USA Treaty Priorities?

It's been widely reported via Reuters that:

Somalia has announced it plans to ratify a global treaty aimed at protecting children, leaving the United States as the only country outside the pact, UNICEF said on Friday.

Somalia and the United States have long been the last hold-outs to the Convention on the Rights of the Child, adopted by the United Nations General Assembly exactly 20 years ago.

The most widely ratified international human rights treaty, it declares that those under 18 years old must be protected from violence, exploitation, discrimination and neglect.

(emphasis added)

Maybe the only explanation for the US being the last holdout from this worthy sounding treaty that even Somalia will ratify is that it is just too busy protecting the obsolete business models of the RIAA and MPAA through the secret ACTA treaty process and doesn't have enough time or resources to worry about lesser priorities, such as protecting children.

HK

Longer Copyright Term and Disincentives

Here's an economics paper by Francisco Alcalá (Universidad de Murcia) and Miguel González-Maestre (Universidad de Murcia) that is getting much attention and that concludes that longer copyright terms may actually be a disincentive to new production by emerging artists.

Here's the abstract:

Abstract Promoting high-quality artistic creation requires sorting the most talented people of each generation and developing their skills. This paper takes a professional-career perspective in analyzing the determinants of artistic creation. The paper builds an overlappinggenerations model of artists with three features: (i) the number of highly talented artists in a given period is positively linked to the number of young artists starting the career in the previous period; (ii) artistic markets are superstar markets; iii) promotion expenditures play an important role in determining market shares. In this framework, the paper analyzes the consequences for high-quality artistic creation of changes in the length of the copyright term, increases in market size, and progress in some communication technologies. It is shown that increasing superstars’ returns do not always increase the expected return to starting an artistic career. As a result, in the long run, longer copyrights do not always stimulate artistic creation.

For those who actually would like to see some logic rather than lobbying on the issue of copyright as an incentive to creativity, there's also a wonderful book published in 2003 by a brilliant elder statesman of industrial economics and the economics of technological change and IP named F.M. Scherer entitled Quarter Notes and Bank Notes: The Economics of Music Composition in the Eighteenth and Nineteenth Centuries about the rise of copyright in the how copyright protection may have actually discouraged production - and apparently did in the case of Verdi, which he looks at very closely. Not that Verdi was unproductive - he just slacked off a lot as he got quite rich due to the ever increasing power of copyright.

I leave it to her fans to decide if the artistic legacy of Britney Spears, another example of a superstar who benefits from copyright , is in decline or whether the incentive theory works for her... and if there's any correlation with her royalties.

HK

Scary Friday the 13th Interview

Here's a seriously scary ill-informed interview on CTV Power Play ironically on Friday the 13th at about the 3:30 mark with with former Liberal & Tory Minister David Emerson and interviewer Tom Clark.

Somebody has misinformed Clark a lot about Canadian law - and fed him lots of property talk about "theft" and "stealing."

Tom Clark wonders why we can't bring in a law to "prevent theft" and why this is a "delicate" matter and who are the stakeholders?

Tom Clark states that "one example I was given" would be that if a container arrives in Halifax labelled "Counterfeit Louis Vuitton bags", it would be "perfectly legal" in Canada and that one can steal off the internet and sell to North Korea or words to that effect. Emerson says "That's right.."

I wonder who briefed Tom Clark.

Emerson, for his part, thinks that Canada is involved in negotiations with the US and "3 or 4" other countries to "create and IP agreement intended to be the most rigorous in the world".

Clark wonders "whether we should allow crime to continue to poke the eye of the Americans?

Emerson sounds somewhat more intelligent than Clark and even says some intelligent things about the purpose of copyright law but then was was a Minister of Industry, and Foreign Affairs and International Trade.

Sorry if I didn't transcribe with 100% accuracy. My stenographic skills are rusty.

If such a smart former Minister and such a high profile TV journalist can be so misinformed and get so much wrong in such a short interview on such a high profile subject, it's really scary - even by Friday the 13th standards.

HK

Canadian Copyright Collectives and the Copyright Board After 20 Years: Does the System Serve its Purpose?

The following is my article in somewhat more convenient form on the above subject from the Hill Times Policy Briefing on Copyright published on November 2, 2009 and available from the Hill Times website here.

**********

OTTAWA - This is the 20th anniversary year both of the Hill Times and also its neighbour across the Sparks Street Mall, Canada's Copyright Board. "The Board" is a specialized quasi-judicial tribunal located at the iconic address of 56 Sparks Street in Ottawa, one floor up from the fabled USC Canada, which was founded by Dr. Lotta Hitschmanova in 1945 as the Unitarian Service Committee of Canada.

The USC and the Copyright Board are both, ironically, involved in the redistribution of Canadians' money. However, unlike the volunteer contributions to the USC, Copyright Board tariffs have the force of law and are often referred to as "taxes". Many of these tariffs are deeply hidden but lucrative such as those on broadcasters or businesses that utilize "background music". Others are far more visible, such as the recent surprisingly costly tariff of $5.16 on every full time student in Canada's K-12 educational system outside of Quebec, which also entails a whopping additional retroactive liability of about $40 million, $16 million of which arises in Ontario. Questions will be asked about how such an expensive tariff arose and why so much money is being paid for windfall photocopying royalties and not on more productive and innovative purposes such teachers, books and computers. As is often the case, there is no such tariff in the USA.

Canadian government policy has deliberately encouraged and even subsidized this collective system on the assumption that these tariffs will actually help actual creators. If so, these tariffs would take the heat off the beleaguered subsidy system for Canadian culture. But copyright tariffs work best for those who are already commercially successful and the collectives' lawyers, consultants and managers. Much if not most tariff money leaves the country as a result of international treaty obligations. Subsidies, however, can be narrowly targeted and kept in Canada.

Canada has about 36 active collectives with annual revenues approaching $500,000,000. Contrast this with only about a half dozen counterpart collectives in the USA. Canada's Copyright Board, which has a staff of 13 plus up to five full time members, is by far the largest such organization anywhere.

There are many good things about the Canadian collective system, which has grown exponentially in the last 20 years from the previous part-time regime that existed for about five decades. This growth has, however, created some issues that need to be addressed. Here are some examples.

• The costs of Copyright Board hearings have become absurdly and unnecessarily high. This actually benefits collectives, because it drives many potential objectors away. Besides, these sole purpose collectives recover their costs from the tariff payments, which means from ordinary Canadian businesses, consumers and taxpayers who invariably have many other things to worry about besides copyright. There should be serious consideration of a cost recovery mechanism, as is found at the CRTC.

• Although there are usually only a handful or so of actual hearings each year at the Board, these usually take several years to reach fruition and the delay in issuing the decision can be 18 months or more. This pace contributes to the enormous expense of the hearings and to the very real problem of significant, lengthy and costly retroactivity, such as recently seen in the educational and background music sectors. The Board's jurisdiction to award such retroactive tariffs may be vulnerable to challenge. The "mother" of all Board hearings, SOCAN's internet Tariff 22 for music on the internet, is still unresolved after 15 years with the end nowhere near in sight.

• The lack of transparency of the collective system needs to be addressed through mandatory public filings of data disclosing such information as costs of administration, aggregate salaries, legal and consulting fees, etc. and how much is left over for actual creators. Canadians and collective members themselves also need to know the mean and average distribution per member within each collective, since that is a key indicator of the efficacy of the system. For example, the Canadian Private Copyright Collective has spent over $25 million on lawyers, consultants, experts, administration, public relations, travel etc. over the last ten years. But the average distribution to actual beneficiaries of the blank media levy is only about $160 annually and probably far less in most cases involving the actual musicians who do appear on the collective's radar. And many musicians don't. The Government needs to be able to evaluate the collective system though verifiable data and not just anecdotal "feel good" info provided by lobbyists.

• The Board needs to revisit basic legal principles of evidence. It puts far too much reliance on opinion evidence presented by supposed experts, although it usually does not formally "qualify" these experts as such. Some of these witnesses who appear regularly before the Board have close economic ties if not outright dependency on the party calling them, and may be effectively playing a management and/or advocacy role for the collective. The Board has shown great reluctance to permit any questions relating to the independence of these "experts" or going to the weight of their testimony.

• The Board should not be expected to take upon itself the job of filling what its Chairman William Vancise calls "gaps" in the legislation. Arguably, the Government has left far more to the Board than was prudent on issues such as retransmission and the blank media levy in order to avoid making tough decisions that have been taken in other countries for better or worse. The result was a far more expensive retransmission regime than was envisaged with costs passed onto Canadian cable subscribers. The basically blank regime for the blank media levy has led to an extraordinary situation in which the Federal Court of Appeal ("FCA"), which reviews the Board, has twice had to tell the Board that the legislation does not allow for a levy on digital audio recorders. This has prompted some very unusual and unusually explicit public criticism of the Court by Chairman Vancise, who described the Court's most recent ruling by Justice Karen Sharlow as "six turgid paragraphs." He describes the previous ruling by Justice Marc Noël as "obiter" and a "throw away line that has had extreme consequences, not the least of which is at least 10's of millions of dollars in royalties that have not been paid to authors, composers and performers and threatens to destroy the private copy regime." (Full disclosure - I argued successfully against the Board's view in both of these instances at the FCA).

Collective administration is essential for copyright, but it does not follow that more and more inefficient collectives and more protracted and expensive hearings are better for public policy. It was a prescient Judge James Parker who effectively created the predecessor to the current Copyright Board with his landmark 1935 report. It is time once again for a judicially led commission to solve some of the difficult problems now facing Canadian collectives and the Copyright Board that others, including the Board itself, seem unable or unwilling to confront. Otherwise, Canada's current collective system will largely benefit only a handful of lawyers, consultants and managers of collectives and fail in its purpose of rewarding actual creators and protecting the public interest.

Howard P. Knopf

Counsel

Macera & Jarzyna, LLP

Ottawa, Canada

Note: The above is based upon the author's paper for the Law Society of Upper Canada in 2008. It reflects solely his own views, and not necessarily those of any of his clients.

HK

ACTA - Certificate of Entitlement

ACTA - Time to Walk Away?

canada.com

David Gonczol, Ottawa Citizen

Here's Jamie Love in the Huffington Post on the ACTA leaks story broken by Michael Geist.

Here's The Atlantic.

Here's the New Zealand Herald.

This is going into the main stream.

If all or indeed any substantial portion of the rumours about ACTA (three strikes +, DMCA +, WIPO+, border searches of iPods, cell phone etc, for MP3s, etc.) are true, and if Canada goes along with this "agreement", then Canada will forfeit its sovereignly to determine its own IP policy. For starters, this summer's mammoth copyright consulation will have been for nothing.

So if there is substantial truth to these rumours, then Canada needs to seriously consider walking away from this secret treaty/agreement process. Maybe sooner rather than later.

We know that there is unprecedented secrecy over this process. Neither the WTO nor WIPO ever worked this way. There is no reason or justification for this. Absolutely none other than industry induced secrecy. You can be sure that the RIAA and MPAA know exactly what is going on here.

We know that Canada has very limited ability to influence the Americans. As Trudeau said, when a mouse gets in bed with an elephant, it is the mouse that needs to worry about being rolled over.

Canada has long since lost much if not most of its honest broker status in international IP and other diplomatic circles. We likely don't have the clout any more to stand up to the Americans in a negotiating room or to broker some more moderate IP arrangement. If we really think we can do that, maybe we should remain at the ACTA table for a while. But if we can't, maybe we should just walk away. And maybe sooner rather than later.

Walking away could preserve Canadian sovereignty to do what is best for Canada, which is what we really ought to care about. It might help Canada to regain international credibility and bargaining strength.

From what we have seen in the leaks to date, there is really nothing in the proposed ACTA that would benefit Canada. We do not have a serious piracy or counterfeiting problem here unless one believes the recycled and circular back-of-the-envelope “evidence” from the usual lobbyists. One has to look very hard to find fake Rolexes or pirate CDs or DVDs in Canada. I have frankly never seen this stuff in Canada. Compare mid-town Manhattan where these things are “in your face.” Claims about counterfeit medicines and health and safety issues, etc. are a smokescreen for the real agenda here, which is an ultra strong copyright and trade-marks regime, with huge “ex officio” powers given to border guards, who will be informed and educated by industry “experts.” Such ex officio action has recently resulted, for example,. in scandalous delays of perfectly legal generic AIDS drugs en route through The Netherlands to developing countries. In any case, one does not need ACTA to deal with any issues involving fake medicines or counterfeit Christmas tree decorations.

People don’t like surprise attacks on their civil liberties - and ACTA could be a very big surprise indeed, resulting in cut-offs of internet service and warrantless searches of electronic devices at the border for copyright infringement - i.e. downloaded songs and movies.

Anyone who doesn't believe that the US is serious about this should look at a recent bulletin dated August 20, 2009 from U.S. CUSTOMS AND BORDER PROTECTION CBP DIRECTIVE NO. 3340-049 which begins as follows:

PURPOSE. To provide guidance and standard operating procedures for searching, reviewing, retaining, and sharing information contained in computers, disks, drives, tapes, mobile phones and other communication devices, cameras, music and other media players, and any other electronic or digital devices, encountered by U.S. Customs and Border Protection (CBP) at the border, both inbound and outbound, to ensure compliance with customs, immigration, and other laws that CBP is authorized to enforce.

These searches are part of CBP's long-standing practice and are essential to enforcing the law at the U.S. border. Searches of electronic devices help detect evidence relating to terrorism and other national security matters, human and bulk cash smuggling, contraband, and child pornography. They can also reveal information about financial and commercial crimes, such as those relating to copyright, trademark and export control violations. Finally, searches at the border are often integral to a determination of admissibility under the immigration laws

(emphasis added)

And this is BEFORE ACTA. This US will expect this and more from other ACTA partners.

That's right. Copyright “violations” (whatever that may mean) are right up there with terrorism and child pornography. Take no comfort in promises of a “de minimis” exception policy. First of all, I'm sure that RIAA and MPAA and their Canadian branches, CRIA and CMPDA, will lobby hard to make sure that “de minimis” means some truly low number such as five or ten MP3 files or one or two movies for which the traveller can't prove “ownership” on the spot. And do we really want border guards detaining us for hours and our devices for up to days, weeks or months while they determine whether we are “de minimis” or not? And what about songs that we have legally ripped to our iPods, according to the RIAA and CRIA. from CDs that we have bought and paid for? What if the customs agent doesn't believe that we own the CDs? And don't bring any children with you on your travels. (Unless you want to leave them in the care of border officials!)

They are notorious “pirates.”

If Canada remains in this negotiation in order to try to moderate the extremists, the minimum price for so doing should be complete transparency and immediate publication of all draft texts, as has been the normal practice at the GATT, WTO, WIPO and elsewhere for decades. That is the only way that moderation can hope to be achieved. And we should still be prepared to walk away.

HK

PS - November 6, 2009: This is front page news in today's Ottawa Citizen.

Chairman Vancise on the Courts and Copyright Policy in Canada

(Copyright Board of Canada)

The Chairman of the Copyright Board, Justice William Vancise, gave what has become his traditional annual speech to the Intellectual Property Instate of Canada's summer course on copyright held at McGill University on August 11, 2009. It has now been made available online here.

He had some interesting things to say about what he believes should be addressed in the next copyright bill:

First, we have to recognize that sometimes a strange brew of copyright, ubiquitous technology and traffic control creates real privacy issues. Copyright should not be the means by which control is exercised in the private sphere. Copyright should therefore continue to focus on professionals and on the public sphere.

Second, we will have to recognize market failures where they exist. Where they do, tough choices will have to be made. In some cases, the law will have to allow uses for free and copyright owners will have to live with it. In others, it will be possible to monetize copyright uses either voluntarily or through compulsory regimes. To do so, it may become necessary to impose liability on some participants in the chain of copyright consumption who currently enjoy immunity: just as it was possible to make the case that blank CD manufacturers should pay a levy for the copies of music made by those who use their CDs, it should be possible to make the case that Internet service providers should pay a levy for their clients’ use of copyrighted works.

Third, parliament will have to be consistent in the choices it makes. It may be politically expedient to monetize the use of music on the Internet but not to monetize the use of movies. To do one without the other makes no sense. It also makes no sense to impose a private copying levy on blank CDs but not on iPods: either you impose a levy on both, or you remove it from both. The removal of both would potentially mean the end of the private copying regime. It seems to me that only if parliament shows such consistency, will it be able to convince consumers and others that the law makes some sense.

He also had frankly unusual and unusually frank comments about the Supreme Court of Canada and Federal Court of Appeal. On the former, he says:

The Supreme Court is “doing” more copyright law than Parliament. One may ask: is this the Court’s domain? Fair minded persons may disagree on this. Professor Daniel Gervais, for one, argues that in effect, things are moving so fast in the copyright world that absent parliamentary action, the court feels it necessary to fill in the gaps. I might add, this is not unusual. Courts frequently move to fill vacuums when the legislators fail to act. Two notable examples are gay rights under Human Rights legislation and abortion in the field of criminal law.

On the Federal Court of Appeal, which reviews the Copyright Board, he says:

The Supreme Court is not the only court attempting to fill perceived gaps in the Copyright Act. The Federal Court of Appeal has attempted on at least two occasions to reconcile the wording of the Act with the contemporary reality (means of consuming protected works or objects of copyright).

In 2004, the Court ruled the Board was wrong to conclude that the permanently embedded or non-removable memory, incorporated into a digital audio recorder or the device itself, was “an audio recording medium ordinarily used by individuals to copy music”.

In 2007, CPCC tried again and the Board was asked to determine whether the recorder itself was a recording medium as defined in the Act. It said yes in a long and well reasoned decision. The Federal Court of Appeal, once again on judicial review, overturned the Board. This time, the Court in six turgid paragraphs found its decision of 2004 dealt with the matter and was binding on the Board. I still wonder how the Federal Court of Appeal came to that conclusion when the question of whether the device itself was subject to a levy had not even been an issue in the previous decision and the comments of Noel J.A. were obiter and contained in what can only be called a “throw away line.” A throw away line that has had extreme consequences, not the least of which is at least 10's of millions of dollars in royalties that have not been paid to authors, composers and performers and threatens to destroy the private copy regime.

(Full disclosure - I argued successfully against the Board’s view in both of these instances at the FCA).

I highly recommend reading the entire paper. Chairman Vancise also provides very brief summations of what he sees as the essential holdings of several recent Copyright Board decisions. It is unusual for a Canadian judge or tribunal Chair to be this explicit in stating his or her views on specific cases and policy issues. The Copyright Board, which he chairs, has great oversight power over almost half a billion dollars per annum worth of copyright tariff payments in Canada. Therefore, his views require attention from everyone interested in copyright law in Canada.

HK

The Future IP Czar

A hearing will take place tomorrow at 2:00 PM to confirm the appointment of Victoria Espinel, nominated to nobody's surprise by President Obama to be his IP "Czar". This is a position created by the Bush administration under intense content industry pressure. Her job is to deal with "enforcement."

The question is not whether she is qualified. She is and will almost certainly be confirmed. The question is what she will be able to do, with all of those folks out there from USTR, Commerce, the Copyright Office, DOJ, etc. with huge resources and turf with very deep roots. Not to mention Congress, where the real power lies and most of the action really takes place on IP.

BTW, those who think that Canada is alone or unfortunate in having more than one source of power in government IP policy making should look carefully at how the US system works (or sometimes doesn't work).

And even though she may be nearer to the President than others in terms of proximity, she will not have much in the way of resources and he has a few other more pressing things on his mind than incessant whining by the usual sources about piracy and counterfeiting everywhere in the world it seems other than in mid-town Manhattan.

This hearing will be webcast and may be worth watching to see if she talks about what her job will entail.

HK

UNCITRAL security interests consultation update

Canada is off once again to Vienna to chair the UNCITRAL initiative on security interests. The Canadian delegation is now in Vienna from November 2 to November 6, 2009.

Canada has provided the Chairperson for UNCITRAL'S Working Group VI, which deals with Security Interests since its first session in New York in 2002. She is Kathryn Sabo of the federal Department of Justice. This is the 16th session of Working Group VI. All of the meetings have taken place in New York and Vienna.

Working Group VI has come up with a basic “Guide” document dealing with security interests generally. The main document is here. Don't be in a rush to hit “print”. It's over 500 pages long.

The supplementary material, currently under consideration, and which seems to deal mainly with IP, is inconveniently split up into small chunks, is here.

Even though these latest draft papers date from July of 2009, the consultation by telephone took place only last week on October 29, 2009.

IPIC (Intellectual Property Institute of Canada) took part in the consultation and has prepared some good written commentary. It has an active and well informed committee. It provided suggestions on acquisition financing, continuous filing, the “ordinary course” rule, and choice of law relating to royalties. IPIC also provided detailed comments back in April. Without the prodding of IPIC and perhaps my occasional blogs, I doubt that there would have been any consultation.

The problem for most readers of this blog, and even its author, is that these several hundred pages of documents are written in very inscrutable international bureaucratese about very technical stuff at the edge of IP, bankruptcy, insolvency, licensing, and banking/lending law. Even if one has the time to read all of the documents, this is very tough going. There are probably only about a couple of dozen people in Canada who can make much sense out of them, and probably less than a handful of people who have serious expertise in all of the necessary areas.

We struggled with all of this almost a decade ago when the late lamented Law Commission of Canada looked at the issue - and we did come up with a perfectly readable book that I edited, still available here.

But the current landscape is quite unreadable. Given the undoubtedly large investment made by Canada in the time and travel costs of providing a Chairperson and three experts to advise her for this UNCITRAL Working Group VI efforts over the several years, I would have thought that Canadians could be provided with a few pages of explanatory documents about what is going on and how it may affect them.

I've been told that the UNCITRAL soft law initiative is consistent with Canadian law. That is not without irony because Canadian law is not exactly very clear on lots of fundamental questions, as anyone who reads my book will quickly see. Little has changed since that book was published in 2002. The UNCITRAL efforts will presumably provide a framework for other countries thinking of legislating in this area. This will supposedly benefit Canadians seeking to do business in such countries. If this is so, is it too much to ask that our government inform Canadians what this is all about in language that Canadian lawyers, bankers and other stakeholders can understand?

These issues are potentially very important for those in sectors such as film, sound recordings, software, and high tech generally where financing deals can readily involve IP as collateral, if there is sufficient expertise to do such deals. Indeed, most of the discussion at last week's “consultation” concerned acquisition financing, presumably a hot topic in these sectors. There was considerable confusion about what version of the latest document from UNCITRAL will be “official” on this issue.

Unfortunately. the Department of Justice, which is leading Canada's participation, has no interest in providing any explanation of the UNCITRAL documents to Canadians and the consultation effort has been invariably been passive, infrequent (only two or three occasions of which I am aware) and on the eve of any of the meetings in New York or Vienna, Consultation requires more than providing a link to UNCITRAL's website.

One would hope that Canada's expert team could provide a brief of a few pages outlining what this Guide and its IP Supplement will do, Canada's role in this process, and why Canadians should be interested. Above all, we need to know the main features of the proposed soft law regime. Surely with all of the expertise our delegation has, and the fact that we Canada has invested hundreds of thousands of dollars or more in providing the chair and other support for this effort, the provision of an explanatory document is not too much to ask. It might even foster investment and innovation.

HK

The 10th Anniversary of the WIPO UDRP

Congratulations to WIPO and DG Francis Gurry and Director Erik Wilbers on the 10th anniversary of WIPO's UDRP ("Uniform Domain Name Dispute Resolution Policy") initiative.

We take the UDRP now for granted because it was and is a simple, elegant and efficient method of dealing with a very pressing problem, namely the registration and use in bad faith of domain names that are identical to or confusing with a trademark or service mark in which the complainant has rights and where the registrant has no rights or legitimate interests in respect of the domain name. But it was not an obvious solution at the time and WIPO deserves much credit.

WIPO under Francis Gurry and Erik Wilbers came up with and implemented a solution that worked - and all without a treaty. This was critical to establishment of ICANN and ICANN's initial credibility. Indeed, ICANN did not yet exist when WIPO started its UDRP consultation process in 1998. The WIPO Arbitration and Mediation Center has now processed more than 16,000 decisions to date - a truly remarkable record. They have very tight schedules and deliver speedy, fair, efficient and inexpensive justice. I'm pleased to have been involved in some of these cases as a panelist.

A very recent positive development approved by ICANN on October 30, 2009 concerns the WIPO "eUDRP" process, will will do away with paper filings - except for the original service of the complaint notiice, which will be done in paper to a physical address as a safety valve to ensure proper service.

Also in the works is a "Fast Track" procedure that will provide a more summary determination in obvious cases, while still preserving full recourse to a full three person panel determination. This will account for the fact that about 25% of cases are settled and 75% of the rest proceed by way of default.

Here's Francis Gurry talking about the past, present and future of the UDRP at the recent conference celebrating the tenth anniversary.

HK

Hill Times Policy Briefing on Copyright

The Hill Times has a policy briefing on copyright available here.

This includes statements from both Ministers and pieces by Charlie Angus, Michael Geist, Simon Doyle, Giuseppina D'Agostino and myself.

Mine is entitled "Canadian Copyright Collectives and the Copyright Board After 20 Years: Does the System Serve its Purpose?"


HK

Von Finckenstein on Throttling

Here is an amazing interview with Konrad von Finckenstein, the Chairman of the CRTC, with Jesse Brown of Search Engine, a remarkable program that was CBC's loss and is TVO's gain.

Mr. von Finckenstein answers Jesse's questions about last week's controversial CRTC Net Neutrality decision - or Indecision as I called it, since it essentially confirms the status quo, puts off the likelihood of any real change by years and shifts the onus on consumers to lay complaints.

I don't have time now to comment on the questions or answers in detail. I hope that there is eventually a transcript published of this.

But this much can be noted. , without any value judgment on my part. It is extremely unusual in Canada - or even the USA or UK - for courts to defend or even explain their own decisions. The decision of a court is expected to speak for itself. Canadian judges rarely speak in public, except on very general issues. They normally avoid any reference to specific cases, especially recent ones and particularly ones that they have been involved in deciding. While the culture involving tribunals may differ somewhat from that of Courts on the issue of “speaking out”, still Mr. von Finckenstein's interview is quite remarkable and unusual in terms of its candour, content and timing.

It is certainly a “must listen” for anyone who cares about the internet or Canadian governance.

HK

PS - gotta love the internet! There's now an obviously unofficial transcript posted by one Bob Jonkman on his blog. Unofficial but helpful. Can't vouch for accuracy but here it is.

And here's an excerpt that's very revealing as to whether we can expect any improvements anytime soon:

08:24 JB: Bell and Rogers, they’ve come out saying that they feel that they’re already in compliance with these rulings. This, this ruling changes nothing, that they say they’re fine with it because they’re already doing what you suggest.

08:35 KvF: I hope, hope that’s true. I hope that’s true. We shall see. You know, if, uh, you, for instance, uh, advanced technological user, and we, let’s assume for argument’s sake you’re a client of Rogers find they’re not, then, then first of all you going to go on the Web site and see who’s the in, uh, apply internet management traffic practices, or have they been, perhaps they’ve been described there, and does it say what the effects of those are. If they aren’t, and you find out they applied them anyway what you going to do? You’re going to launch a complaint and we will look into it. On the other hand, if they are exactly doing what they’re saying, then wonderful, and then we have total compliance, which is the whole idea.

Lord Mandelson, a.k.a. The Terminator's Last Strike?

Lord Mandelson in the UK seems eager to emulate France with a three strikes regime, notwithstanding criticism from no less than MI5. The very fine feline fancier and UK IP blogger extraordinaire Jeremy Phillips, aka the IPKat, points out:

It has been unkindly said of his Lordship that he understands better than others the operational functionality of a "three strikes" rule since, in the days before his ennoblement, he twice had to resign from a government position on account of his having done nothing wrong.

Could this be Lord Mandelson's last strike?

HK

UNCITRAL SECURITY INTERESTS GOC CONSULTATION

Following my earlier posting of October 15, 2009, the communication below has been received this past Friday October 22, 2009 from Ms. Sabo of the Canada's Department of Justice, who has also served as the Chair of the UNICTRAL Commmittee on Security Interests in IP for several years. Note that the meeting is on October 29, 2009 and the RSVP date is October 30 [sic] - surely meant to be October 28. The session in Vienna is on November 2, 2009.

*************

Le français suit

Working Group VI of the United Nations Commission on International Trade Law (UNCITRAL) will hold its fourth session on uniform rules relating to security interests in intellectual property from November 2-6, 2009. The product envisaged will be an addition to the UNCITRAL Legislative Guide on Secured Transactions, adopted in December 2007. As such it will be a non-binding set of recommendations and policy considerations.

Canada will be attending the Working Group session. To assist in developing Canada's position for the session, the Department of Justice is seeking the views of stakeholders on the proposals that will be on the table.

The relevant documents (A/CN.9/WG.VI/WP39 and addenda 1-7 and A/CN.9/WG.VI/WP40) are posted on the the UNCITRAL website at www.uncitral.org under "Working Group VI 16th session". You may also wish to refer to the Legislative Guide itself, or at least to the terminology and recommendations, which can be found at http://www.uncitral.org/pdf/english/texts/security/combinedlegislative%20guide.pdf.

Those interested in providing their views are invited to attend a meeting in Ottawa on Thursday, October 29, 2009 at 3:30 pm in room 5140, 284 Wellington Street. You may also participate by phone by calling 1-888-265-0903 and entering passcode 299716 followed by the "#".

Whether you wish to attend in person or by phone, please advise me or my assistant, Julie Di Lalla (jdilalla@justice.gc.ca) by Wednesday, October 30. Alternatively, you may send comments to me via e-mail (kathryn.sabo@justice.gc.ca). Please forward this message to other interested persons.

I look forward to hearing from you.

Kathryn Sabo

Kathryn Sabo

General Counsel | Avocate générale

International Private Law Section | Section du droit privé international

Department of Justice Canada | Ministère de la Justice Canada

Ottawa Canada K1A 0H8

kathryn.sabo@justice.gc.ca

Telephone | Téléphone 613 957-4967 / Facsimile | Télécopieur 613 941-4088

Government of Canada | Gouvernement du Canada

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Le Groupe de travail VI de la Commission des Nations-Unies pour le droit commercial international (CNUDCI) poursuivra l'élaboration de règles uniformes en matière de sûretés portant sur la propriété intellectuelle lors de sa quatrième session qui se tiendra du 2 au 6 novembre 2009. Le produit envisagé sera un ajout au Guide législatif de la CNUDCI sur les opérations garanties, adopté en Décembre 2007. À ce titre, il s'agira d'un ensemble non-contraignant de recommandations et de considérations en matière de politiques.

Le Canada participera à la session du Groupe de travail. Afin de développer la position du Canada pour la session, le ministère de la Justice demande aux parties intéressées de nous donner leurs commentaires concernant les propositions qui seront discutées.

Les documents pertinents (A/CN.9/WG.VI/WP39 and addenda 1-7 et A/CN.9/WG.VI/WP40) sont publiés sur le site internet de la CNUDCI à www.uncitral.org sous «Groupe de travail VI 16e session» . Vous voudriez peut-être consulter également le Guide législatif, ou du moins la partie qui porte sur la terminologie et les recommandations, qui se trouve au http://www.uncitral.org/uncitral/fr/uncitral_texts/payments/Guide_securedtrans.html.

Les parties intéressées sont invitées à une réunion qui aura lieu le jeudi 29 octobre 2009 à 15h30 à la salle 5140, 284 Wellington à Ottawa. Vous pouvez participer par téléphone en apellant le numéro d'accès 1-888-265-0903 et en entrant le code d'accès 299716 suivi du signe « # ».

Pour participer, soit en personne, soit par téléphone, veuillez aviser mon adjointe, Julie Di Lalla (jdilalla@justice.gc.ca) ou moi-même avant le mercredi30 octobre. Dans l'alternative, vous pouvez m'envoyer vos commentaires par courriel (kathryn.sabo@justice.gc.ca). Je vous invite à transmettre ce message à d'autres personnes intéressées.

Je vous remercie d'avance de votre collaboration.

Kathryn Sabo

Kathryn Sabo

General Counsel | Avocate générale

International Private Law Section | Section du droit privé international

Department of Justice Canada | Ministère de la Justice Canada

Ottawa Canada K1A 0H8

kathryn.sabo@justice.gc.ca

Telephone | Téléphone 613 957-4967 / Facsimile | Télécopieur 613 941-4088

Government of Canada | Gouvernement du Canada

More Tortuous Torture Tales

Well, it seems that the American's use of music to torture alleged terrorist prisoners is an issue that just won't go away. It has even given rise to FOIA requests. One of the songs that was used, apparently, was one of my all time favourites, the Meow Mix commercial:

The aggrieved artists who are protesting include Pearl Jam, R.E.M., and Trent Reznor of Nine Inch Nails.

As I've indicated before, there could be an issue as to whether ASCAP & BMI royalties are owed to the composers.

If ASCAP can chase after Girl Scouts to collect royalties, why not military prisons?

Now if the USA only had "moral rights" in its copyright law, which it says is so much better than Canada's, the aggrieved composers would have a good shot at getting an injunction. Yet another example of how much stronger and better Canadian copyright law is than that of the USA.

Notwithstanding what the new Ambassador to Canada, David Jacobson, who has wasted no time in becoming misinformed, is saying.

HK

CRTC Indecision on Net Neurtality ("Throttling")

With respect, I cannot share the enthusiasm of Michael Geist, etc. for today's CRTC decision on Net Neutrality ("Throttling").

True, the CRTC agreed with the overall principles of net neutrality propounded by its exponents, which allows for network management subject to rational, justifiable and not overly restrictive network management by the ISPs. But the decision basically leaves the effective responsibility of enforcement of these principles in the hands of consumers via a complaint mechanism, ensuring years more of litigation, delay and full employment for the lawyers involved. One can be reasonably confident that individual complaints by individual users will not easily or quickly move the huge edifice of the CRTC and the major ISPs.

In the short term, the only thing that will change for Canadian consumers will be they will learn with more transparency more details of why they have some of the worst internet service in the world at some of the highest prices. More transparency will not promote more competition in the market because there is no real competition in an essentially duopolistic market with now virtually insurmountable barriers to new entry.

The CRTC once again accepted at apparent face value that congestion was a fact. This should have required extensive review of the extensive evidence, much of which was cloaked with confidentiality. This should have been a key and reasoned conclusion. Once again, network congestion has been regarded as a premise.

Moreover, once again, the fact that most Canadian consumers are faced in reality with a choice between two duopolists was glossed over. The third party independent ISPs who must depend on one of the duopolist's backbones cannot compete on service in any meaningful way.

The decision glosses over the P2P issue, which is the elephant in the room. Leaving aside the inconvenient question of whether downloading of music is legal in Canada by reason of the levy scheme, and even conceding that the unauthorized downloading of entire copyright protected movies would normally be illegal, there still remains the fact that P2P technology has fantastic innovative potential for the authorized distribution of software, movies, music and other “big” files. In the language of a landmark US case, it has “substantial non-infringing uses.” The CBC has, to its credit, tried to use it but was thwarted by throttling. This decision will leave P2P under a serious cloud that will hinder innovation. This should not be the case. The question of unauthorized downloading and file sharing is a complex and important one, but it should not be solved or even dealt with at the CRTC.

So - the CRTC perhaps outlined the right principles today. But it did little to make them a reality. "Placing the onus squarely on consumers" as Michael puts it simply won't work. Given the likely lawyering involved, complaints could take years to resolve. And we're talking about the in internet here, which evolves, even when throttled, much faster than the CRTC can move. There is an old maxim in law that “There is no right without a remedy. Ubi jus ibi remedium.”

Given the enormity of this hearing (it was really the second major proceeding) and all the efforts that went into it, the decision could have and should have decided much more.

Let's see whether tomorrow's announcement from the FCC in Washington is bolder, more decisive and more innovative. I'm betting that it will be.

HK

A Real Canadian Copyright Debate

The Canadian Constitution Foundation ("CCF") October 3, 2009 panel on copyright moderated by Arnold Ceballos and featuring myself and Richard Owens has now been posted on YouTube. This was a genuine debate, though civilized throughout. This was the third annual CCF conference and I highly recommend this event for the future. Justice LeBel was the keynote speaker this year. Here's the program.

For my part, I tried to tie the main issues of copyright into other themes of the conference and interests of the CCF, such as freedom of various kinds, including freedom of expression and movement (e.g. across borders with laptops), freedom to innovate, freedom from "taxation", freedom from Big Brother "control" via DRM and TPM, etc.

Here's the whole panel. The odd camera angle is because the Power Point screen was off stage.

HK

Towards a Parody Consensus?

Glenn Kauth has an article in the current Canadian Lawyer magazine entitled Push and Pull of Copyright Reform.

He quotes several lawyers, including Ron Dimock, Peter Wells, myself and Jason Gratl (a Vancouver lawyer acting for a defendant in the Vancouver CanWest case which may turn on parody). But the most interesting quote is from Roanie Levy of Access Copyright, which wants to collectively license just about anything imaginable having to to do with the printed word and then some.

To my delight, even Roanie seems to concede that an amendment is necessary to deal with parody. She is quoted as follows:

“The law is not clear. In my opinion, [an exception for parody] is there. But we don’t have a lot of case law on it in Canada,” she says, calling for a “specific, limited exception” for such works.

Now, it seems that even Access Copyright is on board for a parody right/exception and will hopefully refrain from trying to monetize it through a "commercially available" exception to the exception or a "market-based solution" as is its wont. (I'm just kidding - please don't anyone get ideas). Can other content owner interests be far behind? Is this at least one area where there might be a glimmer of agreement?

Will Canada be able to regain its rightful place in the G8 of humour, at least?

In all seriousness, a satire and parody right/exception should be an obvious inclusion in any new legislation. It should by no means be the only "user friendly" gesture, as I am sure some content owners would like to see. But it would be a good start to restoring some sense of balance and civility in the great copyright wars that are unfolding.

HK

Canadian Un-Consultation re UNCITRAL Security Interests in IP Project

Despite the fact that a Canadian government official from the Department of Justice has been chairing UNCITRAL's work on security interests in IP for several years, there has been almost no consultation with the private sector in Canada on this important subject. The Europeans are very aware and involved - for the obvious reason that using IP assets as collateral to raise capital can be crucial to financing innovation. Here's info about a recent seminar in London, in which my friend Jeremy Phillips was instrumental.

Here are the links to the papers that will be discussed in Vienna from November 2-6, 2009. The papers date from July, 2009.

But so far, there have been no attempts of which I am aware by Canada's government to consult with Canadian experts and stakeholders in preparation for the November meeting. This failure to consult on this issue is deja vu all over again.

This is really a pity, given all the work of the late lamented Law Commission of Canada and many individuals under that aegis that was done on this issue. I was privileged to have advised the Law Commission on this project and to have edited the resulting book, which contains many excellent papers from Canada and abroad.

HK

PS - the UK government is seeking input on this process, perhaps as a result of my friend Jeremy's efforts. See this.

It is possible that the Canadian government believes that there is insufficient interest here to warrant consultation. That, however, would be an incorrect and conclusory inference. If there is lack of obvious exitement over this in the private sector, it may be only because the private sector is almost completley unaware of what has been going on at UNCITRAL for several years. One of the the main functions of consultation by government is educational. Up to now, this has not happened. Hopefully, our government will find a way to share its expertise with the private setor, so that meaningful and timely input can be obtained. The issues are very technical and complex. But there are those who care and are capable of comprehending them. It would be unfortunate if the private sector becomes informed about all of this only when it is a fait accomplit.

On CRTC, Kindle, Copyright Board, Copyright & Controversy

Michael Geist has unearthed the CRTC submission to the recent copyright consultation. It was apparently posted just yesterday, October 8, 2009 despite having been submitted on September 11.

The remarkably sensible submission is also remarkable for its frank recommendations on how things might be improved in terms of the tariff setting procedure and the work of the Copyright Board. The CRTC recommendations are quite consistent with my own now old observations found here.

No doubt some eyebrows will be raised about whether one tribunal should be suggesting changes in the way another should operate, for example with respect to:

* timeliness
* cost awards

For its part, the Copyright Board may nonetheless welcome the CRTC's suggestion that the Board should have "the resources necessary to fulfill its mandate within timelines that do not disadvantage the parties before it."

The problem, however, would be that the Canadian Copyright Board is already by far the biggest institution of its kind anywhere in the world. This leads to several other discussions, which I won't deal with here and now.

The CRTC also deals with private copying and the need for a single radio tariff. No fear of controversy here. This is vintage von Finckenstein.

The CRTC is right about its conclusion, which is this:

Copyright is a key instrument enabling the digital knowledge economy. For it to withstand the test of time, the Copyright Act should be reformed in a manner that defies a silo based approach — and includes considerations of related issues such as the extension of access to next generation networks, appropriate funding for the production and digitization of Canadian cultural content, and efforts to encourage research, development and innovation in the communications industries.

This is quite timely. Everyone is beginning to notice the precipitous decline in Canadian innovation that is resulting from a lack of competition in key sectors in Canada and lack of coherence in Canadian policy and regulation. See today's Globe and Mail.

The CRTC's conclusion is perhaps idealistic and not without irony. The CRTC itself has much to answer for in terms of lack of competition in Canadian telecommunications and the noticeable decline in innovation in respect of anything to do with broadband and wireless services. But this submission is a beacon of hope that some, at least, see the need to do things better going forward.

Something has got to give in Canada. I have no doubt that these issues are part of the reason that Canada is among the last to benefit from new technological innovations. For example, even if Amazon can find a carrier competitive enough to cut a decent Kindle deal, it would then likely be zapped with an application for a tariff for the “communication” right filed probably by Access Copyright ("AC") - and it would then have to spend potentially millions on that proceeding which would take years, not to mention the inevitable judicial review. The resulting tariff, if it were finally certified, could increase costs substantially and retroactively but not predictably, and with insignificant benefit to most actual Canadian creators. This is what happens with redundant collectively administered rights - to which our collectives wish to add even more.

HK

Update - A perceptive question/comment from Andrew Martin, former head of Access Copyright - below. Why might AC do this? For the same reason that music publishers have tried to get at least two bites and tariffs at the same online apple, so to speak.