase sent back to CB by FCA

On October 14, 2005 the Copyright Board gave SOCAN and NRCC an increase in the tariff payable by commercial radio stations amounting to about 30% by the Board’s own estimate. The hearing had taken place in May, 2004 - about 18 months earlier.

The Canadian Association of Broadcasters (“CAB”) - which was largely responsible for the establishment of the predecessor the Board to deal with the predecessor of SOCAN about 70 years ago - was very upset, calling the decision “aberrant and unreasonable” and referring, controversially, to the Board as “renegade”.

After only one week of deliberation, the Federal Court of Appeal (“FCA”) on October 19, 2006 has granted, with costs, a judicial review application by the CAB on the basis of “the inadequacies of the Board's reasons respecting the quantification of the royalty increases attributable to both the historical undervaluation of music, and the greater efficiencies achieved by the industry through its use of music”.

The FCA declined to reverse the Board on its alleged failure to take into account the “cumulative royalty burden” resulting from the “proliferation in the number of rights holders to be compensated”. This additional burden - of course - flows from the decision of Parliament in 1997 to recognize neighbouring rights.

The decision was written by Mr. Justice John Evans, who is not a only a judge of the Federal Court of Appeal but is the co-author of the leading Canadian treatise on administrative law. He said:

[16] The Board is entitled to the greatest deference in the exercise of its discretion to set a rate and, accordingly, the discretionary decisions lying at the heart of its expertise are reviewable only for patent unreasonableness. However. it must explain the basis of its decisions in a manner that enables the Court on Judicial review to determine on the basis of the reasons, read in context, whether the decision was rationally supportable. When an administrative tribunal's decision is reviewable on a standard of reasonableness, its reasons are the central focus of a judicial review: Law Society at New Brunswick v. Ryan, [2003] 1 S.C.R. 247, 2003 see 20, at paras. 48-9, 54-55.

[17] In my view it was not sufficient in the circumstances of this case for the Board to justify its quantification of the undervaluation by merely referring to the evidence taken as a whole. It is not enough to say in effect: "We are the experts. This is the figure: trust us." The Board's reasons on this issue served neither to facilitate a meaningful judicial review, nor to provide future guidance for regulatees.
(Emphasis added)

This appears to be a victory - for at least the time being - for the CAB.
But the really interesting question is what effect this could have on the Board itself. The Board already takes considerable time - often well over a year - to render its reasons, which are invariably carefully written and which hitherto been considered close to “bullet proof” in terms of appellate deference to rate calculation, review of the evidence and the other matters in which the Board is presumed to have great expertise. Traditionally, the FCA has refused to get involved in such issues unless there is “patent unreasonableness” in the decision.

Now, however, it seems that Board must now explain in greater detail how it gets to its bottom line. And in some respects, more detailed reasoning may open up even more possibilities for judicial review. Merely referring to the often voluminous evidence filed before it is no longer going to be sufficient.

The new regime set forth by Justice Evans may also lead to the need for the Board to evaluate more critically and analyse the quality of the evidence it relies upon, and why it is being relied upon. Evidence at the Board is often less than convincing. It is sometimes hearsay by any measure and is sometimes submitted by persons whose independence as experts could be readily challengeable in a court of law because they have a close ties with the collective that retains them to testify before the Board.

Below the tip of this iceberg is the fact that Parliament has chosen to largely delegate - some might say “abdicate” - a lot of power to the Board to not only determine terms, conditions and rates of tariffs but to effectively make law from square one. This is in stark contrast to many royalty issues in the USA, which are spelled out in often gruesome detail.

At the other end of the spectrum from broad law making, the Board routinely rules on procedural matters such interrogatory disputes (the Board’s somewhat analogous procedure to discoveries - except that there is no oral examination). There are often significant disputes as to what is relevant or too burdensome. Almost invariably, the Board provides no or at most extremely brief reasons for its procedural rulings.

Justice Evan’s decision will create a dilemma for the Board. There is already criticism, that that Board often takes well over a year following a hearing to render a decision. And the lead up to the hearing is often a couple of years. And in recent years, the Board’s panels have usually consisted of only three of its five members. In a report in Lawyers Weekly, September 8, 2006, Arnold Ceballos reported that Mr. Justice Vancise, the judicial Chair of the Board, recently acknowledged in a Toronto speech that there are substantial delays. Judge Vancise reportedly stated that “If the Supreme Court of Canada can render a decision in six months I can see no reason why this Board cannot do better”.

The Judge certainly and commendably seems to be trying to help to move things along. Of course, it’s not easy to compare statistics here. It’s an interesting question as to whether the Supreme Court of Canada is the most appropriate proxy for a benchmark for pendency of decisions . But that is a subject for discussion elsewhere. The immediate question is whether the need for more detailed decisions result in even longer delays in the release of decisions at the Copyright Board?

It will be interesting to see what the Board will do about this particular decision. It apparently has to hold another hearing - and to give more detailed reasons. There may be new evidence. The FCA said “On these issues of quantification, the Board may invite the parties to supplement the existing record with new evidence and submissions.” Will “may” mean “must”? If so, could it be virtually a de novo hearing? Also, the two members who did not hear the case before must now be involved. Will they review the previous record or should they hear the case all over again? Will this mean another three person panel or a full five member panel, which has been rare in recent years? This is all very interesting - and will undoubtedly be very costly to the parties in fees alone.

Will the Board change the result - or will it reiterate its previous decision - but with more “adequate” reasoning? Could it result in an even higher tariff? And when will we know the answer?

HK

Be Prepared

The Hong Kong progoganda perversion of the Boy Scout movement is spreading straight to LA.

According to the Washington Post:

Scouts will be instructed in the basics of copyright law and learn how to identify five types of copyrighted works and three ways copyrighted materials may be stolen.

Scouts also must choose one activity from a list that includes visiting a movie studio to see how many people can be harmed by film piracy. They also can create public service announcements urging others not to steal movies or music.

Here is the activity patch the copyright kids can earn:

Cory at boingboing is onto this, of course....

BTW, I hesitate to ask but I wonder where Captain Copyright is these days? Has he completed his therapy, probation or whatever program his creators announced a while back?

HK

Ringtones REDUX - US & Canada compared

Here’s an update of my earlier posting and a brief take on yesterday’s American decision.

The US Register of Copyrights has just rendered a very important decision on ringtones, which can be found here. The proceeding was commenced on August 1, 2006. After written submissions received on September 14, 2006 and a brief oral hearing on October 4, 2006, she yesterday issued a detailed 35 page single spaced decision with 137 footnotes, one of which refers to the recent Canadian decision on a small point. Bill Patry has a good analysis of the decision on his blog.

Here’s my quick take on a very complex and very important decision, from Canada’s standpoint:

Canadians should note:

1. Providers of ringtones in the USA may avail themselves of the compulsory license regime found in s.115 of the US Copyright Act. Canada, probably unwisely, abolished the compulsory mechanical licensing regime for musical works in 1988. Not only has the USA retained its compulsory license for mechanical reproductions - but has created a new compulsory license regime in the form of the Digital Performance Right in Sound Recordings Act of 1995, which was held to apply in most cases to the provision of ringtones as songs or portions thereof as a “digital phonorecord delivery” or “DPD”. The argument that the compulsory license applies only to a whole song and not a portion thereof was rejected. Generally speaking, it appears that there will be a one stop shop mechanism for ringtone providers to get a compulsory license for monophonic, polyphonic and mastertone ringtones, except in the presumably rare case that a ringtone comprises sufficient originality to be a “derivative work” under American law, or is an newly created composition and recording never before distributed to the public.

2. Although the actual rates are not yet determined, they will likely be MUCH lower than in Canada - where a initial 6% solution was imposed (essentially half way between SOCAN’s number and the objectors’ number). And Canada has not seen the end of ringtone tariff costs, because the 6% goes to SOCAN and the other “colleges” of rights holders will soon want their piece of the pie in addition.

Some points worthy of note:

• Not everything about US copyright law is bad. Au contraire. This decision illustrates an example of what is good about it - namely it is much more technologically neutral in the result than we see in Canada in this instance. It may turn out as well that that Congress saw more clearly into the digital future in 1995 in some respects than Canada has yet managed to do. Canada is still grappling with some of the less desirable last century aspects of US law, such as the DMCA - while ignoring what is sometimes better and more prescient about US copyright law.

• The Copyright Office has shown its ability to deliver a very learned decision very quickly. The process - which involved referral of a question of law by the Copyright Royalty Board to the Register of Copyrights - started on August 1, 2006 and resulted in the ruling of October 17, 2006 - less than three months. The lengthy delay of 14 months in the rendering of the Canadian ringtones decision - this following a two year lead up of preliminary matters - will have a ripple effect on other Board hearings, especially since the Canadian decision is now the subject of judicial review and could be overturned. To be fair, the Canadian Copyright Board heard a lot of factual evidence that was apparently not dealt with in the American proceeding which was on certain legal issues only, and has determined a rate - which also has not yet happened in the USA.

• But it should be asked whether Canada’s Copyright Board should bifurcate more often. Not every instance will turn out to be as much of a problem as Tariff 22. In fact, an early determination of some of the obvious legal questions in de novo tariffs - based upon a minimum evidentiary record if indeed needed - might save a lot of time and money overall. In some cases, tariffs have been so poorly conceived that the Board ought to find a way at the outset to say “try again next year” - and save everyone a lot of bother.

• The American case illustrates the ongoing complexities and ironies of internecine warfare in the music industry. However, Congress and the Copyright Office appear to have a good understanding of how this works. One can only smile that the RIAA also has been caught, yet again, sucking and blowing. It often deplores the concept of compulsory licenses when it is on the receiving end, but is apparently quite happy to take advantage of them when it suits its needs.

• The American decision is expected to result in falling prices to consumers in the “mobile industry” - whereas Canadian prices are clearly heading upwards due to high and layered tariffs.

• This decision illustrates by contrast that Canada has a much more costly and complex system. That seems to be the Canadian way. This renews the question about whether or not the Canadian Board can or should do something to stop this costly and complex layering of tariffs. Paying much higher tariffs overall to more parties in Canada - when most of the money will go the USA and Europe anyway - is not very obviously in Canada’s national interest, to say the least.

• Do we need another judicial commission to sort out what the bureaucrats, Parliament and the Copyright Board are all unwilling or unable to confront?

Speaking of judicial review of the Canadian ringtones decision, it’s interesting that the remaining objectors have switched counsel and filed a Notice of Application. It will be interesting to see whether they now have a change of heart and attempt to argue that the provision of ringtones is NOT a “communication by telecommunication” - a point that was inexplicably conceded before the Copyright Board. Their Notice of Application for judicial review leaves this possibility open.

This is a very important point and could affect, for example, the forthcoming SOCAN Tariff 22 hearing scheduled for April 17, 2007. It may affect the recently concluded CSI online music tariff hearing, which took place shortly after the Canadian ringtones decision was rendered. I had intended to argue that point myself at the Board, but my client MOVISO - the largest supplier of ringtones - decided to withdraw form the Canadian Copyright Board ringtone hearing, as have many other parties lately in other Board matters. I raised this point about “communication” again in my blog when the decision came out last month.

HK

CIPPIC SLIGHTLY SWEETENS SOUR SONY SETTLEMENT

My esteemed client, CIPPIC, fearlessly represented by my esteemed former Queen’s student Jason Young, appeared at the settlement hearing in Toronto yesterday and got the Court to somewhat sweeten the sour settlement reached between SONY and the class action counsel.

There will now be an undertaking by SONY to the Court in Canada, which will hopefully function in effect as an injunction. Points made by CIPPIC concerning Christine J. Prudham’s affidavit are noted by Justice Winkler on the record:

I note the objectors point relating to certain of the technical content of the affidavit of Christine Prudham, although I make no findings in this regard.

This is probably not the end of this story.

My quick take is this. CIPPIC cannot save the world from every ill every time - though it has done so surprisingly often to date in its short history. Anyone who says that the Canadian system is working and that we DON'T need protection FROM DRM is simply WRONG, as this still somewhat sour tasting settlement serves to show.

And SONY has no basis to claim any victory here. Quite the opposite. Only CIPPIC can stand proud after this settlement.

HK

SONY Settlement Unsettling?

The almost but not quite done deal of the SONY class action settlement process in Canada is raising some seriously troubling questions.

Michael Geist has managed to to do a great expose and get a copy of the infamously missing Exhibit "C" , which is a an astonishing and hitherto well hidden affidavit from Sony’s Canadian Vice President, Legal and Business Affairs, Christine J. Prudham.

That affidavit purports to explain why Canadians should be content to settle for no injunctive relief, whereas Americans will get injunctive relief against SONY’s outrageous conduct.

The affidavit contains some ludicrous arguments and statements that are clearly intended to pander to Canadian lawmakers who SONY hopes will deliver DMCA North to Canada in short order, and at the same time to get approval from a Canadian court of a settlement that is much worse even than the highly criticized US settlement.

Here is some of what she swears in her affidavit:

10. SONY BMG does not believe that the Injunctive Provisions are necessary in Canada for three reasons: (1) the Injunctive Provisions were specifically based on the US Government Inquiries, for which there is no counterpart in Canada; (2) the Injunctive Provisions may prove incompatible with Canada's international copyright obligations; and (3) the Injunctive Provisions may prove incompatible with forthcoming federal copyright legislation.

COMMENT:

The fact that there were government inquires in the USA and not in Canada does not reflect well on Canada’s Competition Bureau. However, it is no reason to avoid an injunction in Canada. There are - unfortunately - lots of things that the Bureau takes a pass on when it should jump in. That does not validate them. The US claims would be presumably have been pursued in contract, nuisance, negligence and trespass or similar causes of product liability action, and Canadian and American law are generally similar in these respects.

Canada has no international obligation to allow companies like SONY to intentionally or recklessly inflict major damage on the computers of hundreds of thousands of Canadians. I have no idea of what fantasy is on her mind.

As to incompatibility with forthcoming federal copyright legalisation, what does she know that the rest of us do not? And even if she is right, then one hopes that the legislation will rewritten or withdrawn before it hits the floor of the House of Commons. To state the obvious, there is no legislation now. A law that might or might not be passed someday is almost invariably irrelevant to a case at hand, especially when the nature of the law is supposedly unknown. If she has specific information on this supposed new legislation, then someone in Government is leaking big time.

She also says:

15. Until the contemplated new legislation has been introduced and passed, SONY BMG is of the opinion that there is a legal vacuum around TPMs in Canada.
SONY BMG Canada is unwilling to accept Injunctive Provisions that derive from the US Government Inquiries, which were based on United States legislation. To impose in Canada the Injunctive Provisions provided for in the US Settlement because of the US Government Inquiries, based on U.S. legislation, would amount to adopting in Canada the U.S. approach to the 1996 WIPO Treaties without giving the Canadian Government the opportunity decide what its policies will be on TPMs in light of the 1996 WIPO Treaties. The prevailing U.S. approach is inconsistent with Canada's historic approach to copyright, is arguably inconsistent with Canada's international copyright treaty obligations (which are not identical to the United States' obligations in that regard), and is not a valid basis for restricting the use of TPMs in Canada. Until the Canadian government resolves this issue, SONY BMG Canada is not willing to potentially prejudice itself by agreeing to the Injunctive Provisions in the Canadian Agreement.

16. Moreover, as an aspect of copyright it is arguable that the scope and protection of TPMs fall under the exclusive jurisdiction of the Federal Court pursuant to s. 20(1)(a) of the Federal Courts Act. SONY BMG is therefore concerned about conceding provincial Superior Court jurisdiction over TPMs, as would be implicit in agreeing to the Injunctive Provisions as part of a settlement of the instant class proceedings.

(Emphasis added).

COMMENT:

Maybe I’m missing her point, but the DMCA (which is apparently what she is talking about but doesn’t bother to specify) was not a problem for SONY in the USA. In fact, it their crutch and their creation. They badly want similar legislation in Canada. I hope - but will not hold my breath - that SONY’s bold apparent defence of Canadian policy sovereignty regarding the DMCA in this assertion will be used to argue against the DMCA North legislation that SONY so desperately wants in Canada.

As to lack of jurisdiction in the Courts of the Provinces to deal with TPM’s , this is utter nonsense as Michael points out. It’s an insult to the intelligence of anyone who has ever heard of the Federal Court Act or the Copyright Act. The courts of the provinces basically can do anything that the Federal Court can do in copyright except to expunge a copyright registration or to do judicial review of the Copyright Board. In fact, the Court of the Provinces can also do a whole lot more than the Federal Court, such as rule on tort and contract and other common law and consumer protection claims - which is what this case would be primarily about if were to go to trial.

It’s really a pity that nobody will likely get to cross examine Ms. Prudham on this affidavit. Unless, perhaps, if the settlement unravels...

And then, it would be interesting to see if she were to try to invoke solicitor client or litigation privilege....


TO SETTLE OR NOT TO SETTLE?

Speaking of going to trial, I sympathize with the class action lawyers here. This may be the best that they could do - and some of the them are very experienced at this. This case might not be as slam dunk as it might seem if it were to go to trial. The damages suffered by individuals could vary greatly and may be hard to quantify financially. SONY can and doubtless would try to spend any class action lawyers into the ground - and the class action lawyers might blow out their brains and time out for nothing. Their clients might - in theory - even be on the hook for costs. The disbursements could be enormous. As for the risk of suffering bad publicity, SONY clearly doesn’t mind. If SONY can support the American style of litigation against little children and dead grandmothers (which they tried but failed to pull of in Canada), and inflict the ROOTKIT in the first place, bad publicity must feel like good testosterone to such a company.

But the overall question remains - is this settlement worse than no settlement? The compensation paid to the class members who are even aware of the action will be minimal. Precisely $7.50 plus 12% [sic?] for GST and PST plus the great honour of some free SONY downloads, presumably uninfected - which presumably cost SONY nothing to provide. (It would be nice if the artists or songwriters got paid, but I doubt it - royalties are rarely paid on “free goods”).

Some deal. Michael says that the deal could be worth $25 million. But if it remains as well hidden as it has to date, and it requires too much hassle to collect the eight bucks, it will likely cost SONY next to nothing because very few people bother to take them up on this waste of time for eight bucks in change and a few freebie downloads. Ironically, they can probably get these downloads in short order for nothing in Canada by downloading them for free and DRM free via P2P courtesy of the blank media tax (oops - levy) that SONY and its colleagues in CRIA so desperately wanted just a few years ago - and the proceeds of which they still are pleased to enjoy while they last.

The cost of the deal in terms of public policy will be potentially very serious.

In particular, some officials at the Department of Canadian Heritage who ought to know better may say “This system works. We have a settlement in Canada. Nobody needs legislated protection FROM DRM and TPM.”

If this is how the system works, then we need to change the system.

As to the class action process, the NOTICE TO CLASS MEMBERS, was published, so I’m told in the last week of August in the Globe and Mail, Maclean’s Magazine, and one or two French language outlets. The deal will be presumably approved the Court in Ontario on September 21, 2006 and the deadline for objection is September 18, 2006 - next Monday.

There’s an old joke in Ottawa. If you want to keep something secret, be sure to publish it in the Canada Gazette. That’s more or less what seems to have been done here.

I’m no expert in class actions - but:

• what is the hurry and apparent rush to judgment here?
• why was this NOTICE published apparently only one time and at a time when almost nobody would have seen it (end of August)?

This may arguably be the best possible settlement under the circumstances. But that does not necessarily mean that is a good one. The question is whether it is actually better from a public policy standpoint than no settlement. With no settlement, SONY will have no basis boast to a Parliamentary Committee about how responsive it is to its victims (oops, customers) and to argue that the system works and there is no reason to worry about irresponsible deployment of DRM and TPM in the future.

I hope that this will not be the end of the story. If so, the settlement story will have an unsettling ending.

Those who wish to unsettle the settlement should visit the SONY class action settlement website and file their objection according to the instructions by Monday, September 18, 2006. That's NEXT Monday.

HK

CRIA + CMEC = COPYRIGHT + CONTROVERSY

RUMOURS OF CONTROVERSY:

The summer is almost over. And according to the polls, so too may be the honeymoon with the new Conservative government. Rumours are hot and heavy that the Conservatives will introduce a copyright bill this fall - and that it may even be a priority for this government.

If the bill lives up to the buzz, it could be a bad miscalculation for this minority government - which may have been maneuvered into unexpected controversy. The bill, as rumoured, would be extremely controversial. And nowadays, copyright and controversy can even contribute to electoral trouble – and in one infamous instance, actual defeat. The bill will probably contain two significant and specific policy thrusts that will prove especially divisive and which will exude an odour that may not be welcome as another election looms.

The first and most obviously controversial policy will be the blatantly pro-recording industry and anti-user policy of strong anticircumvention and pro DRM + TPM legislation that will help to strangle the promise of new technology and the internet as we know them and threaten the public domain, fair dealing and other users’ rights.

The other major thrust, which the Government may mistakenly believe will be seen as a balance to the anticircumvention legislation, will in fact be potentially very harmful and immediately costly. It will consist of an apparently user-friendly special educational exception for use of publicly available material on the internet. This would be a dangerous and misleading solution to a non-existent problem and could end up costing Canadians millions of dollars a year in short order - most of which will go to foreign interests.

Any policy that is intended to - or perceived as - currying favour with the current American administration may be particularly controversial. A recent SES poll has shown, in the words of Greg Weston, that:

Canadians like to see their prime ministers in the White House rose garden, but not in the presidential bedroom.

CUI BONO?

Concerning the above policies, cui bono? Who will benefit?

The anti-circumvention (i.e. pro DRM + TPM) measures will be a direct gift to the CRIA (the Canadian Recording Industry Association, a.k.a. the Canadian Recording Industry of America) - which has now lost virtually all of its important Canadian independent members and should no longer even pretend to speak for Canadian interests. It is essentially the RIAA North and might and may as well be called the CRIAA. This initiative will make the American government and the big four multinational record companies very happy. It will likely be actively opposed by some of the leading Canadian independent labels and creators, such as Barenaked Ladies, Avril Lavigne, Sarah McLachlan, Chantal Kreviazuk, and Broken Social Scene. Not to mention an enormous community of concerned and articulate consumers, academics, commercial interests and others.

The educational exception for use of “publicly available Internet materials” is the copyright “cause célèbre” of the Council of Ministers of Education, Canada (CMEC). First of all, it is completely unnecessary. We have a March 4, 2004 Supreme Court of Canada decision (CCH v. LSUC) that extends the reach of fair dealing much further than CMEC has apparently recognized. The current 2005 edition of the CMEC flagship copyright publication, Copyright Matters!, written by CMEC's Counsel, is devoid of any reference to or even apparent consideration of that landmark decision. And we have a deeply developed doctrine of “implied license” in intellectual property law that says that a user is entitled to use a product (in this case, publicly available internet materials) in the manner intended - which clearly means browsing, downloading, saving, cutting, pasting, printing and everything else we have all been doing for years in our offices, homes, classrooms, libraries etc. whenever somebody posts something interesting. That’s the way the internet works, and everyone who freely decides to post material without technical restriction knows it and probably intends it to work that way. If they don’t want their work to be used in this way, they can lock it up behind a pay wall or simply not post it. It would be very surprising if a Canadian court were to rule otherwise in respect of most of the uses that most of us – including educators, students, librarians and archivists – make of “publicly available Internet materials”.

Whatever may be the rationale for CMEC’s proposal, its potential effect is all too clear to those who see beyond the apparently “user friendly” rhetoric and the laudable goal of enhancing education and reducing costs and risks in the classroom. However, the proposal, if enacted, would almost certainly create a strong “a contrario” implication that everyone other than those in the educational community must now “pay” to use publicly available material - and Michael Geist reports that Access Copyright (a.k.a. “Excess Copyright”) is apparently trying to get Canadian Heritage to actually subsidize its work on a scheme that would help to pull this off. This initiative reminds one in many ways of the non-transparent back room activity at Canadian Heritage that led to the unsuccessful attempt to elongate the copyright term in posthumous works by up to 34 years. That was the Lucy Maud Montgomery Bill as it came to be called. When properly understood, that bill was defeated and I’m proud to have led that charge. It was another unnecessary solution in search of a problem - and the solution would have been a major blow to the public domain and benefit to publishers and, thus, Access Copyright. Once again, the educational internet exception is a gratuitous and unnecessary initiative that will benefit Access Copyright - by sacrificing a relatively small amount of potential revenue from the educational community in order to confirm Access’s “entitlement” to a potentially huge amount of revenue from the rest of Canadians outside of the CMEC umbrella.

CMEC may well have good intentions. And the Ministers no doubt genuinely believe that this is a “user friendly” initiative. But, in copyright law as in anything else, “The best laid schemes o' mice an' men gang aft aglay." And to use another cliché, “the road to hell is paved with good intentions.”

If the educators need any more legislated certainty, which is very doubtful, there are far more proven and precise formulations to give them what they want without collateral damaging consequences to the rest of Canadians. One could begin in no better place than the American legislation, which among other things, expressly recognizes that “multiple copies for classroom use” can be “fair”.

I will have more to say about the CMEC initiative in the days ahead. Michael Geist is doing an admirable job on 30 Days of DRM and has also raised several good points in opposition to the CMEC proposal. Hopefully, the CMEC plan will unravel by itself as the more independent-thinking factions of the broader educational community - such as the Canadian Library Association - see what is really going on.

COPYRIGHT AND ELECTIONS:

If this government believes that controversy over copyright is an acceptable and manageable political risk worth taking in order to court good will of the entertainment and publishing industries and the approval of the American government, it may wish to study the defeat of Sam Bulte in last January’s election. Michael has documented it in great detail and was indeed quite active in the unfolding melodrama itself. There is a wealth of publicly available internet material on the subject.

Mme Bulte’s blunt and brazen support of the same trade associations and collectives that are now working their charms on the Conservative government is widely believed to have led to the shift of a large number of votes in the once presumptively safe Liberal riding of Toronto Parkdale. Mme Bulte was the copyright establishment’s choice for the next Minister of Canadian Heritage, since the incumbent Liza Frulla from Quebec was doomed by the Gomery inquiry fallout. As every backroom person knows, a few votes can make a decisive difference in one riding and a few thousand votes can even swing an entire national election. Anyone who doesn’t believe this should ask not only Sam Bulte but Al Gore.

FALSE PREMISES:

Both of these problematic initiatives - anticircumvention and the CMEC educational exception - proceed from false premises. The strong anticircumvention proposals are almost certainly being peddled upon the false notion that Canada has some sort of obligation or “commitment” in international law to implement them. We do not. We have done nothing other than “sign” the 1996 WIPO treaties, which does not oblige us to implement or ratify them. And even if we choose to implement and ratify these treaties, the previous government’s much more modest anticircumvention provisions would have been compliant and then some. Contrary to CRIA’s misleading-as-usual propaganda, there was nothing in the recent G-8 declaration that required any IP action on the part of Canada. Anyway, the Americans are in no position to complain about non-compliance with international copyright law. They are in flagrant adjudicated violation the TRIPS agreement by eliminating royalties for musical performances in smaller business establishments - and clearly have no intention of doing anything to fix this problem. This is the most serious decided WTO case to date of violation of international copyright law.

The CMEC proposal stems from the false premise that it is necessary to avoid liability for classroom activity involving internet use. Apart from those in the CMEC camp, there are few, if any, experts who believe this to be a serious issue, especially given the current state of Canadian law as spelled out by the Supreme Court of Canada. And given Access Copyright’s costly and painful lesson in test case litigation in CCH v. LSUC, it will likely be a long time before it launches or supports another dubious law suit. CMEC’s proposal will benefit Access Copyright and nobody else - by predictably ensuring that everyone other than the educational community will have to pay more to use the internet. I predict that, if CMEC gets its way, it will take little time for Access Copyright to file a proposed tariff that will fall on ISPs, who will pass it along to internet users in the form as in the form of a tariff duly certified by the Copyright Board. Canada would likely be unique in this folly.

Ironically, the CMEC proposal could seriously erode the “large and liberal” ambit given to the research exception and to users’ rights by the Supreme Court of Canada in the CCH decision. It would be fascinating to see whatever reasoning and evidence may be the basis for this proposal and it should be of some concern that CMEC has not published any adequate analysis, as far as I know. What we do know is that there is a long paper trail of the evolution of this proposal from the Department of Canadian Heritage and the Canadian Heritage Committee, under the leadership of Sam Bulte. It is nothing if not ironic that, whatever may be its intentions, CMEC is, in the result, doing a more effective job at helping Access Copyright’s agenda than Access itself. In this instance, CMEC has – for whatever reason - come to be a wolf in sheep’s clothing.

POLITICAL RISK:

It would be surprising if this Government – assuming it to be fully and frankly briefed - were to take the risks associated with these proposals, especially while it is in a minority position. Copyright law is now the subject of lead editorials on a regular basis - e.g. just the other day in the Ottawa Citizen on September 5, 2006 right after Labour Day. It is a big political issue.

Moreover, copyright law has nothing to do with the Government’s five current priorities. To say that it has something to do with law and order would be ludicrous - unless one believes that making it easier for CRIA to sue children and dead grandmothers and to extract large settlements from ordinary families, as its American master, the RIAA, has been doing with aplomb, is somehow about law and order. This Government has lots of very serious law and order issues to keep it busy - from dealing with serial pedophiles to gun crimes to border security - not to mention the gun registry. These are promises that need to be kept.

It can only be hoped that this Government to will not proceed with the more controversial copyright proposals at this time only to respond to pressure from American interests and the American government and/or to satisfy certain domestic demands, such as the CMEC proposal, which entail harm and controversy of which the Government is likely not fully informed.

BENEFIT OF THE DOUBT?

I would like to give this Government the benefit of the doubt. Hopefully, the rumours about the bill are wrong. Or if they are right, hopefully there is still time for frank second opinions, better advice and a rewrite of the legislation - or time to simply to shelve it before introduction. There are lots of positive things that need to be done to update Canada’s copyright law in Canada’s interest - but it is likely that most of them will not be in this Bill.

I believe that this Government means well on copyright. The Conservatives’ Policy Declaration of March 19, 2005 was a very good start. Let’s see if they can live up to it. The two primarily responsible Ministers are highly qualified. Hopefully, they and their Government will not succumb to bad advice on this difficult dossier.

The ultimately irony is that this Conservative government is about to engage in profound interventionism in the marketplace of ideas, knowledge and electronic commerce by enacting extreme and unnecessary protectionist measures for the benefit of special commercial interests. Whether that is consistent with Conservative ideological roots is an interesting question. Whether the rumoured policy pillars of the proposed legislation are good for Canada is far clearer. They are not.

HK

CRTC - Hard cases make bad law...

The stories today about an attempt to get the CRTC to block access to certain anti-Semitic websites in the USA that apparently go so far as to call for killing a certain pro-active Canadian lawyer named Richard Warman give pause for concern - indeed revulsion.

We are disgusted by people who advocate such garbage. But advocating such hate and assassination is very likely illegal in the USA where these wannabe Nazi(s) in question reside.

Surely, we should look to American authorities and American ISPs to solve this problem before the CRTC makes a potentially unwarranted and unwise decision that could set a dangerous precedent in terms of censorship and extraterritoriality.

Jack Kapica deals with this in his MSM blog, and quotes me on this.

It’s always good to remember, as T.S. Elliot wrote:

The last temptation is the greatest treason,
To do the right thing for the wrong reason.

HK

Ringtones - Observations on the 6% Solution

I’ve now read the Copyright Board’s Ringtones decision of August 18, 2006. Here are some observations.

1. It’s not obvious that any or all of the various methods of delivering ringtones to customers involve a “communication to the public by telecommunication”. The remaining objectors conceded that there was a “communication by telecommunication” of a musical work - but disputed whether it was “to the public”, which is indeed an arguable point. The objectors’ strategy was to argue that the communication was not “to the public” - and, alternatively, if there was liability, the “communication” aspect is purely incidental to the reproduction right and should thus be valued accordingly.

2. But, actually, it’s not clear that the provision of ringtones to customers in the various ways that this is normally done even involves “communication” or “telecommunication” at all. There are many ways of moving music around on the internet - and it is arguably erroneous to lump them all together as “communication” or “telecommunication” or both. For example, the transmission of a digital file that must be stored and may later be performed as a musical composition is arguably not the same thing at all for copyright purposes as real time on demand streaming that cannot be stored for later retrieval and amounts, in effect, to on demand radio or webcasting.

3. The problem with this decision lies in the result that effectively conflates and perhaps even confuses the communication right with the reproduction right. This goes back to the Board’s 1999 decision in SOCAN’s Tariff 22. Whether or not this should have been challenged following the 1999 Tariff 22 decision, or whether it should have been raised in this instance is a matter upon which reasonable minds may disagree. But the result, unless reversed, will likely compound the imposition of multiple layers of payment to multiple claimants for multiple rights involving the same activity and transaction. The concept of “double payment” will likely become “triple” or more.

4. Thus, ringtone users will eventually be making payments potentially for the communication right, the performance right, and the reproduction right to potentially three categories of claimants who sometimes wear multiple hats - composers/authors and their publishers, record producers and performers. The same will hold true for online music - i.e. iTunes.

5. In fact the Board itself even seems to hint in para. 12 of its decision that SOCAN could file a tariff for the “performance in public” of a ringtones, which would compound the multi layering problem to a new level, i.e.

SOCAN has not filed a tariff for the performance that may occur when a ringtone is played in a public setting. (Emphasis added)

6. The Board does more than hint in paragraph 7. It virtually lays down the red carpet for the recording industry to come and claim their share of the pie in respect of master tones (i.e. recorded performances).

7. Is this what Parliament intended? One would hope not. This would be the antithesis of efficiency and even the music industry has mixed feelings about it - witness the opposition even of CRIA to SOCAN in this hearing and to the music publishers in the CSI hearing on online music starting on September 6, 2006.

8. Even the Copyright Board cannot make the internet cash pie expand forever, and the current and future internecine battles in the music industry are mostly about how large the pie can grow and how it will divided before the growth boom finally gets corrected.

9. Note that composers and authors have always been paid for ringtones obtained though Canadian wireless providers or any other “authorized” sources, and access is tightly controlled in Canada. The essence of the transaction involves a reproduction - which has already been taken into account in the “behind the scenes” licensing. The question is how many more times and to how many more parties is the Copyright Board going to allow payments to be made? SOCAN doesn’t control reproduction rights here. But it represents the same composers, authors and publishers who do. If the Copyright Board is correctly interpreting the law, is Parliament going to stand by and let this multiple payment game continue?

10. This would not surprise me. The policy of Canadian Heritage is to support collectives in a variety of ways, including subsidies and legislation that creates new rights and the possibility of new tariffs and ever increasing revenues. Many of these officials probably see the prospect of multiple payments to multiple collectives for the same transaction as a good thing. Collectives do indeed serve an essential function - if not encouraged to excess. But the danger of the Canadian Heritage approach is that it appears to exemplify the old fallacy that that, if copyright is good, more of it must be even better. Lest we forget, we are dealing with the collective exercise of monopoly rights.

11. It was exactly this type of multiple payment problem arising from then new technology (“talking pictures”) that led Parliament back in the 1930's to put the brakes on SOCAN’s predecessor by establishing the predecessor of the Copyright Board.

12. The result of this decision is another blow to the concept of technological neutrality, as some would define it. Why should the efficient transfer of a file over the internet trigger copyright liability for “communication” by “telecommunication” when the provision of the same file by much less efficient physical means (e.g. sending a CD by snail mail) does not? Quite apart from the spectre of multiple payments and layering, this amount to a tax on efficiency. It could also spread to other businesses, even beyond the music business. If the Board is right, then it would presumably follow that e-books involve the “communication” of literary works. But I shouldn’t give Access Copyright ideas.

13. There are no “appeals” from the Copyright Board. Judicial review is available in principle, but the Federal Court of Appeal almost never gets involved in overturning matters that relate to facts or rate calculation, although a major effort is underway to reverse the Board’s recent large and controversial hike in the commercial radio tariff. Where the issue is purely one of law, the Court of Appeal holds the Board to a simple “correctness” standard - which is the lowest threshold for review. But very often, the issue is or is argued to be one of mixed fact and law and the Court of Appeal will then tend to defer to the Board.

14. The problem on judicial review here, if it is sought, may be that certain issues that might have been raised weren’t raised, and that the Court of Appeal may regard the issues already on record, in any event, as mixed questions of fact and law - thereby giving more deference to the Board’s reasoning.

15. On the communication point, it strikes me that the Board hung its hat mainly on one word - the word “might” - from an obiter dicta passage in the Supreme Court of Canada’s decision in CCH v. LSUC. In that passage, Chief Justice McLachlin said that:

I agree with these conclusions. The fax transmission of a single copy to a single individual is not a communication to the public. This said, a series of repeated fax transmissions of the same work to numerous different recipients might constitute communication to the public in infringement of copyright. However, there was no evidence of this type of transmission having occurred in this case.

(Emphasis added)

16. The Supreme Court was not concerned in that case with the niceties of the various architectural permutations of how things happen on the internet, and the Copyright Board appears not to have delved too deeply even in this instance into how ringtones find their way from a composers’ pen to the intrusive and usually distorted cacophony that we too often hear during quite meditative moments at the opera or in funeral parlours.

17. Moreover, a fax “transmission” - note that the Chief Justice does not necessarily equate the word “transmission” with the word “communication” - results immediately in something that is directly readable by the recipient. The transmission of a ringtone file does not immediately result in the conveying of any information - much less music - to any person. It must get properly loaded into the handset, paid for, selected, and is later activated only when the cell phone “rings”.

18. Nor, with respect, should the Copyright Board put too much reliance on paragraph 42 of the SOCAN v. CAIP decision in which Justice Binnie agreed with the Board that “a telecommunication occurs when the music is transmitted from the host server to the end user.” There is a potentially big difference between “the music” being “transmitted” and a file being copied that only later can be heard as music when it is played on a device. This may sound picky and even akin to sophistry - but that’s the nature of history of copyright law, which has always focussed on legal and technological niceties.

19. It appears that the objectors may have indirectly broached the “communication” point indirectly by arguing that the Board was really seeking to impose a “making available” right - which is required by the 1996 WIPO WCT treaty. But - as everyone knows - Canada has notably NOT YET ratified this treaty. And even if Canada does, the scope of the “making available” right is very uncertain and Canada would be wise to implement it in the most narrow and careful possible fashion. Ironically, the cursory 1998 analysis by Johanne Daniel and Lesley Ellen Harris, upon which the government relied for so long, concluded, without any stated reasoning, that Canada already complied with the WIPO WCT treaty in respect of the required “communication right” that included “a making available” right for composers and authors. The debate about whether Canada does or does not already have a “making available” right evidently is far from over. Some will see this decision as effectively confirming that we do, even if the Board says that we don’t.

20. The rate calculation issue will be even harder to review - the Federal Court of Appeal is very reluctant to interfere with the fact finding/evidentiary aspect of any tribunal’s work. Much of the evidence was treated as confidential - which may be just fine for the parties, including interests not present, although this leaves the public very much in the dark. Consider the expurgated final conclusion, which will cause considerable frustration to anyone trying to understand what the Board was trying to say here:

J. Ability to Pay[127] The Canadian ringtone market has grown very quickly in recent years. Mr. Sone estimated the revenues generated by ringtone retail sales in2004 to be over $15 million, and predicted that revenues might reach $30 million in 2006. In addition, the costs associated with the production and sale of ringtones seem to be quite low. Those figures, which were not challenged by the objectors, are indications of a financially sound industry. Moreover, the rate we have set is low enough not to lead to XXXXXXXXXXXXXXXXXXX in the ringtone market. In other words, larger than the XXXXXXXXXXXXXXXXXXXXX amount of the royalties that will actually be paid. There should therefore be no consequence on market prices.

(Footnote omitted)

XXX = expurgated by the Board

21. This is a highly unusual way to conclude a decision of this importance that will set the stage for much to come in the future. Look at the actual decision - it at least indicates the amount of space of the expurgated portions.

22. Interestingly, the rate arrived at by the Board after 14 months of consideration ends up being effectively the average of the rate proposed by SOCAN (10%) and the rate proposed by the objectors (1.5%). The exact arithmetic average would have been 5.75%. The Board ends up with 6%, although they have an admittedly more complex way of getting to that conclusion.

23. It is difficult to guess whether there will be judicial review. We’ll know by September 18, 2006. Depending on how one reads between the lines, so to speak, of the final paragraph, the 6% solution may not cause immediate serious pain to any of the remaining objectors. The Board seems confident that “There should therefore be no consequence on market prices.” - for reasons that must remain confidential. We shall see. That’s a lot for the Board to assume, especially when the impact of the inevitable future multiple layer ringtone tariffs becomes apparent.

24. The public interest factor in this case may not be as obvious as in some other Board decisions. If kids want to spend lots of money on ringtones and buy new ones every week in order to be “cool”, that is their decision - and it may annoy their beleaguered parents who will foot the bill. Clearly, this is discretionary spending. The real public interest lies in the legal and rate making precedents that are being set here.

25. The absentee proxy for the public interest - who is mandated by law to watch out here - is the Commissioner of Competition - who has basically never become involved in Board matters, even though there are many situations where such involvement might may be warranted. Moreover, the Board itself could and arguably should look out more for the public interest and play a more pro-active inquisitorial role. Instead, it treats most proceedings as adversarial. In the result, the administrative law process is often more adversarial than actual litigation.

26. If there is no attempt at judicial review, it may be because there is no immediate and direct cost/benefit advantage to any of the objector parties. If so, this will not be the first time that the public interest has been left behind by a simple cost/benefit analysis by the objectors and the unwillingness of the Board or the Commissioner of Competition to fully pursue their roles in the guardianship of the public interest.

27. The real danger is that this ruling on communication to the public by telecommunication will serve as a springboard - both legally and in terms of a quantitative proxy - for the forthcoming attempts by SOCAN and the music publishers and eventually others to add large amounts to the cost of online music obtained from iTunes, and other internet music modes, etc. The current 6% solution is far from a "low" rate. Given the size of the ringtone industry, it will be a lot of money and an important precedent and building block in other files to come.

28. It is not known why it took the Board 14 months to render this decision. Meanwhile, the CMRRA/SODRAC (“CSI”) attempt to add 15% to the cost of online music is about to start hearings on September 6, 2006 and will hopefully confront some of the “double payment” issues that are now looming larger than ever. That hearing is based upon the reproduction right. The SOCAN attempt to ratchet up the price of paid downloads by 25% based upon the allegedly applicable communication right is lurching along at full speed - albeit with several notable drop outs - including clients of mine once again. The SOCAN hearing in particular stands to be profoundly effected if there is successful judicial review of the current decision.

29. Finally, it’s frankly disappointing that the full Board did not hear this case. We had the benefit of the Chairman’s presence (he is a Court of Appeal judge from Saskatchewan). However, two of the most experienced Board members did not sit on this matter, which is potentially one of the most important that the Board has heard in a very long time.

HK

Ringtones and the Copyright Board's 6% solution

Fourteen months after its hearing of the inaugural “ringtones” tariff filed by SOCAN, and based upon a lengthy interrogatory process that began in 2003 and during which a major party (that happened to be my client) withdrew, a three member panel, including the Chair, of the five person Copyright Board has certified SOCAN’s Tariff 24 for Ringtones at a base rate of 6 per cent of the price paid by the subscriber for the ringtone, net of any network usage fees with a minimum of $0.06.

This tariff was strenuously resisted on several grounds, the most important of which was that the objectors believed that there was no legal liability. It was argued that the mechanism for selling ring tones was functionally no different than the delivery of a CD containing the ringtone file to the consumer - and that it was thus not a communication “to the public”, i.e. there is no “tapping into” on ongoing performance.

As I post, the reasons have finally appeared online.

An update will follow. This decision will be very important in several other pending matters.

We will try to assess whether this is a 6% solution or the beginning of more judicial review and controversy, with significant impact well beyond your cellular telephone bill.

HK

MY SONY (tm) STORY

Last year, SONY visited the Rootkit DRM fiasco upon consumers of many of its CDs. This allowed various very serious and even lethal computer infections - and was very hard to get rid of.

The RIAA and CRIA (both of which count SONY as a major big four member) want Canadian anti-circumvention legislation modelled after American law to protect SONY’s right to continue to deploy DRM and prevent circumvention of said DRM. The legislation that is being sought and which rumour says we will likely soon see may actually make it illegal to circumvent such affliction in the future. Technically, that is the case now in the USA. Just because nobody has been yet sued yet, never say “never”. The RIAA is suing dead grandmothers for copyright infringement.

This year, certain SONY laptop lithium batteries cause certain Dell laptops (that haven't succumbed to the Rootkit infection) to engage in spontaneous computer combustion.

Hopefully, this is just a catastrophic corporate coincidence. Whatever the reason, it's bound to "heat up" the market. Hopefully, SONY (and the RIAA and CRIA) won’t be seeking legislation to prevent consumers and firefighters from extinguishing computer fires caused by systems with “flaming”, "blazing" or “incendiary” performance. ;-)

These two innovative developments - Rootkit + Blazing Batteries - have certainly generated a lot of free publicity for SONY. This makes it nothing if not ironic that that SONY has applied to register the trade-mark LIKE NO OTHER for wares and services that include, you guessed it, compact discs and batteries. No, I’m not making this up. See Canadian TM application #1232337

Should SONY and its trade associations, RIAA/CRIA, be determining the future of Canadian copyright law?

CAVEAT EMPTOR.

CAVEAT LEGISLATOR.

HK

Captain Copyright - Confusion, Confession or Confrontation?

Captain Copyright is asking for your help. In the course of an unusual and somewhat apologetic and confessional "statement" that sends mixed signals, his sponsor, Access Copyright (“AC”), says:

We have already secured a number of subject matter experts and educators to serve on an advisory panel to review and revise the existing Captain Copyright materials, as well as assist with the creation of new materials focusing on topics such as the Creative Commons, fair dealing, and the public domain. One organization, the Canadian Library Association, has, unfortunately, declined our invitation to work with us on making these improvements and has chosen instead to publicly condemn the site. Access Copyright has nothing but respect for the CLA and its members, so we are saddened that the CLA has chosen not to work with us on improving the site and materials for educators.

I frankly think that CLA is wise to stay outside the tent and to be fully free to openly criticize. I and many others have said that Captain Copyright has no place in our Canadian class rooms. I highly doubt that he would be allowed by his sponsor to teach a truly balanced and informative view of Canadian copyright law, as I suggested the other day, such as explaining the concept of “users’ rights” as confirmed by the Supreme Court of Canada’s decision in CCH v. LSUC and how users’ rights enable students and teachers to use material for free and without permission in a potentially very broad range of circumstances. As I said the other day, “I can’t imagine how a consortium of Coca Cola, Pepsi, MacDonald’s, Wendy’s and KFC would be allowed to develop a “Captain Nutrition” or “Dr. Diet” program for Canadian schools that would be allowed in the classroom.”

Not having been invited to participate in this “advisory panel”, I don’t know what the express or more likely implied terms and conditions of such participation would be. But such participation would probably muzzle or co-opt the participants to at least some extent - and perhaps that’s why CLA has wisely refrained. Hopefully, the rest of the “Copyright Forum” - which includes the CLA and a who’s who of the Canadian library, archive, museum and educator establishment which somehow seem to take their lead from the Council of Ministers of Education, Canada (“CMEC”), will agree with the CLA’s approach.

Michael has reported that AC is in the lineup of copyright lobbyists asking for a handout from Canadian Heritage. Could it be to help fund the Captain’s quest for retroactive vindication by way of a legal opinion concerning his incredible linking policy - discussed here in its original form? Even currently, the policy says that:

Permission is expressly granted to any person who wishes to place a link in his or her own website to www.accesscopyright.ca or any of its pages with the following exception: permission to link is explicitly withheld from any website the contents of which may, in the opinion of the Access Copyright, be damaging or cause harm to the reputation of Access Copyright. Specifically, permission to link is explicitly withheld from sites featuring pornographic, racist or homophobic content. If you link to or otherwise include www.captaincopyright.ca on your website, please let us know.

AC has actually retained a law firm to advise on this. AC says that:

We are also saddened by the misconceptions that have been perpetuated regarding our web linking policy. We want to be absolutely clear that is was never the purpose of the policy to limit debate regarding copyright or criticism of Access Copyright. The purpose of the policy was to protect children from inappropriate content by restricting the types of sites that could link to the Captain Copyright materials. While we have seen similar language in, for example, the policies of school boards, we acknowledge that it was not clear in this case, so we have hired a law firm with expertise in this area to review and revise the policy.

Well, its rather basic that that the World Wide Web is all about linking and that there is simply no legal basis for AC to stop anyone - not even a pornographer or a hate monger - from non-defamatory criticism that includes a direct link to www.captaincopyright.ca It would be very interesting to see any legal opinion that suggests otherwise.

Anyway, the bottom line is that kids won’t likely find their way to www.captaincopyright.ca from a porn or hate site, or even from this site or Michael’s site or the many other critical and satirical sites. The danger is that they will find their way there from a gullible school board or other credible educational entity more concerned with “Copyright Correctness” than in teaching their students and encouraging innovative research and activity in the class room. Our schools, colleges and universities should be more striving to take full advantage of the internet and every other tool available in this competitive world of 2006. It is not their job to be copyright security guards.

At least on educational authority has already issued an advisory against using www.captaincopyright.ca The province of Manitoba quite properly points out that “The content on the site is selective and misrepresents what students and teachers may do without paying copyright royalties or asking for permission from the copyright owner. Critical information of benefit to students, teachers, and school boards is omitted.”

This is a positive sign in the educational community. Unfortunately, however, the same advisory also alternatively points the reader to Wanda Noel's Copyright Matters!, a booklet published by CMEC, a publication that is also very problematic in its own way, mainly by being excessively cautious, as I have discussed before. Not unlike Captain Copyright, Copyright Matters! seems much more directed at what teachers and students cannot do than what they can. Although Copyright Matters! was published the year after the Supreme Court’s 2004 decision in CCH v. LSUC, it inexplicably fails to mention or apparently take that landmark decision into account.

So - is Captain Copyright confessing to his sins and preparing for his own demise? Apparently, not likely. Or is Captain Copyright confronting his critics and preparing his next attack on the enemies and violators of copyright lurking in our schools and on the internet?

It's all a bit confusing - and dangerously distacting from the rumours of the impending maximalist legislation that the Captain will likley love.

HK

SFU Snafu

I was alerted recently to an outrageous example of what I call “Copyright Correctness” - or “respect for copyright” gone mad.

This concerns Simon Fraser University (“SFU”).

According to a publication by the SFU “Thesis Office”, written permission is required from the copyright owner for the author of any thesis to include more than "500 words or 2%" of any work or any “Tables, figures, photos and all forms of images obtained from any copyrighted source, including websites, professor’s lecture notes, or any material provided directly by the copyright holder.”

The rule about "500 words" is said to be a "University rule". The 2% requirement in the context of "Reproduction of Substantive [sic] portions" is said to be "lawyer recommended". In any case, the two criteria appear to be mandatory. It's not clear whether we are talking about the greater or lesser of "500 words or 2%" in any given instance. 2% of an op ed piece could be dozen words, or three or four words or less from a letter to the editor or a poem or an encyclopedia entry. On the ohter hand, 500 words could be only a couple of paragraphs of a 1,000 page book.

These categorical requirements are frankly nonsense. There is nothing in Canadian law to support or require them. This is especially odd considering that the document is dated October 13, 2004 - more than seven months AFTER the March 4, 2004 Supreme Court of Canada's CCH v. LSUC decision, of which SFU is apparently oblivious - as is the Copyright Matters! publication from CMEC published in 2005.

The document contains the seriously misleading statement that:

“There is no special exemption for scholarly non-profit use under Canadian law.”

"Research or private study", anyone? CCH v. LSUC, anyone? "Users' rights", ayone?

Besides, it will frequently be necessary to quote more than 500 words from one source, not to mention tables and figures.

I understand that non-compliance with these rules can result in a student's thesis being "denied".

The document is apparently based upon an earlier 1997 SFU publication. And the absurdity is compounded in a more recent iteration from July 18, 2006 which contains the astounding proposition that:

What is not permitted…

- Using material the use of which is expressly prohibited by a use or copyright statement accompanying the material in published website
or printed format.
- For example, Microsoft Inc expressly prohibits using any photo of Bill Gates without permission in advance for each use.

Microsoft can no more legally control the non-commercial use of Bill Gates' image than King Canute could stop the tide. So why does SFU take it upon itself to try to do so?

The only source referred to for “more information about Canadian copyright requirements” is Lesley Ellen Harris’s 2001 book, which is described as "the indispensable guide for publishers, web professionals, writers, artists, filmmakers, teachers, librarians, archivists, curators, lawyers and business people." Even at the time this book was published in 2001, its use required great caution. For example, it contained some serious errors of omission in its discussion on fair dealing. On page 128, the book failed to note that the trial decision in Allen v. Toronto Star had been reversed on appeal in 1997. In the important appeal decision, the Ontario Divisional Court allowed, as fair dealing, the use by the Toronto Star of a photograph of the entire cover of the November 1985 issue of Saturday Night, which included the plaintiff's photograph of Sheila Copps on a motorcycple on the basis of the nature and purpose of the use in question. Ms. Harris's discussion of parody on page 129 of her book omitted some key case law, including the very important leading case of Michelin v. C.A.W. that had been rendered by the Federal Court about five years before the 2001 edition of her book was published.

A much more helpful source and reference would have been David Vaver’s quite readable book (for librarians and lawyers alike) published in 2000 - which is actually seriously concerned with “users’ rights” and had a whole chapter so entitled four years before the Supreme Court of Canada’s decision in CCH v. LSUC. Vaver’s book is also very reliable, and has been cited several times by the Courts - including the Supreme Court of Canada in the CCH decision.

There is a disconnect at SFU. A university should be encouraging students to do research, not scaring the hell out of them, and threatening to deny their right to graduation if they dare use more than 500 words from one source. The university should not force or encourage their students to waste any time getting unnecessary permissions. On the point of getting permission, the document provides such helpful thoughts as:

Express appreciation for the originator’s work, when honestly felt
“Flattery will get you everywhere”, but keep it dignified.
You can make somebody’s day.

Finally, ironically, this document contains a copyright notice, which might come as a surprise to the management at SFU, by whom the author is presumably employed.

© 2004 Penny Simpson Assistant for Theses, SFU Library

Normally, the employer of a work created by an employee in the course of her employment is the first owner of copyright in the work.

I hope I haven’t quoted more than 500 words or 2% of Ms. Simpson’s work. ;-)

If I have, perhaps I should confess to Captain Copyright.

HK

PS - One eternally vigilant reader has already pointed out UBC has virtually the same policy and language.

Is there something in the air or water out there?

BTW, both the SFU and UBC web pages seriously misuse the term "public domain", i.e.

Copyright protection applies regardless of whether the work in question is published (such as a book or an annual report) or not (such as an internal company memo), and whether someone has put it out in the public domain (such as on a web site) or not.

I haven't done a precise word count but, by the SFU criteria, I wonder whether the UBC web page is infringing the SFU (or, should I say. Ms. Simpson's) work? ;-)

If anyone knows of any similar categorical rules elsewhere at Canadian or other universities or learning institutions, please let me know.

Developing...

The University of Calgary Conference on Ethics, Creativity and Copyright

These are some notes from the University of Calgary’s conference on Ethics, Creativity and Copyright held in Calgary and Banff on August 3-5, 2006. Here are just a few thoughts. I hope to follow up with some others.

1. This was an well organized, innovative, well conceived and well-balanced copyright conference. The balanced aspect is something we too often don’t see in Canadian copyright conferences these days. There was a rich variety of presenters representing several real creators, collectives, users, academics, and the library and archive community who put forward views that some in the copyright establishment might prefer to suppress. The collectives were represented by Access Copyright and SOCAN. I understand that CRIA, the well known trade association, was invited but did not participate. Kudos to the organizers, Profs. Greg Hagen of the Faculty of Law and Clem Martini of the Department of Drama.

2. Justice Roger Hughes of the Federal Court was present and very active as a moderator and vigorous audience participant. He has an extraordinarily prolific and important record as a litigator and author in Canadian IP law - and his recent appointment to the bench was a notable event in the history of the Federal Court of Canada.

3. There were several Canadian, American, Australian and other academics, including Dennis Karjala from Arizona - the eloquent, outspoken and early critic of the term extension movement in the USA.

4. There was a considerable amount of criticism of the ethics of the copyright establishment in Canada and elsewhere. There was much discussion of cases that raised ethical issues, most notably CCH v. LSUC and its important potential, if properly understood, for a new era in Canadian copyright. There was also quite a lot of discussion about the Michelin case and much desire for a explicit parody and satire exception.

5. All of this was all the more remarkable considering that corporate sponsor of the event was Access Copyright ( “AC”). Maureen Cavan and Roanie Levy from AC were both present and very gracious. I have often criticized AC and, on occasion, fought hard with them on behalf of clients. But, to be fair, AC has come a long way. I highly doubt that AC will repeat such mistakes as its involvement in the shameful criminal prosecution of Laurier Office Mart back in 1994-1995, before the current senior management was in place. And, based upon what Ms. Levy candidly and publicly said about AC’s hindsight regarding the CCH v. LSUC case, I am reasonably optimistic that AC will make a virtue out of necessity and be very slow to sue, instigate or support test case litigation against any legitimate library, archive, educational, museum, governmental institution, law firm or corporation any time soon.

6. AC also publicly admitted that much of the torrent of criticism concerning CaptainCopyright has been justified, that some of what the Captain says is simply wrong, and that steps are being taken to redress this. Personally, I think that the most positive step by far would be capital punishment. It’s not complicated - just hit the delete key for the website. He and his propaganda have no place in our K-12 system. I can’t imagine how a consortium of Coca Cola, Pepsi, MacDonald’s, Wendy’s and KFC would be allowed to develop a “Captain Nutrition” or “Dr. Diet” program for Canadian schools that would be allowed in the classroom. I’m not convinced that copyright law should to be discussed in K-12 classrooms any more than securities law or real estate. But if it does have any place, AC is clearly not the entity that should be allowed to provide the content.

7. And Michael Geist has just unearthed the fact that Captain Copyright other special interest entities have applied for funding, presumably under the rubric of “copyright awareness” from Canadian Heritage. There’s something quite troubling about PCH doling our taxpayer money to groups whose main mission is to create copyright propaganda, to lobby for maximalist legislation, and to do the same year after year- but that’s part of the way that Canadian Heritage keeps its constituency happy. These groups, with their sense of entitlement, represent rich and powerful corporate special interests. They are about as far removed as one can imagine from being disadvantaged or disenfranchised groups in need of a government subsidy. The Auditor General might wish to continue and intensify her examination of what goes on at PCH.

8. The Canadian Library Association - in a refreshingly blunt open letter - seems to agree that Captain Copyright has gone over the top and even suggests that the website may be illegal in Quebec on account of that province’s laws concerning advertising directed at children. An interesting thought.

9. AC could achieve much good will by killing off Captain Copyright ASAP. But if AC is unwilling to cut its losses in this way, the next best scenario would be for Captain Copyright to teach much more balanced lessons. Some of them might concern how the Supreme Court of Canada in the CCH v. LSUC recently gave broad recognition to users’ rights to copy material - even whole works in some cases - in the course of research without seeking copyright permission or making payments. And there is no categorical rule against making multiple copies.

10. True, we don’t yet know just how far the CCH v. LSUC decision will take us. But that is no reason to avoid or deny its potential. Many at the conference agreed that it is the most important Canadian copyright case in decades. Moreover, including appropriate discussion in Captain Copyright’s curriculum would be a valuable lesson in our justice system generally - i.e. just who are those impressive looking folks in red and white robes in that fabulous art deco building in Ottawa and what else do they do? This would surely be useful information to K-12 students. In my view, the Supremes’ ruling about the rights of researchers and users rights ought to be at least as applicable to school children and their teachers and students and professors in universities as it is to lawyers working on behalf of their clients. This would be a good start to the rehabilitation of Captain Copyright, if he survives this long, hot summer - which he hopefully will not.

11. Yes - AC has come a long way and admits, to its credit, that it is still not perfect (something that certain other collectives are incapable of doing). AC is more transparent than most other Canadian collectives, although its annual reports unfortunately no longer separate out various sources of revenue that would show more precisely how our tax payer dollars are being spent and whether AC has managed to get any significant corporate revenue, which would surprise me.

12. Collectives have always been controversial. AC has a particularly difficult task, since it has relatively little actual repertoire in its chain of title and appears to be more like an insurance company than a traditional collective (which doubtless is a factor in PCH’s big push for extended collective licensing). The performing rights societies have been in business in Canada and the USA for almost a century and are still controversial - even though they, at least, can lay claim to virtually all of the commercially important repertoire. Some collective activity is clearly necessary in our world. Precisely when and under what terms and conditions collectives are allowed to operate is debatable as an ongoing matter of serious and legitimate public interest and legal application. And the public interest is arguably not being adequately served. For example, the General Counsel of the Copyright Board pointed out the virtually complete absence of the Commissioner of Competition from the activities of the Copyright Board, despite the explicit mandate and role given to the Commissioner in the legislation to get involved on behalf of the “public interest”.

13. AC was born with considerable encouragement and a very generous $13,000,000 license kickoff from the Federal Government in the 1980's. This enabled CanCopy as it then was known to embark upon aggressive lobbying for even more rights and income. Their ship came home (once again) with Bill C-32 in 1997, which was a huge setback for the user community. Hopefully, AC’s earlier mistakes and excesses are in the past and the current signs of progress at AC will continue and potentially even serve as a model of sustainable collective activity in Canada. In this respect we will watch with intense interest to see how such things as the following unfold in the near future:
a. The death or, at least the conversion and rebirth, and rehabilitation of Captain Copyright
b. The prosecution of the very aggressive proposed tariff of $12 per year per K-12 kid (that’s a lot of students in Canada) and its potentially devastating precedent on post-secondary costs and whether AC will acknowledge the effect of the Supremes’ decision in CCH v. LSUC. Of course, this will depend on the manner and extent to which the Council of Ministers of Education, Canada (“CMEC”) or perhaps even the Copyright Board itself will hold AC’s feet to fire on this very important point. So far, there are no intervenors. One would have expected that the colleges and universities might have sought to intervene, since this tariff will likely be used as a springboard for enormous future demands on the post-secondary sector, which is arguably over-paying already in light of the fact that much of the current payments go to cover what is probably fair dealing - particularly in the light of CCH v. LSUC. AC has already spent about $3,000,000 on this proposed tariff - so they do mean business.
c. The involvement with Creative Commons (“CC”) in establishing a database about public domain works. Hopefully, this will result in something more than is now already available with a little search engine effort and will be a win/win for all interests. The project involves a collaboration with Larry Lessig and the Creative Commons. So far, the project is very vague in terms of specifics, deliverables and where the actual data is going to come from. But at least AC is recognizing the importance of the public domain, and hopefully this strange dalliance between AC and CC will result in the creation of something useful in the near future.
d. Whether or not AC will clearly commit itself to not seek licensing revenue from anyone for “publicly available material” on the internet - which would be an absurd and very expensive solution to a non-existent problem and a trap into which CMEC is plunging at full speed by seeking a special educational exception, thereby giving credibility to principle and likely creating liability for everyone else.

14. In any event, thanks once again to AC. Really. Their sponsorship was apparently with no strings attached. Even I was on the program. QED. This follows their quick repudiation prompted by Jack Granatstein (which I’ve bogged about before) of campaign contributions in the future to the next politician who wants to step into Sam Bulte’s ill fated fundraising shoes. These are good signs and ought to serve as lessons to certain other even richer collectives and trade associations who are much less tolerant of constructive criticism - or indeed any criticism. Much more is required - but we have to start somewhere.

HK