Vive la France

There's an interesting decision reported on in the IHT picked up on Michael's BNA bulletin today.

It's always dangerous to rely on newspaper reports of legal cases, especially from France - but this is a reputable reporter with the very reputable IHT and it's great to have good news at this time of year.

It seems that a P2P infringement enforcement effort was blocked because the rights holder illegally breached French privacy laws to get the victim's identity by going behind the user's IP address.

This - apparantely - is a major "non, non" en France, which has tough EU directed privacy laws.

Moreover, a French government lawyer is suggesting that the rights owners could be liable for big trouble:

"The rights-holders should now understand that they cannot set up a system to identify downloaders on the Internet without proper authorization from us," said Moulin, whose organization has the ability to grant such permission. "It is important to have these protections established by a court."

Invasion of privacy carries fines of up to €300,000, or $395,000, and five years in prison, Moulin added.

Mais, oui! C'est déja vu all over again, encore une fois. This all sounds sweetly familiar. First, Canada, then the Netherlands and now France are standing up for privacy rights in these attempted invasion situations and Courts are backing up the rights of individuals not to have their privacy rights fundamentally breached without adequate evidence and sufficient oversight in the pursuit of penalizing common place activity that may actually be benefiting record companies.

When this happened in Canada in 2004 in the BMG case, in which I was very involved, Judge von Finckenstein was severely and wrongly criticized and Canada was labelled a "digital Sunni Triangle" by a reporter with the appropriately fitting surname of Bray at the Boston Globe.

It is seems now that Canada is in increasingly refined and enlightened company - and history may applaud us for leading the way.

HK

No copyright bill this year...

Today was the Ides of December. There was no copyright bill.

The House of Commons is now in recess until January 29, 2007.

So, there won't be a bill this year.

Doubtless, a lot of scenarios are being considered and reconsidered by all concerned.

HK

Canadian Documentarians on Copyright

The Documentary Organization of Canada, ("DOC") which speaks for hundreds of Canadian documentarians, issued a package in anticipation of a copyright bill before Christmas. Here is their public letter to the Ministers. There is a background white paper (by your's truly) that discusses legal issues, particularly the problems of the "clearance culture" and makes several specific recommendations. There is also a survey of DOC members on their experiences with copyright and the clearance culture.

Here's the DOC press release.

Here's the Globe and Mail story.

HK

Gowers Day

The Gowers Review is available here.

I haven't gone through it yet - but these recommendations seem interesting...

Flexibility
Recommendation 8: Introduce a limited private copying exception by 2008 for format shifting for works published after the date that the law comes into effect. There should be no accompanying levies for consumers.

Recommendation 9: Allow private copying for research to cover all forms of content. This relates to the copying, not the distribution, of media.

Recommendation 10a: Amend s.42 of the CDPA by 2008 to permit libraries to copy the master copy of all classes of work in permanent collection for archival purposes and to allow further copies to be made from the archived copy to mitigate against subsequent wear and tear.

Recommendation 10b: Enable libraries to format shift archival copies by 2008 to ensure records do not become obsolete.

Recommendation 11: Propose that Directive 2001/29/EC be amended to allow for an exception for creative, transformative or derivative works, within the parameters of the Berne Three Step Test.

Recommendation 12: Create an exception to copyright for the purpose of caricature, parody or pastiche by 2008.

Recommendation 13: Propose a provision for orphan works to the European Commission, amending Directive 2001/29/EC.

Recommendation 14a: The Patent Office should issue clear guidance on the parameters of a ‘reasonable

Recommendation 14b: The Patent Office should establish a voluntary register of copyright; either on its own, or through partnerships with database holders, by 2008.
Recommendation

15: Make it easier for users to file notice of complaints procedures relating to Digital Rights Management tools by providing an accessible web interface on the Patent Office website by 2008.

Recommendation 16: DTI should investigate the possibility of providing consumer guidance on DRM systems through a labelling convention without imposing unnecessary regulatory burdens.

Recommendation 17: Maintain policy of not extending patent rights beyond their present limits within the areas of software, business methods and genes.
search’ for orphan works, in consultation with rights holders, collecting societies, rights owners and archives, when an orphan works exception comes into being.


One thing caught my eye straight off. The limited private copying exception - despite the lack of an immediate levy requirement - is not as generous or simple as it seems, since it is only prospective. See Section 4.72. The theory seems to be that rights owners will factor the economic value of private copying into their products in the future, but can't do so for the past. The Report suggests that collecting societies pick up the pieces from the past. There has never been levy in the UK. It's not immediately apparent how this could work. Will there be some kind of levy for the legacy works? The main recommendation would seem to explicitly suggest not. So how are the collecting societies supposed to collect? What effect will the current levy review in the EU have on all of this?

Questions indeed.



HK

DMCA Exemptions

The U.S. Register of Copyrights has just issued some useful exemptions to the DMCA - as she has limited power to do.

More - much more - is here and here. AP has a good explanation of all of this.

The first exemption is quite interesting for Canada:

1. Audiovisual works included in the educational library of a college or university’s film or media studies department, when circumvention is accomplished for the purpose of making compilations of portions of those works for educational use in the classroom by media studies or film professors.

That would appear to correspond with what US law is in the non-digital context by reason of their general fair use doctrine.

This is the kind of thing that CMEC and the educators should be striving for in Canada - namely clarification or provision - but only where really necessary - of activities to be treated as examples of fair dealing in Canada. This is something achievable - especially when the USA treats is educators so much better than does Canada.

Instead, our educators have passively accepted the disaster of C-32 and are now going too far to the other extreme with their proposal for a sweeping special exception for educational use of the internet, which manages to be both unnecessary in some respects and excessively vague and overreaching in others. This has managed to alienate a lot of diverse interests and will no doubt distract from what are likely to be the real battles in the next bill, including staving off DMCA North. It could also badly distract from the more reasonable and achievable goals that the educators should be pursuing.

Another interesting one is this:

6. Sound recordings, and audiovisual works associated with those sound recordings, distributed in compact disc format and protected by technological protection measures that control access to lawfully purchased works and create or exploit security flaws or vulnerabilities that compromise the security of personal computers, when circumvention is accomplished solely for the purpose of good faith testing, investigating, or correcting such security flaws or vulnerabilities.

Did anyone say "SONY Rootkit?"

HK

PARLIAMENTARY COMMITTEES AND COPYRIGHT

I am somehow assuming, though not conceding, that the Government is going to ignore, for the moment, my call for a special judicial copyright commission - though I am pleased that Michael Geist has already effectively endorsed it:

Instead of hurriedly introducing a bill that will leave everyone unhappy, the Conservatives would do far better to launch a consultation or commission (as Howard Knopf suggested this week) on copyright.

I am also somehow assuming that the Government is going to keep to Mme Oda’s word by tabling a bill very soon that will be very controversial and that the controversies will be very complex, as they usually are in copyright matters.

If there is a copyright bill, and if it gets as far as committee hearings, it is imperative that it be considered by a balanced committee that represents the mandate of both of the sponsoring departments. The Heritage Committee alone cannot be entrusted alone with this task. Even with Mme Bulte gone, the institutional structure militates against both actual and apparent balance in the hands of that Committee alone. Even before Bulte, that Committee often gave the appearance of imbalance and of being too prone to influence by the Department of Canadian Heritage and the usual lobbying suspects. Indeed, the appearance probably reflected the reality. Clifford Lincoln may have appeared more balanced than Mme Bulte, but the result too often left much to be desired.

The effective low point of copyright committee proceedings was back in the C-32 days in 1996-1997. The Bill that went into committee was a bad one - especially for the educators and broadcasters. But at least there were a few exceptions for users. When it came out of committee, it had exceptions to the exceptions that vitiated the exceptions. It was a dark day for users. And the process was not pretty.

There are two structural improvements that would go a long way to ensuring both the appearance and reality of balanced and transparent committee hearings. They are cumulative and not alternative.

1. There should be a “special joint committee” that brings together all or at least the most knowledgeable and interested members of the Heritage and Industry committees. This would mirror the joint responsibility of the two Ministers and Departments. Such a Committee would have joint chairs. There is ample precedent for this approach.

2. There must be two or even three outside expert counsel to advise the Committee. Bill C-32 had only one outside counsel. For many reasons, the resulting product was a disaster for users. Likewise with the so-called "Bulte Report" in 2004. Fortunately, the Bulte Report had no immediate legal effect, though we may well see its influence infecting the forthcoming bill. In fairness to the counsel involved, we will never know for sure what transpired behind the scenes and whether the results were more because of or in spite of their work. This is simply too much responsibility to put on one person’s shoulders, given the polarization of policy views on copyright and even of expert opinions on legal copyright matters. For example, there is a great cacophony of divergent “expert” opinion on whether downloading P2P music files to a PC hard drive is legal. Another example is whether CCH v. LSUC protects, as fair dealing, much of the activity in the educational system that currently results in passive, massive and arguably greatly excessive payments of millions a year to Access Copyright and much of the internet related activity that CMEC is lobbying about. Whatever Committee considers this bill should have access to frank discussion of the range of opinions. That can only come from hearing all sides - not only from witnesses but from its own expert counsel.

Frankly, I cannot think of any one person who is sufficiently knowledgeable, balanced, experienced, expert in both the common law and “droit d’auteur” perspectives, and who would generally be perceived to be both actually and apparently sufficiently neutral and independent to do the job of committee counsel on their own.

It is no answer for the Government or Parliament to say that it will cost too much to have two or three counsel. How does the Department of Canadian Heritage justify 20 FTEs (full time employees) more or less to work on copyright policy? I suspect that this is probably more than any other government anywhere - and certainly far more than Industry Canada. Presumably, Heritage got the FTEs because copyright is important and because, as many believe, “copyright matters.” Well, if copyright matters, then the money will somehow be found and find its way into the right budget. There’s a huge surplus out there, and it just got bigger with the recent cuts.

What is needed amongst the suggested two and preferably three special committee counsel is a real and perceived balance between common and civil law approaches, and between creators’, owners’, and users’ rights and interests. That is why there ideally should be three people. There should be one person who would have the confidence of creators, owners and collectives on the one hand and another who would have the confidence of users. We would likely need a third person to sit in the middle to facilitate communication and consensus. That person might be a sufficiently experienced, knowledgeable and neutral academic, or, if such a person could not be found, perhaps a retired judge with some good IP decisions under his or her belt. The committee counsel must have the experience and stature to be able to provide frank advice and guidance to committee members, and not simply serve as a passive research or drafting resource. Any relevant client or consulting interests regarding policy matters should be fully disclosed, not only to the committee but to the public.

It will not be easy to implement these suggestions. There are a lot of vested interests who would love to replay Bill C-32 and go back to the Heritage Committee (and not a joint committee) and see it with only one outside expert counsel, as in 1996-1997. But we cannot allow that to happen.

I have not forgotten about the official languages problem. That’s another issue and it may require a ruling from the Federal Court of Appeal and maybe even the Supreme Court of Canada. I’m working on that. However, whatever committee handles the copyright bill can temporarily solve the problem by agreeing, as many committees do, to accept written material in either official language and not demanding it in both - but unfortunately this has not been the practice of the Heritage Committee under the previous government. This is a real issue for less well financed interest groups (i.e. most user groups) who cannot afford the cost of translating essential documentation, which in many cases will exceed the cost of preparing or collecting it - even assuming there is time, which there invariably is not. Although this is a huge legal and political problem, it is not a structural one. It is simply a question of the committee following what many more expert than myself in official languages believe to be the law of Canada. As I’ve said before and will have to say again, “either” means “one or the other.” It does not mean “both”.

BOTTOM LINE

If there is to be a bill, we must have the best possible committee structure with the best and most balanced advice available.

We must take the time to get this right. Currently, there are two lobby groups dominating and pushing the agenda. The one that appears to be in the most desperate hurry is CRIA, which has little or no connection with Canadian interests. The other most vociferous demandeur is CMEC, whose approach to copyright matters as reflected in Copyright Matters! is similar to that of Access Copyright as reflected in Captain Copyright, concerning which comparison Michael essentially agrees with me. Ironically, CRIA and CanCopy (the former name for Access Copyright) were the two big winners in Bill C-32.

With all of these difficulties ahead, and the very real likelihood that the bill as expected cannot get through any committee process - fair and balanced or otherwise - before the next election, my judicial copyright commission project begins to look better and better.

Even if there is a majority government after the next election, it may well wish to take the decisive step of calling for and properly constituting a judicially led commission. The current governance model of delegating arguably far too much law making power to the Copyright Board and leaving the ongoing development to be sorted out between two competing departments is not only far from ideal. In too many ways, it isn’t even working.

Perhaps an independent and fully transparent judicial commission can come up with a better way. How should this be set up? We’ll go into that another day.

Ministers may wish to take note.

HK

CMEC & Quebec

It seems that some prominent Quebec publisher spokespersons are opposed to the CMEC special exception for educational use of the internet. There is a very interesting op-ed in Le Devoir today.

So - the CMEC proposal is getting attacked from various sides on the basis of various strongly held points of view.

The politics here could be fascinating, The Bloq Québecois has always been maximalist on copyright. But, if the Bloq decides, for whatever reason, to block a bill containing this kind of provision, that could be real trouble for such a bill.

Could this be one point on which maximalists and users' advocates agree - even if for very different reasons? Two familiar and similar clichés come to mind. The first is that politics makes stange bedfellows. The other is that the enemy of one's enemy can be one's friend.

Could this be the start of a real and open debate that is long overdue? I've been advocating a judicial copyright commission for some time to provide independent and informed guidance on what's best for Canada and to hear all interested parties in the open.

HK

Time out for a commission on the future of Canadian copyright?

I have an op-ed in today's Hill Times - which is an influential weekly publication for those who work on, in or around Parliament Hill in Ottawa.

Bottom line:

Some key aspects of the copyright system and revision process are becoming dysfunctional in Canada. This country has had three excellent commissions over the last eight decades that looked at copyright law with a view to Canada's best interest. Two of these were led by judges. We are long overdue for another such commission, and we have judges who could lead it. That would be productive for the country and would be the best policy and political solution at this time for this government.

HK

Better never than late?

I thought I had traveled back in time - but it's today's story.

One of the band members of Procol Harum is claiming that he is a co-author of "Whiter Shade of Pale", a terrific and obviously very lucrative song from 1967 - notable for its Baroque and Bach inspired elements.

There's apparently a trial underway.

Now, this song was released almost 40 years. That's a long time - one might have though an excessively long time.

So - it will be very interesting to see how the Court treats the limitation period issue and how this got as far as trial in the first place. The alleged infringement was hardly hidden away.

Apparently, the Judge is musically inclined.

According to the Bloomberg story:

An electric organ has been set up in the court room for Fisher to play as part of his evidence. Justice Blackburne, who said he was "of an age to be familiar'' with the song and the Summer of Love, asked for the organ to be left on while the court room was out of use to allow him to play the sheet music submitted as evidence in the case.

HK

Constitutional Challenge to RIAA's statutory damage claims...

From the brave and bold Ray Beckerman - who fights the RIAA:

In UMG v. Lindor, Judge Trager has granted Ms. Lindor's motion to add a defense based on the unconstitutionality of the $750-per-song damages sought by plaintiffs. He rejected the RIAA's arguments that the defense was without merit, that the motion was untimely, that the amendment would prejudice the RIAA, or that Ms. Lindor was required to send a notice to the United States Department of Justice of her defense of unconstitutionality.

Judge Trager ruled:

[P]laintiffs can cite to no case foreclosing the applicability of the due process clause to the aggregation of minimum statutory damages proscribed under the Copyright Act. On the other hand, Lindor cites to case law and to law review articles suggesting that, in a proper case, a court may extend its current due process jurisprudence prohibiting grossly excessive punitive jury awards to prohibit the award of statutory damages mandated under the Copyright Act if they are grossly in excess of the actual damages suffered.....Furthermore, Lindor provides a sworn affidavit asserting that plaintiffs' actual damages are 70 cents per recording and that plaintiffs seek statutory damages under the Copyright Act that are 1,071 times the actual damages suffered. Aff. of Morlan Ty Rogers, ("Rogers Aff.", [pars.]5, 6. See also Aff. of Aram Sinnreich, ("Sinnreich Aff."), [par.] 2, 3 (attesting that popular music sound recording downloads and consumer license to use same are lawfully obtainable to the public at 99 cents per song, and of that 99 cents, roughly 70 cents per song is paid by the retailer to the record label). As FRCP Rule 12(b)(6) requires that this figure be taken as true for purposes of the motion, Lindor has alleged a factual basis supporting her affirmative defense."

This is potentially hugely important. If Ray wins on this issue (RIAA would almost certainly try to get it to the US Supreme Court if he does), it would be, without a doubt, one of the most important copyright cases in modern times...because it would take away the ad terrorem aspect of copyright law from ordinary citizens and the big copyright owners would have to do what normal litigants have to do, which is to prove actual damages. As Ray argues and the Judge notes, "plaintiffs' actual damages are 70 cents per recording and that plaintiffs seek statutory damages under the Copyright Act that are 1,071 times the actual damages suffered."

BTW, a lot of the problems in Canadian copyright law would go away if statutory damages were limited to purely commercial situations and could not be used to intimidate teachers, librarians, researchers, scholars, students and countless ordinary citizens who behave in ordinary ways.

At the time they were enacted in Canada in 1997, only Canada and the USA amongst major countries had the broad concept of statutory damages (i.e. minimum of $500 and $750 per work respectively).

Even in the USA, statutory damages are not available where the activity was done by an educational institution, library, archvive, public broadcaster or employee thereof "in any case where an infringer believed and had reasonable grounds for believing that his or her use of the copyrighted work was a fair use". The details are available here.

Now, THAT is something that educators should be fighting for here in Canada. Why should Canada treat its educational user community so much worse than the Americans do? And why should our educators so passively accept this? But it seems that CMEC and others in the educational community are, rather, obsessed with their special educational exception for use of the Internet. There are so many more useful, less harmful and more achievable goals that the educators etc. could be pursuing....and curtailment of statutory damages ought to be at the top of the list.

BTW, Michael now essentially agrees with me on how CMEC's views are not much different than those of Access Copyright in key respects. Here's his podcast of a recent talk.

HK

CRIA Rebuffed from the Bench

CRIA has just suffered a decisive setback in the Federal Court of Appeal.

Earlier this year, I blogged about how CRIA objected to its Class “B” members (i.e. the Canadian Indies) having to answer interrogatories in a Copyright Board proceeding involving an internecine dispute with the music publishers over online music.

CRIA’s position was that “When it became clear that the interrogatory process was too onerous to involve its smaller members, CRIA withdrew on their behalf."

This is a position with which anyone familiar with Board hearings from an objector viewpoint would tend to sympathize. Of course, CRIA’s concern about onerous interrogatories is nothing if not ironic, given CRIA’s key stakeholder role in the CPCC - which is infamous for its onerous interrogatories.

Onerous interrogatories have succeeded many times in recent years in driving even large and sophisticated objectors out of Board hearings, for example Archambault and Canoe, not only because of the burden and expense involved but the intrusive nature of the process, concerns about confidentiality, and the often doubtfully relevant nature of the interrogatory questions themselves.

However, the Board to its credit, did something quite interesting. Apparently out of concern for the Indies, it ordered CRIA to send notices to the Canadian Indies in the following language:

“CRIA recently opted to change the scope of its representation of its members’ interests in the forthcoming proceedings before the Copyright Board dealing with CSI’ s proposed tariff for the reproduction of musical works by online music services. Subsequently, the Board ordered CRIA to advise you of the following:
1) In these proceedings CRIA has chosen to act only on behalf of (name of each member that CRIA represents).
2) As a result, CRIA will not be allowed to advance any argument or lead any evidence that relates to your situation in particular, or to the situation of any other member of CRIA that CRIA does not represent in these proceedings generally.”

CRIA asked for reconsideration, but the Board stuck to its guns.

CRIA then went to the Federal Court of Appeal on judicial review.

On October 17, 2006, straight from the Bench and with costs, and reportedly without even needing to hear the respondent Attorney General, the Court dismissed CRIA’s application. Once again, the reasons come from Justice John Evans, the dean of Canadian administrative law. They are brief and blunt.

This confirms the wide powers of the Board, as spelled out in the Copyright Act, to require collectives to distribute notices deemed necessary to inform potential objectors and even members:

66.71 Independently of any other provision of this Act relating to the distribution or publication of information or documents by the Board, the Board may at any time cause to be distributed or published, in any manner and on any terms and conditions that it sees fit, any notice that it sees fit to be distributed or published.

It will be interesting if the Board more extensively uses its confirmed powers under this section and more generally to be more proactive in the public interest or the interests of members of collectives. I do have some thoughts on this and will post them in due course.

Ironically, in the interim since this case developed, most of the important Canadian Indies have left CRIA - and taken up their own position on copyright. See their very informative website.

I should point out that I have been involved for a long time in opposing the CPCC at the Copyright Board. I also opposed CRIA in the file sharing litigation. But, as always on this blog, these thoughts are solely mine.

HK

Canada's "International Obligations"?

On October 2, 2006, a senior official from the Department of Canadian Heritage, spoke as follows to the Canadian Heritage Committee of the House of Commons:

Ms. Danielle Bouvet: I believe that Ms. Oda, our minister, has already said that this bill is a priority for her. She has already announced that she wants to act as quickly as possible to ensure that our Act complies with our international obligations.

(emphasis added)

Here’s the link to the whole session. Michael spotted this a few days ago - and it’s a really unfortunate statement because it’s based upon an inaccurate premise and is, frankly, misleading. Canada is in full compliance with its current international copyright obligations, unlike a certain neighbouring country that is strongly pressuring Canada to implement and ratify the 1996 WIPO Treaties but which is itself in ongoing violation of the 1994 WTO TRIPS agreement, as finally adjudicated by a WTO panel.

Needless to say, Canada has not ratified the 1996 WIPO Treaties and therefore has no “international obligations” to implement them or ratify them or to enact any of their provisions. Interestingly, the USA (oops, I said it) is fully bound by the WTO TRIPS agreement, which it continues to violate with respect to s. 110(5) of its Copyright Act. It may have reached a “temporary arrangement” with the complainants, but that unsatisfactory temporary arrangement is getting increasingly permanent and will doubtless come back to haunt.

And it’s getting harder and harder for the Americans to say that they comply with the moral rights provisions of Berne, which is something that Canada has done since 1931. One after another, US court cases are stripping away sustenance for the US argument that it provides the equivalent of moral rights protection. Moral rights are very important to creators and Canada should be proud of its long acceptance of this basic principle that has been fought hardest and longest by the American entertainment industry, and the US government - which managed to carve out moral rights from the dispute settlement mechanism at the WTO.

If that “international obligations” phrase sounds familiar, it could be because it is essentially identical to the language of the PR and GR machine of the CRIA, (Canadian Recording Industry Association) or, the Canadian Recording Industry of America, as many call now call it.

Just over a year ago, on September 5, 2005,C RIA’s Prez, Graham Henderson stated:

The WIPO treaties were signed by Canada in 1997, but have yet to be implemented here. Some commentators, viewing the proposed provisions of Bill C-60, question whether the draft will be effective and whether it will allow Canada to implement its international treaty obligations.
(emphasis added)

Perhaps the Minister of Canadian Heritage and her officials are feeling some pressure on this copyright account from the US government - which is surely the only reason why anyone in Ottawa is even listening to CRIA these days on this subject or anything else for that matter. After all, CRIA lost several of its most important Canadian independent members earlier this year. There are no organizations representing independent Canadian interests that are nearly so aggressive on WIPO ratification.

And speaking of treaties, it’s ironic that Canada is now in such a hurry to ratify the 1996 WIPO Treaties - which were controversial and problematic for Canada from the get go - and are rapidly becoming stale dated in any case. At the same time, it has become apparent this past week that Canada is backing away from our actual, real and existing “international obligations” under the KYOTO Accord. Maybe we’ll do something by 2050. What these two positions clearly have in common is that they suit the current US Administration. So, ironically, about the only thing that will last longer than Mickey Mouse’s copyright will be Canada’s timetable to clean up the air we breathe.

Of course, don’t count Mickey out for copyright term extension in Canada. He may have lost the first battle in the Mouse in the House aka Lucy Maud Montgomery episode. But that won’t be the end of the war. So, his copyright may yet live long enough to see cleaner air in Canada.

Do we, as a country, give a higher priority to protecting the American entertainment industry’s “right” to higher royalties from Canadians than Canadians' rights to clean air?

HK

Copyright Board decision on NRCC Background Music Tariff

The long awaited Copyright Board decision on NRCC’s proposed background music tariff was released on October 20, 2006. Although the Board admired the “eloquent” closing argument of NRCC’s counsel, it basically rejected most of NRCC’s arguments and evidence. At the end of the day, NRCC will get 43.06% of what SOCAN gets for the equivalent activity - covered in SOCAN’s Tariff 16. The 43.06% reflects the fact that NRCC does not have all the repertoire used and not all of the repertoire used is “eligible” for remuneration in Canada. The figure could have been even lower - as low as 36.12% according one of the lead objectors. The fact that is as high as 43.06% is about the one immediate victory that NRCC can claim in this instance.

There are some aspects of the decision that could raise concern for objectors for the long term. But overall, for the moment, it is a victory for the objectors at the Board. The now defunct CCTA (Canadian Cable Television Association), appears to have devoted considerable resources to fighting this tariff and seems to have led the charge, along with several other objectors.

By way of background. On May 11, 2002 the Neighbouring Rights Collective of Canada (which represents performers and record companies) filed its background music tariff - which covers the delivery of background music to commercial establishments, such as restaurants and hotels. The hearing was held in April, 2005. The decision was rendered on October 20, 2006, about 1 ½ years later. That’s about 4 ½ years in total.

This is one of the Board’s more detailed decisions, as if anticipating the Federal Court of Appeal’s ruling of last week that will now force the Board to provide more detailed reasons. This decision will not be an easy one to reverse on judicial review - because by Board standards, the reasoning leading to the rate calculation is more detailed than usual and there doesn’t appear to be any obvious legal error.

The Board rejected NRCC’s main arguments that:
• background music is analogous to pay-per-view for “proxy” purposes and that the Board should not rely on the long established SOCAN Tariff 16, which has worked well for many years for businesses that use third party commercial background music suppliers
• “neighbouring rights” are just as valuable as traditional composers’s and author’s copyrights and that record producers and performers are EACH entitled to the same share as SOCAN.

The latter argument is particularly bizarre, but NRCC persists. To suggest that a record producer who may front an advance, pushes buttons in a recording studio and distributes CDs is entitled to the same level of remuneration for a public performance as an Irving Berlin or Lennon/McCartney or Leonard Cohen who wrote the song is tantamount to an attack on the real creators of music. Very occasionally, a performer can “make a song” that would otherwise go nowhere. In these instances, the performers usually do very well indeed through other mechanisms (concerts, record contracts, endorsements, etc.) as do the record companies. But without composers and authors, there would be nothing to record or perform. The Board held the line by valuing neighbouring rights in total equally overall to traditional copyright - which some would argue is still an overvaluation. But it’s a predictable Canadian compromise.

In Europe, neighbouring rights are still regarded as something removed from pure copyright. In the USA, most of what Canada considers to be neighbouring rights are not even recognized as such under copyright law.

What should the objectors be concerned about in this decision? Although the Board rejected a number of NRCC’s arguments, it did so mainly because it felt that the evidence wasn’t there - this time. For example, the Board left it open to NRCC to charge separately for separate rights (performance + communication) involving the same single transaction - by coming back with better evidence. More layering in store....Some of the arguments could have been rejected out of hand. This invites a substantial change and more trouble in the future, if NRCC is able or willing to marshal better evidence. Also, the Board has explicitly disagreed with some important aspects of its own 1996 SOCAN Tariff 16 decision, which no doubt will make SOCAN happy - because that Tariff is up for a new round of hearings - but will cause uncertainty. While administrative tribunals are not bound by stare decisis, there is a certain virtue in predictability and certainty - unless the earlier decision was clearly wrong.

So, this is a temporary victory for users of background music and maybe even for users generally in terms of recent trends at the Copyright Board. But it may only be temporary. Time will tell.

This tariff lasts until 2009. By the time this comes around again, the Board will hopefully have updated and rationalized the other background music tariffs, namely SOCAN Tariffs 15A and 16.

One overall concern about the decision is that it will be largely inscrutable to those without considerable familiarity with the Board’s past tariffs and the roles of SOCAN and NRCC. For all of its relative length, it does not really put this tariff into a full and transparent context.

For example, the decision fails to adequately explain that ANY business can provide its own background music for free by operating a “radio receiving set”, as enshrined in s. 69(2) of the Copyright Act.

This historical exemption is something that small businesses or even big businesses with small premises who can use a “radio receiving set” need to be more aware of. This is a very useful exemption. Many businesses are probably needlessly paying money to SOCAN and NRCC - when they could use a “radio receiving set” - the only cost required being the cost of buying it and the electricity to use it. This is one exemption that SOCAN and NRCC would really like to repeal - and SOCAN certainty has tried and very nearly succeeded. But hopefully the Government will remember the considerable history and importance of it and leave it intact. Any attempt to get rid of it would and should cause enormous controversy. To its credit, the Board put a reference to s. 69(2) in the tariff itself, but this will likely be lost upon members of the public who don’t know what it is all about and how helpful it can be to small business establishments.

HK

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