Obama and NAFTA?

This story is coming back.

It seems that there is an effort in the US Congress to restrict all "stimulus" spending on iron, steel and perhaps other goods to "made in the USA" sources. That's illegal under NAFTA, perhaps under WTO, and would be a very bad way in any event to begin a new era in Canada/USA relations. NAFTA is still in full force, last I heard.

Industry Minister Tony Clement is already speaking out. Prime Minister Harper has expressed "grave concern." The issue clearly could and should arise during President Obama's visit to Canada on February 19, 2009 - if it has not been fully defused by then.

It will be really interesting to see what President Obama does about this, given his past pronouncements about NAFTA and the conventional wisdom about the Democratic Party's relative predilection for protectionism. Let's see whether there will be "change" afoot on this front.

If such a blatantly protectionist move as this is enacted into law, it will be even more interesting to see if the current Canadian government is once again in an unseemly hurry to enact the American wish list for a DMCA North "Made Worse in Canada" version of American copyright law.

There are things that need to be done to improve Canadian copyright law. But we don't need to import the worst features of American law, particularly if the Americans are going to become even greater scofflaws of international law. And we don't need to shovel money at the Americans for copyright rights that they don't provide to Canadians.

This is an old story that goes back well into the 19th century. It probably won't end soon. It is now beginning to be documented and analyzed by by scholars such as Sara Bannerman.

Let's hope that Canada learns not to get pushed around on copyright policy by the USA, as it once was by the UK. It's time for Canada to finally stand on its own feet on copyright and other fronts, and move on from being part of declining empires.

HK

EU Sound Recording Term Extension Battles

A major battle is brewing in the EU over term extension for sound recordings - from 50 to 95 years.

The European Commission - ignoring the independent expert report it commissioned from Bernt Hugenholtz and the work of other independent experts - is insisting that session musicians will benefit to the tune of about €2,000 a year. On the other hand, according to IP-Watch,

the Open Rights Group, a civil liberties organization, has contested McCreevy’s estimates about the extra revenue that would accrue to session musicians. It has calculated that some 80 percent of recording artists would only receive between €0.50 and €26 each year if the proposal becomes law.

Ironically, in a dangerous downward (or maybe upward) spiral, the EU is trying to harmonize the term of sound recordings with that of the USA. It will be recalled that the Mickey Mouse Copyright Term Extension Act of 1998 in the USA was justified by a need to harmonize to Europe's life + 70. In turn, Europe went up to life + 70 so as not to offend Germany.

In any discussions about renegotiating NAFTA, recall that Mexico has gone to life + 100.

Anyway, more details of the mess are available here from IP-Watch.

Lobbying for Big Bucks

Jeff Norquay, a prominent pundit and lobbyist with Conservative ties (he is a former Harper PMO Communications Director) is quoted in the Hill Times today as follows:

Mr. Norquay also said the copyright lobby will be in full force when the House returns and he expects a draft legislation to be tabled within months. The government introduced copyright legislation in the last Parliament, but it died on the Order Paper when the election was called.

In its 2008 platform, the Conservatives said they would reintroduce it if re-elected. "Because of the complexities of finding the right balance in copyright between creators and users, I expect it will be fairly controversial," Mr. Norquay said. "That's the reason that it's taken so many years for copyright reform to occur."

The Hill Times goes on to say:

Lobby groups Canadian Recording Industry Association and the Canadian Private Copying Collective have recently registered lobbyists.

CRIA no doubt wants a "making available" right and a clear path to suing its members' Canadian customers. CPCC no doubt wants to expand the levy scheme which is rapidly evaporating due to the fact, as confirmed twice by the Federal Court of Appeal, that the levy scheme doesn't apply to "devices" such as iPods.

CRIA dislikes the current levy scheme, which it more than anyone is responsible for creating, because it makes downloading from the internet onto audio recording media legal. But it loves the money its members get from it through the CPCC, which has collected well over $200 million to date.

It will be interesting to see how CRIA and CPCC try to untangle the legal and policy webs they have woven together over the years - to the point that CRIA last year actually opposed CPCC in the Federal Court of Appeal case in which I acted strking down the "iPod Tax".

And when CRIA continues to whine about WIPO ratification for the purpose of helping Canadian artists, it knows perfectly well that the direct and inevitable result will be that the cost of the levy will almost precisely double due to the requirement to provide full national treatment, so that Canada will send potentially tens and possibly hundreds of millions a year in windfall levies to foreign record companies and performers (most performers will probably never see any of it), and get back virtually nothing in return. Hardly sound economics, even in normal times, which we won't see again for a long time. Officials who understand this situation are well aware of this problem.

HK

HK

US - China WTO Dispute Continues

The final panel report in the US - CHINA WTO dispute has been released, confirming mixed results in which both sides can claim victory. The IP-Kat has a playful score card on the outcome.

The USA will not likely be thrilled and possibly rather dismayed that the WTO panel ruled that "the United States has not established that the criminal thresholds are inconsistent with China's obligations under the first sentence of Article 61 of the TRIPS Agreement."

Both sides can appeal.

Meanwhile, the USA remains the most egregious copyright scofflaw in the WTO with its longstanding failure to pay for public performance of music in smaller establishments (the "Section 110" dispute). The US gets away with this by paying a truly token amount of compensation to get itself off the hook.

As I said almost two years ago in this space:

The most flagrant adjudicated flouter of international copyright law is the USA. The WTO has long ago finally concluded that the USA fails to provide royalties for performing rights in many instances as a result of s. 110 of its Copyright Act. This is the most serious copyright dispute to date in the WTO and the USA is clearly unwilling or unable to do anything about coming into compliance. It has bought its way out of this violation with a paltry payment fixed by arbitration of about Euro 1,219,900 per year - a fraction of what the royalties ought to be.

The late great Sir Hugh Laddie rarely missed an opportunity to point out that counterfeit and pirated products were readily available on the streets in New York and Washington. No need to travel to Beijing.

It will be very interesting to see how the Obama administration proceeds from here. Presumably, it will be aware of the adage about living in glass houses.

HK

Is Three Strikes on The Way Out?

Controversy continues about New Zealand's ill-conceived three strikes regime that is due to take effect on February 28, 2008. LIANZA, an association that represents 460 public, educational, commercial, industrial, legal and government libraries in New Zealand is joining the chorus demanding delay or revision Their concerns are reported to be mainly:

“As written, every person or organisation that has a website is an ISP, as is every library, school, educational institution, association, government department, company, business and office that provides Internet access to its users or to its staff,” it says.

The second concern for LIANZA is that organisations may have their internet connection terminated over accusations of law breaches, without the allegations being proven.

BTW, it's always good to see emboldened and articulate librarians taking an independent stand and not passively accepting bad policy and bad legislation. Hopefully, this spirit that is alive and well at least in New Zealand and the USA will also come to Canada.

Meanwhile, Michael Geist has pointed to a Times article indicating that the push to three strikes is out in the UK.

As the American and Canadian RIAA and CRIA litigation have shown, information from record companies about alleged so-called piracy is notoriously unreliable. It is inconceivable that they be given any power to unilaterally force the termination of internet service to anyone.

Hopefully, we will see the end of any further movement to "three strikes", would makes IPSs (however they may be defined) liable from all sides, obliterate the presumption of innocence, and put unprecedented and unchecked power into the hands of national record industry organizations , while depriving citizens of the protection of the courts for all practical purposes.

Hopefully, New Zealand will repeal this law before it takes effect.

HK

Vanocuver 2010 Olympic Games and London 2012 Olympic Games

The legal and practical difficulties of stopping people from using the English language as intended (e.g. "Visit Vancouver in 2010", or "See Ya at the 2010 Games") will be almost as much fun to watch as the the 2010 Olympic Games themselves.

Beware of using any two expressions in Part 1 of this Schedule or any expression in Part 1 with any expression in Part 2.

And, of course, the very word OLYMPIC is a "prohibited mark" by virtue of s. 9(1)(n)(ii) of our Trade-marks Act and is also locked up tightly by the legislation itself along with a lot of other surprising things here and here.

Be careful of using any words in such a way as I have in the bolded words of this blog entry.

Apparently, legislation similar to Canada's C-47 exists in England, and is being flouted far and wide. The idea behind these types of laws is to stop people from using certain "expressions" in such a way that the public might think that the business's wares or services are somehow endorsed by the powers that be or that there is an association between the business and the powers that be.

A lot of lawyers will be looking for gold medals for creative challenges to the expected excesses of VANOC concerning the Vancouver 2010 Olympic Games.

HK

McCullagh on MacBride

Declan McCullagh has a story on President Obama's appointment of a senior BSA enforcer to a senior position at the Deaprtment of Justice:

For his vice president, Barack Obama chose Joe Biden, a senator with a long history of aiding the Recording Industry Association of America. Then Obama picked the RIAA's favorite lawyer, Tom Perrelli, for a top Justice Department post.

Now, as one of his first official actions as president, Obama has selected the Business Software Alliance's top antipiracy enforcer and general counsel, Neil MacBride, for a senior Justice Department post. Among other duties, MacBride has been responsible for the BSA's program that rewarded people for phoning in tips about suspected software piracy...

Is there a pattern emerging here? If there is, will be soon see a balanced pattern?

There is some speculation that antitrust enforcement could stiffen up - which could help to establish balance.

HK

A Magic American Musical Moment

A wonderful and auspicious inauguration of President Obama today included a magic moment of chamber music from a diverse and stellar ensemble that we can only hope will give us more in the future. Perlman and Ma need no comment. They are stars of the highest magnitude. The impressive pianist was Gabriela Montero, a Venezuelan born American classical pianist. I particularly admired the clarinetist, Anthony McGill, who I've heard many times in his role as a co-principal at the Metropolitan Opera Orchestra. He's only 29 and is already one of the finest clarinetists I have ever heard - and I used to play this instrument professionally. In fact, as an orchestral player, he may well be the very finest. Here's an article about him in the NYT. He's about to leap from being a star to a superstar. I greatly look forward to hearing him as a chamber musician and a soloist. And he too happens to be an African American. There are still extremely few African Americans in the ranks of the major symphony and opera orchestras. Hopefully, this too will now change.

BTW, it's very difficult to play outside in cold weather. These artists made it seem easy.

And here's the performance of arrangement by John Williams of an Aaron Copeland arrangement of a Quaker song, Simple Gifts.

President Obama's good taste and America's capacity for excellence and beauty are an auspicious beginning for a new era.

PS - It turns out as confirmed by the NY Times that the artists were "faking" and doing a "Milli Vanilli" finger synching version of of their own recording done a couple of days earlier in anticipation of the cold weather. So, there was "magic" afoot in several senses.Frankly, that's fine - it was them synching their own recording and I was totally skeptical that they could play that well in sub zero weather. Or that they would take their Strads outside in those circumstances. At least they didn't flub any notes... ;-)

PS - The plot thickens. Apparently, they were actually playing according to AP but the sound wasn't amplified. Those nearby heard them live. The rest of the world heard the tape. That makes sense - and accounts for why the "faking" seemed so real. It's probably more evident on HD, but it looked good live on the computer CNN stream.

HK

Three Strikes Regime Strikes New Zealand

It seems that the Labour government of New Zealand has succumbed to entertainment industry pressure to enact a "three strikes" regime that would require ISPs to disconnect "three-peat" offenders.

The new provision, which comes into effect on February 29, 2009, begins thus:

“92A Internet service provider must have policy for terminating
accounts of repeat infringers
“(1) An Internet service provider must adopt and reasonably implement
a policy that provides for termination, in appropriate circumstances,
of the account with that Internet service provider
of a repeat infringer.
“(2) In subsection (1), repeat infringer means a person who repeatedly
infringes the copyright in a work by using 1 or more
of the Internet services of the Internet service provider to do a
restricted act without the consent of the copyright owner.

Here's the whole legislation.

The new provisions are being panned by the NZ media here and here etc. in reportage as a "lose - lose" proposition both for their unsound policy (presumption of innocence, anyone?) and here in an editorial concerning the political process that was used to get them enacted.

HK

PS - more today on the controversy here, including the role of IFPI (international counterpart to RIAA and CRIA) and the push back and request for delay of implementation by the ISPs, including their fear of suits from customers.

PS - In a pattern becoming increasingly familiar, there is evidence of much division and dissension on the "creator" and collective side.

Video on Proposed Term Extension of Sound Recordings in EU

Here's an outstanding video from the Open Rights Group on the European Commission's determination to ignore all the reliable evidence (including the work it itself commissioned from Bernt Hugenholtz et al) and push for term extension of sound recordings to 95 years. According to ORG, this would create a windfall for record companies and potentially provide negligible help and even harm to ordinary working session musicians - all at great cost to economic cost to consumers and a considerable encroachment on the public domain. There are lots of specific numbers here...

HK

Canada - EU FTA - Consultation Deadline January 20, 2009

A possible Canada - European Union (“EU”) Free Trade Agreement (“FTA”) is in the works. For whatever reason, the Government is calling it a “comprehensive economic agreement” and not an FTA. On December 20, 2008 the Canadian Government announced a consultation process.

There is an effectively hidden deadline to comment of next Tuesday, January 20, 2009.

There is a lengthy paper setting the stage for the many issues that could arise in these negotiations. There is a ten page discussion of IP issues.

The IP discussion does not explain the potential complexities and controversies that could arise. The Government of Canada expects a response from the pubic by January 20, 2009. This is somewhat astonishing, given the announcement of “consultation” only on December 20, 2009 - five days before Christmas. It is unclear why this extremely short deadline is in effect.

There is probably little awareness of the deadline. True, the notice was published in the Canada Gazette. But, as the late Gordon F. Henderson said, the best way to keep a secret in Ottawa can be to publish it in the Canada Gazette.

Considering the timing of the announcement just before the Christmas break, the focusing of attention on the forthcoming budget, and the coincidence of the one month deadline with the US Obama Inauguration events, the short deadline suggests that the Government wants this initiative to get as little attention as possible.

From an IP standpoint, there are some obvious opportunities and pitfalls depending on point of view:

1. The EU is has a life plus 70 year copyright term and is heading towards a 95 year term for sound recordings. The EU will clearly not harmonize downwards to meet Canada on this. Canada will be under great pressure to harmonize “upwards” to these lengthy terms. This would clearly be highly controversial in Canada.

2. The EU will doubtless press for quick Canadian ratification of the 1996 WIPO internet treaties, even though the EU has not ratified these treaties to date and has been claiming that such ratification is imminent for many years.

3. The EU is very aggressive on “appellations d’origine” or geographical indications. Does Canada want to take away the right of its cheese manufacturers, retailers and restaurants to sell domestic “parmesan” cheese, for example?

4. The EU has a very complex labyrinth of laws concerning parallel imports or “grey market” products. Essentially, they amount to a strong “Fortress Europe” regime to keep parallel imports out but such products are allowed to flow freely within the EU if they have been imported with the appropriate “consent”, whatever that may mean. If goods can flow freely between Canada and the EU, the EU will probably want Canada to drastically change its laws to tighten up the possibility of parallel imports into Canada because Canada could become a “back door” to Europe. This could prove costly for Canadian consumers, because IP has hitherto been essentially ineffective to block parallel imports of consumer goods into Canada, except for books. The EU is generally a very “high price” market for the types of goods that are subject to parallel trade, perhaps is large part because of its IP policies on parallel imports.

5. The EU has much more a much active antitrust policy and enforcement mind set and mechanism than Canada, and is extremely cognizant that IP rights are prone to abuse and other anticompetitive practices.

6. The EU will no doubt press for expanded ex officio border actions without Court orders that could interfere with legitimate trade and may not be necessary or desirable from a Canadian standpoint. This effort will no doubt be linked to ACTA.

7. The EU also has an unfortunate database protection regime, which has led to some bad results in terms of “extraction” of information. Whether the EU will press for this remains to be seen.

HK

Blame It All on Bowie Bonds?

There are some interesting stories being published blaming the current financial meltdown on - get this - David Bowie and his “Bowie Bonds” from about ten years ago. Here's The Guardian and here's the Rolling Stone and here's the Mirror story on which the others are based.

These bonds were an example of the “securitisation” of IP - whereby investors get income based upon a reliable royalty stream and the IP holder gets cash up front. The financier who takes credit for the Bowie Bond type of transaction is David Pullman of the Pullman Group in NYC. The original Bowie Bond issue generated about $55 million in 1997.

Transpose this idea of revenue generating asset (copyright) based bonds and magnify by several orders of magnitude to the mortgage backed securities that have fueled the current meltdown. That’s the gist of these articles.

Of course, it's silly to blame the current meltdown on the Bowie transaction. But the transaction was an important milestone in the road to the use of asset based securities. In fact, the use of IP in a much simpler way as collateral security is something that is also very important and could be used to convince nervous lenders to give credit these days to a wide range of companies that need financing - NOW.

Nortel , which has just filed for bankruptcy protection and has an extraordinary portfolio of IP, might want to think about this, if it hasn't yet done so.

In fact, I have done a lot of work for the late lamented Law Commission of Canada as their advisor on security interests in intellectual property, which resulted in a book on the subject which I edited and to which many including myself substantially contributed. The book, which is international in scope, is still available here.

HK

Joel Fights Back & RIAA litigation live

The RIAA - once eager to use the courts to create a great chill about downloading and "making available" - is now trying to suppress publicity about its litigation. Doubtless because the litigation is turning against them.

The RIAA was unsuccessful in blocking live TV and subsequent web coverage of an important forthcoming motion on January 22, 3009 in the Tenenbaum case, where the defense is being led by Harvard's well known Prof. Charlie Nesson.

Here's the Court's ruling.

And here's the BMV v Tenebaum website named Joelfightsback.com

HK

On "strange things done in the midnight sun" of the public domain

NB - Note update below!

There's a good CBC article on the public domain quoting two of my favourite PD crusaders, Wallace McLean and Edward Guo of IMSLP fame (see here and here). BTW, IMSLP is back in action here.

All of this reminds me that an ever alert reader has pointed out that the website or Robert W. Service takes a different position than do I about the expiration of Service’s copyright in Canada. The site (now corrected - see below) says:

Copyright: We have had several people contact us on this subject. Service's work, in the United States, is in the public domain for that work published prior to 1922. In Canada, the copyright is still in effect and will be until 70 years after Service's death, or until 2028.

Mr. Wm. Krasilovsky, is attorney, agent for Robert's Estate. His email address is: bill@krasgrosslaw.com and his fax number is 212-983-3228

(Emphasis added)

The statement that “In Canada, the copyright is still in effect and will be until 70 years after Service's death, or until 2028” is simply dead wrong. Robert W. Service’s term of copyright expired in Canada on the stroke of midnight December 31, 2008. It may well be that “There are strange things done in the midnight sun” in Canada, but a life plus 70 copyright term isn’t yet one of them. The reference to 1922 in the USA is also wrong. It should be 1923.

I’m quite sure that the misinformation on the Robert W. Service website does NOT come from Bill Krasilovsky, who is mentioned as the attorney for the Robert W. Service Estate. Mr. William Krasilovsky is a very well known, highly regarded and very experienced New York lawyer and a co-author of “the bible” of America music law, namely “This Business of Music”, which is now into its tenth edition. A long time ago, this book was one of the key sources of my interest in copyright law. I still use it and highly recommend it for anything to do with the American music industry and as a very good overview of American copyright law. In fact, I reviewed the 7th edition of his book here. The book is readily available online from Amazon, etc.

The mistaken misinformation on the Service website illustrates, if nothing else, the great difficulties that can occasionally arise in establishing the clear coming out date of a dead author or a particular work. I wish Access Copyright luck in its public domain registry project, especially in view of the conflicting agendas of those who may wish to sew doubt into whether a work has indeed gone into the public domain. Over the years, there has been much litigation about the PD status of particular works in particular countries - because the question can sometimes be quite murky and a lot of money can be at stake.

One of these years, the many conflict of laws issues that are and will be arising regarding the legal reality of different copyright terms in different countries and the fact that the internet can make borders disappear will result in the call for a treaty to rationalize all of this. The trouble, of course, will be that there would be huge pressure to harmonize to the excessive US + EU + Disney® term of life + 70 years.

HK

NB - The information about copyright in Canada has now been corrected on the Service site, as well as the reference to 1922 in the USA, which is now correctly 1923.

Textbook Infringement

There's a very interesting story in today's Toronto Star about the copying of whole textbooks that are required by post secondary students for their courses. Naturally, one cannot condone such activity, especially if deliberately done for profit by a commercial copyshop.

However, what is most interesting about the article are the issues it raises concerning the economics of the college and university textbook market. There are over a hundred often very angry comments about teachers requiring the use of textbooks that change very little from year to year, but just enough to make it impractical to utilize a used version. These books are often very expensive, and for no apparent reason since some sell in very large quantities. One parent of a University of Guelph student reports spending over $2,000 a year on textbooks and expects to spend at least $10,000 on textbooks for the kid by the time he/she gets an honours B.A.

The Star suggests that many students are now commonly paying well over $1,000 a year for textbooks, some of which can cost up to $300 each.

Perhaps there would be less infringement if the cost of these books could be controlled. For example, university management and faculty might explore ways in which professors could be encouraged to use the most cost effective text that delivers sufficient quality. If relatively minor update material is required due to new developments in a field, it may be reasonable to encourage professors to provide it by way of a coursepack rather than requiring the purchase of a brand new edition. Even coursepack costs are quite high because Access Copyright demands $0.10 a page for much of the material that appears in coursepacks. The high cost is attenuated by the large copyright bureaucracies and copyright chill that are prevalent in most Canadian post secondary institutions. Access Copyright ("AC") has not yet had to face a contested hearing at the Copyright Board over this and other high high components of their license. For almost two decades, the AUCC has chosen not to go through with a Copyright Board hearing involving AC.

Last but not least, the whole area of textbook costs and the cost of books generally in Canada is something that the Competition Bureau might want to look at when it gets a new Commissioner who may be more proactive on IP matters than the outgoing one. Once again, anecdotal evidence strongly suggests that Canadians are paying more for less than Americans, with insufficient corresponding cultural benefits.

This also a problem in the USA, where there’s been a bill passed to deal with the issue, inter alia. See this discussion of H.R. 4137 which is now Public Law No: 110-315.

HK

Obama's Canadian Visit and Copyright

Michael Geist has beaten me to the punch on the subject of the forthcoming Obama visit to Canada. Naturally, copyright lobbyists in Washington and Ottawa will try to take full advantage of the occasion.

The Democrats have traditionally been even cozier with the entertainment industries than Republicans. Maybe the Dems like to party more. However, the Bush administration was extremely aggressive in its attempts to impose the DMCA on other countries, including the acquiescent John Howard regime in Australia. This is nothing if not ironic, given that Bruce Lehman, the father of the DMCA and the WIPO treaties under the Clinton administration, has now essentially all but disowned them.

Much may depend on whether Obama follows through on the unwise recent legislation that would appoint an IP czar that would, effectively, have cabinet level status. The last thing the new President needs in this economy for the foreseeable future is a cabinet secretary knocking on his door whining about how the sky is falling due to an absurdly expanded notion of “piracy” and how Canada and other supposedly rogue states should be dealt with under the US “Special 301" regime. Of course, he could equally as well appoint Larry Lessig - but don’t hold your breath. The best appointment for the foreseeable future for the czar position may be no appointment.

Specifically, Obama has proposed an interesting appointment as Associate Attorney General, namely Thomas Perrelli, a lawyer at Jenner & Block, who has been a key lawyer for the RIAA. While this may cause concern in some quarters, I have heard from some people on the other side of the fence from the RIAA who nonetheless speak very highly of him as a professional and are optimistic that he could bring an open and informed mind to this important position - which, of course, deals with lots of things other than IP.

Hopefully, President Elect Obama will give Canada the courtesy of full space and sovereignty on this and other issues to do what’s best for Canada, consistent with existing international law. And hopefully, Canada will do just that. That would be “change” that many in both countries would welcome.

By the way, while we all greatly look forward to this historic visit by this historic person, there should not be any excessive significance given to the fact that Canada will be his first official foreign visit. It has become something of a tradition that Canada will be the first port of call for a new U.S. President.

Prime Minister Harper and President Obama will have a lot to talk about. It is entirely possible and would not be such a bad thing, considering the state of the world now, that copyright does not even arise on the agenda.

HK

ET - The Perennial - and Libel Tourism

ET - the Perennial - is calling once again.

There’s a recent op-ed piece in the Wall Street Journal from a couple of American lawyers calling for a tough law that would impose statutory double damages for what they view as “sham” litigation libel awards in the UK. Specifically, they suggest “statutory damages” (sounds familiar?) "that amount to double any foreign judgment, plus court costs and attorneys' fees (in both proceedings) for good measure.”

There is admittedly a problem with “libel tourism” in the UK - and there has been as well in Canada for that matter. However, escalation is not the answer.

As a Canadian IP lawyer, I see our own courts starting to move more and more towards extraterritorial assertion (“ET”) of jurisdiction. The internet has invited this because information flows so easily over borders.

But what goes around can come around here - and the results will frequently not be either pretty or predictable. I think that there is great danger in escalating the issue with a blatantly and powerfully ET statute such as the authors suggest. What is probably needed is a treaty dealing at minimum with defamation law - but perhaps also with IP and even more generally. Personally, I think that the Americans have it largely right with defamation and the NY Times v. Sullivan rule - but one shouldn’t assume that US defamation doctrines will be embraced abroad. And I doubt that Americans would be sanguine about adopting the inevitably related European doctrines on the protection of privacy.

And BTW, those in glass houses should be careful about throwing stones. Just one example - the USA recently extradited an Australian on criminal copyright infringement charges - courtesy of the controversial cooperation of the former John Howard regime in Australia. This was very extraordinary if not unique.

HK

Kraft v. Euro -Excellence #2 Settled

The sequel involving the same parties to the 2007 Kraft v. Euro-Excellence case decided in the Supreme Court of Canada has been settled, according to a press release from Kraft, which describes this as an “important copyright case.” The press release says that “The Judgment is important as it supports the rights of owners of copyright in Canada to stop distributors from selling products without the consent of the owner of copyright in the product packaging.”

This, of course, is not correct. A consent judgment, which this was, reflects a settlement between the particular parties involved, which is usually made on a business decision basis. Such a judgment clearly affects those parties but does not have a legally binding precedential effect on the rest of the world. This particular litigation never really got off the ground and was at a very preliminary stage.

Kraft’s current theory following the 2007 Supreme Court decision is that calling a piece of paper an “assignment” rather than an “exclusive license” will enable the blocking of the parallel importation of chocolate bars and other non-copyrightable products based upon copyright in some element of the packaging or labelling. However, this strategy has not resulted in any reasoned decision blocking parallel imports to date in Canada.

In fact, any party now being sued for copyright infringement in respect of the parallel importation of legitimate goods based upon an “assignment” strategy involving an element of packaging or labelling should know that there are arguable defences available based upon such doctrines as copyright misuse, as explicitly mentioned and left open by the Supreme Court in its 2007 decision.

It is also quite possible, where appropriate, to convert any summary “application” brought by a plaintiff in these circumstances into a full-fledged “action” in order to ensure that all viable defences and counterclaims can be asserted.

My detailed comment on the 2007 Supreme Court decision can be found here. As I said in the conclusion of that comment:

Moreover, if lower courts are somehow persuaded to come to a different overall result than the one reached by the SCC, one can certainly expect pressure for an immediate amendment to restore the status quo ante of free trade and competition in the Canadian marketplace, unimpeded by assertions of copyright in mere elements of packaging material.

HK

IP in Canada - Year End 2008/New Year's 2009 Thoughts

Here’s my year end/New Year’s take on Canadian IP law, with a little international colour as it affects Canada. The action in Canada was mostly but not entirely on the copyright front.

First, the past year:

On the good news front from last year, we saw:

1. The election and installation of Francis Gurry, from Australia, as Director General of WIPO. This will hopefully restore focus, competence, integrity, leadership and relevance to this once world leading IP body. A stronger and better WIPO could help to attenuate the trends to bilateralism and secret negotiations by a limited number of parties (ACTA), both of which are potentially harmful to all but the most powerful countries.

2. The demise of Canada’s Bill C-61, which would have been a “made worse in Canada” version of the US DMCA.

3. The death, yet again, of the “iPod Tax”. The Copyright Board and the CPCC were decisively told for the second time by the Federal Court of Appeal that there can be no levy on “on digital audio recorders or on the memory permanently embedded in digital audio recorders” under the current legislation. However, the CPCC has many millions of unspent and undistributed consumers’ levy dollars to lobby for legislative enactment of such a “levy” - assuming that the music industry’s civil war over this issue doesn’t get in the way.

4. An instructive and important decision in Apotex v. Sanofi written by Justice Marshall Rothstein of the Supreme Court of Canada on the doctrines of anticipation and obviousness in patent law, upholding a trial decision by Justice Michel Shore of the Federal Court.

On the negative but still theoretically fixable front, we saw last year:

1. The rollout of, in effect, a new commercial music radio network in Canada paid for entirely by taxpayers without the occurrence of a CRTC hearing or a change in the Broadcasting Act. It is called CBC Radio 2. The “New 2" results from the purge and devastation of what was the former CBC Radio 2. One obvious effect of this will be significant additional expenditure by CBC to fund the apparently inevitable increased tariff payments to SOCAN, NRCC and potentially CMRRA/SODRAC of several million dollars a year due to the replacement of much public domain classical music of “dead, white European males” with that of living Canadian singer/songwriters and other commercial stuff that belongs on commercial radio. This will please the likes of SOCAN, CRIA, CIRPA, CMRRA, SODRAC and the Canadian Songwriters Hall of Fame, etc. Of course, if CBC Radio 2 ratings continue to plummet due to the bad programming that presents a “mix of music you won’t hear anywhere else” ™ (thank God!) , the rise in tariff payments may not be that much, if CBC is on the ball. Current CBC management is spending millions to advertise its new format that benefits these already subsidized commercial interests that also benefit from CanCon regulations. I understand that CBC refuses ATIP requests on the subject of advertising costs.

2. The secret pursuit of the still secret proposed ACTA treaty - which could result in serious interference with legitimate commerce and the inconvenience, invasion of privacy and even prosecution and confiscation of equipment from anyone carrying a laptop, digital camera, iPod, cell phone, etc. who has dared to download anything “illegal” in the eyes of organizations such as the RIAA. If the proposed ACTA isn’t really that scary, then why isn’t it transparent, like every other proposed trade treaty?

3. The continued victimization of tens of thousands of ordinary America music fans and customers by the RIAA - with things about to get even worse in some ways, if the RIAA succeeds in convincing ISPs to act as judge, jury and executioner against alleged repeat infringers with due process dictated by the RIAA.

4. The end of Bill Patry’s learned copyright blog, which was resuscitated momentarily in memoriam of Sir Hugh Laddie.

On the important, interesting and unpredictable front last year:

1. We saw the Federal Court of Appeal uphold a 2007 decision of Justice Roger Hughes of the Federal Court ordering eBay Canada to turn over the names of its “PowerSellers” stored on American servers to Canadian tax authorities. We don’t yet know whether leave to appeal will be sought from the Supremes. The trend to extraterritorial application of laws due to the borderless aspect of the internet seems inevitable but not necessarily desirable, especially for a relatively weaker country like Canada.

2. The Supreme Court of Canada declined to hear an appeal in the ringtones case, thus letting stand the Federal Court of Appeal’s decision that the provision of ringtones involves a communication to the public by telecommunication. If this is the final judicial pronouncement on this issue, we now have an obviously seriously increasing problem of multiple tariffs for the same transaction. Sooner or later, a legislative fix will be required.

On the sad front:

1. We saw the untimely death of the irrepressible and irreplaceable Sir Hugh Laddie, whose influence was global. He would have continued to have a major effect on the future of IP had he not passed away so tragically soon at the age of 62. Hopefully, his legacy as someone who knew how to make the IP system work for owners as a barrister (he invented the Anton Piller order) and to make it function fairly as a judge, and to push, as a professor and scholar, for a truly balanced IP system that didn’t simply pander to the excessive greed of corporate IP owners will live on. He was one of a kind - both as a person and as force in the law of intellectual property.

Now, for 2009:

1. Even after lengthy delays, we still await some important decisions from the Copyright Board, including the K-12 educational reprography tariff (heard in 2007) that could set the stage for what Access Copyright presumably hopes to be a massive increase in rates for the post secondary institutions. If the Board believes that it has sufficient evidence, it may follow up on the fair dealing implications of the 2004 CCH decision by the Supreme Court of Canada by greatly reducing the amount sought by Access Copyright. We also still await the result of the January, 2008 hearing in which SOCAN sought to greatly increase the cost of background music provided by background music suppliers.

2. Once again, there is unlikely to be closure on SOCAN’s proposed Tariff 22 for music on the internet, which was first filed in at the Copyright Board in 1995 (right after the birth of Netscape). The latest decisions of the Copyright Board on quantum were released in two phases in late 2007 and late 2008. These decisions also raised a number of legal issues and are the subject of several pending judicial review proceedings in the Federal Court of Appeal.

3. The WIPO Standing Committee on Copyright and Related Rights (SCCR) still seems to be adrift without a direction, or a helm. The proposed broadcasters’ rights and audiovisual works treaties remain on the agenda, but are unlikely to go anywhere soon. New efforts to focus on more urgent issues such as limitations and exceptions and particularly a treaty for the rights of blind persons have yet to result in much concrete progress.

4. Canada waits to see whether there will be another copyright reform bill in 2009. For those outside Canada who may not be aware, we currently have a unique political situation consisting of a minority government with an insecure hold on power that has just prorogued (i.e. suspended) Parliament until January 26, 2009 right after a controversially called election and during the worst economic crisis since 1929. One would think that, in these circumstances, the Government may be reluctant to introduce any copyright bill, especially one similar to the now dead Bill C-61 that was so controversial. However, if the Government has the resolve and is prepared to risk significant political capital in this milieu, it does have the opportunity here to present a very different bill that could contribute to an economic stimulus in many concrete ways that would be a win/win for all reasonable parties. But there are a small number (less than a handful) of parties with very self-interested agendas that are not likely to be reasonable, based upon past experience. So, unless the Government is prepared to say no to the excessive demands of these parties, while accepting the occasionally reasonable items on their wish (or should I say demand) lists, any bill at this time is likely to result in much acrimony, distraction, and use of limited parliamentary resources, with little chance of success - an unwelcome scenario except perhaps for lobbyists who get paid by the hour or those whose jobs are dependent on achieving particular results. There is also potentially insufficient time for Parliament to deal thoroughly and fairly with a major copyright bill, since an election could happen at any time and realistically may well happen in the fall of 2009.

5. Whether or not there is a copyright bill, we will see much debate about fair dealing. This could in the context of the forthcoming Copyright Board decision on K-12 reprography, the issue of satire and parody which is now before the Court in BC, and in post secondary education. We are now off to a good start on latter, with the release of this very useful advisory from CAUT, which will hopefully get AUCC and CARL to take stronger stances in favour of users, whose interests they ultimately represent.

6. We await Access Copyright’s Public Domain Registry, announced with great fanfare in 2006. A further announcement that it was in the beta testing phase was made in early 2008.

7. We await the outcome of several proceedings at the CRTC that could, for better or worse, result in some form of Government regulation of the internet. The issues on the table include Canadian content, a “levy” on ISPs, and “net neutrality” or throttling. The latter issue is really important and the CRTC has so far gotten off to a disappointing start with a sometimes sparsely reasoned decision that has maintained, for the time being, the status quo of greatly degraded duopoly controlled internet service barely better than dial-up in many ways with very high prices for most Canadians. Given the complex, anti-competitive and conflicting interests of the dominant ISPs in producing and/or distributing content, the connection with copyright and antitrust law is important.

8. We await with interest the appointment of a new Commissioner of Competition, and what his or her attitude will be to enforcement of issues involving IP. The successor to the outgoing Commissioner, Sheridan Scott, may prove to be more proactive with respect to IP related and other basic antitrust issues - particularly involving telecommunications, broadcasting, media ownership and other IP sensitive fronts, on which the Bureau has been largely invisible and presumably inactive for several years. Hopefully, the Competition Bureau and the CRTC can keep each other on their respective toes and compete for excellence in serving the public interest - something like what we sometimes see in the USA with the FTC, DOJ and FCC. Such inter-agency competitiveness would not necessarily be a bad thing in Canada. It could happen with the right new Commissioner at the Bureau. This will be a very important appointment.

9. We will see some significant changes in the membership of the Copyright Board. In the next months, the second and final terms of two of its members (including the Vice-Chairman) will expire and two other members (including the Chairman) will be up for reappointment for a second term.

10. We will see a new head of the Canadian Association of Broadcasters, which is, next to SOCAN and its predecessors, the oldest copyright lobby organization in the country. There could be change in leadership at one or more other prominent trade associations.

On the Wish List Front for the New Year:

1. Now, more than ever, would be the time to constitute a judicially led commission to look at certain seemingly intractable problems in Canadian copyright law, such as issues arising from Canada’s unique proliferation of collectives and their oversight (or lack thereof in certain respects) by the Copyright Board. At the same time, such a commission could deal with certain perennially difficult issues involving patented medicines and generic drug litigation. These Notice of Compliance (“NOC”) cases are consuming an inordinate amount of the time of the Federal Court and the Federal Court of Appeal. The system is costing the Canadian health care system billions of dollars because of less than optimal public policy choices and litigation costs that are doubtless being passed along to the public. These issues involve sufficient billions of dollars each year to rank as “infrastructural” in importance. Since we can expect little from Parliament on these types of issues for some time, investment in such a commission would be an efficient, strategic and politically smart step towards essential infra structural policy reform. Its recommendations could make the job of any Government willing to confront tough IP policy issues much easier and more productive in the future.

In conclusion

Happy New Year, everyone. Whether we like it or not, we are living in changing and challenging times.

HK

Public Domain Day 2009

The ever redoubtable and incorrigibly public-domain-loving Wallace McLean has once again augmented the database of copyright expired luminaries ranging this year from my fav Robert W. Service of the Class of 1958 (a Brit so it seems, though we think of him as Canadian) to American cartoonist E. C. Segar (creator of “Popeye”) of the Class of 1938.

Now, I ask once again, when we may expect Access Copyright's Public Domain Registry, which was proudly announced in 2006 and has now in 2008 supposedly made it to beta testing.

HK