SOCAN's Quest for a new "Making Available Right" Tariff at the Copyright Board in the Post ESA v. SOCAN and Post Bill C-11 World

As anyone who is interested in Canadian copyright knows, the Supreme Court of Canada ruled on July 12, 2012  in the decision in ESA v SOCAN  at the able behest of Barry Sookman that the “communication” right did not give rise to a separate right upon which the Copyright Board could certify a tariff with respect to the delivery of digital files of music for permanent download over the internet, i.e. the there could not be a valid tariff for the delivery of copies of works which were substitutes for the distribution of physical hardcopies on which performance royalties were not payable. As the Court stated:

[43]  In our view, therefore, the Board’s conclusion that the Internet delivery of a permanent copy of a video game containing musical works amounted to a “communication” under s. 3(1)(f) should be set aside.

The SCC was explicitly concerned with technological neutrality, avoidance of “double dipping” and ensuring that collectives and tariffs serve to enhance economic efficiency rather than impede it. The decision was based upon the statute in effect before Bill C-11 became law. The decision can be expected to have a profound effect on the increasingly complex layering and multiplicity of tariffs and collectives that had been occurring in Canada.

SOCAN is now taking the position that the new “making available right” (“MAR”), as SOCAN calls it, found in Section 2.4(1.1) of the Copyright Act now in force in the form of amendments resulting from the Copyright Modernization Act that came into force on November 7, 2012 creates a new right and warrants a new tariff.

The Copyright Board has called for submissions on this issue and SOCAN has now filed its memorandum of submissions and the expert opinion of Mihaly Ficsor. These are being posted now because of the important public interest aspect of this case.

To quote from SOCAN’s submission filed today with the Copyright Board:

SOCAN’s position is that, as a result of new section 2.4(1.1), Internet music services are liable to SOCAN when they post musical works on their Internet servers in a way that allows customers to have access to them from a place and at a time chosen by each customer, irrespective of whether the musical works are subsequently transmitted to end-users by way of downloads, streams or at all.

There are many interesting issues here. However, SOCAN will have to deal with the majority ruling in the ESA decision that:

[41] In our view, the Court in Bishop merely used this quote to emphasize that the rights enumerated in s. 3(1) are distinct.  Bishop does not stand for the proposition that a single activity (i.e., a download) can violate two separate rights at the same time.  This is clear from the quote in Ash v. Hutchinson, which refers to “two acts”.  In Bishop, for example, there were two activities: 1) the making of an ephemeral copy of the musical work in order to effect a broadcast, and 2) the actual broadcast of the work itself.  In this case, however, there is only one activity at issue: downloading a copy of a video game containing musical works.

[42]  Nor is the communication right in s. 3(1)(f) a sui generis right in addition to the general rights described in s. 3(1).  The introductory paragraph defines what constitutes “copyright”.  It states that copyright “means” the sole right to produce or reproduce a work in any material form, to perform a work in public, or to publish an unpublished work.  This definition of “copyright” is exhaustive, as the term “means” confines its scope.  The paragraph concludes by stating that copyright “includes” several other rights, set out in subsections (a) through (i).  As a result, the rights in the introductory paragraph provide the basic structure of copyright.  The enumerated rights listed in the subsequent subparagraphs are simply illustrative: Sunny Handa, Copyright Law in Canada(2002), at p. 195; see also Apple Computer Inc. v. Mackintosh Computers Ltd., [1987] 1 F.C. 173 (T.D.), at p. 197.  The rental rights in s. 3(1)(i) referred to by Justice Rothstein, for example, can fit comfortably into the general category of reproduction rights.(emphasis added)

I won’t comment further for the moment, since I (along with most other active copyright counsel in Canada) am involved in this case. The first round of responses to SOCAN’s submissions is due April 5, 2013.

HPK

Don't Touch My Digital Junk: TPMs & Bill C-32 - Geist v. Ficsor

The great debate between Michael Geist and Mihály Ficsor over Bill C-32'a treatment of TPM’s and when and how they can be legally circumvented continues and, indeed, escalates.

The big issues include:

• Must C-32 address BOTH "access" and "copy" controls?
• Can there be a general exception for circumventing for non-infringing purposes, e.g. fair dealing?
• Should devices, software, or services that have substantial legitimate purposes be caught in the anti-circumvention net?

Prof. David Vaver points to links on both sides and suggests, quite correctly, that these materials are “mandatory reading” for all concerned. It’s too bad that David himself has not expressed his view on this debate, or other aspects of the Bill C-32 as far as I know. Hopefully, his decade at Oxford has not diminished his interest in Canadian copyright law and he will share his valuable insights before it too late for the public debate.

I do have some brief comments.

Mihály is a good friend and we have invited each other to important copyright conferences back in the 1990's. He is a major figure in the world of international copyright law and played a very significant role while at WIPO in the development of the 1996 WIPO treaties. I respect his decision since leaving WIPO to align himself with the IIPA and the key lawyers and law firms behind it. See here, here and here He is currently associated with Greenberg, Traurig, a powerful Washington law firm and the IP group led by Eric Smith, who is one of the key figures behind the IIPA.

The IIPA is the powerful Washington lobbying organization that is highly influential in the content of the notorious annual USTR “Special 301" report - which provides predictable and perennial negative commentary about Canada that our own Government says "lacks reliable and objective analysis". It includes the RIAA, MPAA, NMPA, BSA and ESA. But that’s another story and I have no reason to think that Mihály is involved in this aspect of IIPA’s work. He is not currently listed as one of the IIPA’s personnel.

To his credit, Mihály has been consistent on the issue of the need to provide both access and copy control protection for TPMs since his 2002 book. Indeed, there are aspects of his 2002 book I quite like but which may not suit the views the Canadian appendages of some of the IIPA’s major client/members, such as his vigorous insistence that remuneration from private copying must be dealt with on a national treatment basis both under the WCT and WPPT - i.e. both for authors and sound recording producers/performers. If Mihály is right on this point - and many in the Canadian government would agree with him - this is a real deal breaker for any form of “iPod tax”, since the "tax" would be almost exactly doubled and almost all of the hundreds of millions of dollars that would be collected - after paying for CPCC managers, consultants and lawyers, etc. - would leave Canada with almost nothing coming back in return. This would clearly not be good public policy. It would also be dreadful politics - a huge "tax on technology" with almost all of the proceeds leaving Canada. Subsidies, if absolutely need, would be far more efficient and far cheaper and could be kept entirely in Canada - though lawyers, lobbyists and collective managers wouldn't be happy for obvious reasons.

Michael Geist is also a good friend. He needs no introduction to Canadian or most foreign readers.

Anyway, back to TPMs.

Here is what the WIPO Copyright Treaty (“WCT”) says on TPMs, with similar language in the WPPT (producers and phonograms treaty):

Obligations concerning Technological Measures

Contracting Parties shall provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne Convention and that restrict acts, in respect of their works, which are not authorized by the authors concerned or permitted by law.

(Emphasis added)

As for his position on TPM’s, Mihály goes on at great length about the meaning of “adequate” and “effective” and “adequate and effective”. These are words - especially the word “effective” - that have little if any intrinsic or precise meaning in international IP law. In particular, the word "effective" refers to “procedure” (i.e. "remedies") - not substance. Canada will provide more than “adequate legal protection” and very “effective legal remedies” if we take an approach of permitting exceptions for non-infringing activity and provide only for copy control and not Orwellian and para-copyright “access control”. There is nothing in the treaties that requires protection of devices that are capable of substantial non-infringing legitimate uses.

The reason I say this is that I was asked to research the meaning of “adequate” and “effective” and “adequate and effective” in the context of the US Grokster case in the US Supreme Court. I co-authored the attached brief for a major amicus curiae, which showed, inter alia, that the word “effective” is used in TRIPs and otherwise to refer simply to procedural and not substantive matters.

Treaties should normally stand on their own without minute analysis and recourse to “preparatory work”, just as national laws, at the least in the case of Canada, will not normally require recourse to domestic legislative history, much less to treaties, in order to be interpreted by national courts. If the Canadian law is clear, it will be assumed to be consistent with the treaty that required its implementation, and that treaty will normally be interpreted, if the court even looks at it, at face value.

It's true that one can have recourse to the preparatory work that goes into treaties under certain circumstances set out in the Vienna Convention on the Law of Treaties:

Article 32

Supplementary means of interpretation

Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31:

(a) leaves the meaning ambiguous or obscure; or

(b) leads to a result which is manifestly absurd or unreasonable.

It's not clear that such recourse is needed in this instance, but if it were, it would probably help Michael more than Mihály. For example, the early versions of the treaty language were replete with references to "devices" of which "the primary purpose or primary effect of which is to circumvent any process, treatment, mechanism or system that prevents or inhibits any of the acts covered by the rights under this Treaty." See here. Earlier versions of Article 13 of the WCT, which eventually became Article 11, contain language prohibiting devices that clearly isn't in the final text, incdicating the rejection of such an approach. Both Michael and Mihály rely heavily on the Vienna Convention to make their cases. Can they both be right?

What seems clear is that, for reasons that are not apparent, the Government is using language in Bill C-32 similar to that which was specifically rejected in the WIPO treaty making process - i.e. re "devices".

While David Vaver may be right that the wording of the treaties is hardly “pellucid” on this question, it is sufficiently lucid to have at least a clear base line meaning. The whole point is that Canada need not implement beyond that base line, unless it so chooses. And it would seem axiomatic that such meaning must be consistent with the normal canons of what constitutes “copyright law”. Otherwise, Canada and presumably most other countries had no mandate to sign such the WIPO treaties in the first place. Moreover, countries such as Canada with constitutions that specifically refer to “copyright”, may face constitutional challenges if they attempt to implement provisions that go beyond any reasonable conception of “copyright” law. For example, it’s one thing to prevent “copying” of a locked DVD in order to deter commercial piracy. It’s quite another thing to prevent “access” to viewing such a DVD simply because it was sold in India, sent here as a gift, but not region coded for Canada. Indeed, Heather Mallick makes this very point here in an excellent Toronto Star article.

Would we tolerate a law that prevents even the very “reading” of foreign printed books? Or the very “viewing” of foreign films? Would anyone say that this is law in relation to copyright? No - because it has nothing to do with “copying” and everything to do with restraint of trade, monopolization and perhaps even being an "an instrument of trade control not contemplated by the Copyright Act" in the words of Justice Fish of Canada’s Supreme Court in the Kraft decision.

I am not impressed by pointing to other countries such as Australia that have implemented these treaties in a manner more less dictated by the U.S.A. The Australian decision to toss out an earlier version of WIPO implementation that featured only "copy control" and to embrace a version dictated by American trade negotiators was controversial and the government of the day paid the ultimate price for this and other examples of following American direction contrary to Australian interests. There are many excellent aspects of US copyright law - but the TPM measures of the DMCA are not among them. For reasons that are unclear, Canada’s proposals as they now stand are even more restrictive and harmful to consumers and even to creators themselves. Again, see Heather Mallick, who is hardly alone in being both. At any rate, Michael Geist's analysis points to several countries, including Japan, Switzerland, and several EU members that have minds of their own and availed themselves of available flexibilities under the 1996 WIPO treaties.

All in all, an approach such as that advocated in the Liberal Government's Bill C-60 would seem to be not only wise but perfectly safe in terms of international trade law, not that there is any foreseeable risk or indeed any mechanism for a trade-challenge on this issue as international law currently stands. While I am in no way advocating the adoption of a Canadian law in contravention of the WIPO treaties, it should be noted that they curiously contain no dispute resolution mechanism. This is ironic, since the US efforts to undermine IP multilateralism make any revision of the WTO TRIPs agreement, which could conceivably bring the 1996 WIPO treaties into a dispute resolution arena, very unlikely in the foreseeable future. It is further ironic because the USA has deliberately shirked its obligations respecting moral rights under Berne Convention by managing to get them exempted from dispute resolution under TRIPs.

I am assuming that Prof. Geist’s interest in this issue is purely academic and independent and not funded by any commercial interest. His recent book chapter did get funding from the usual academic sources, which have no commercial strings attached.

Mihály’s "interest in the Canadian experience" and his recent lengthy writings about it, which are frequently relied upon by Canadian lobbyist Barry Sookman and his junior associate, Mr. James Gannon, are also said by Mr. Gannon to be "purely academic".

HK