Craig Parks on Canada’s Copious Collection of Copyright Collectives

Canada’s Copious Collection of Copyright Collectives is the subject - though not the title - of Craig Parks’ study on collectives commissioned by Canadian Heritage, which was released in August, 2007 after an apparent 10 month delay for translation and perhaps other bureaucratic reasons. I was going to comment on it back in August, 2007 when it was belatedly released, and I drafted my posting but forgot to post it. So here’s my belated comment.

Although the report appears rather lengthy, most of it consists of known tombstone data, descriptions, and facts about Canada’s approximately three dozen collectives. There are some additional details, such as the names of mid level staff members of various collectives - but this is not particularly useful information. Most of the important factual data can be already found at the Copyright Board’s website, for example - here, which provides links to the collectives that do have websites. The Board’s website is actually very useful for many purposes, including access to Canada’s copious collection of copyright collectives.

The report does state the obvious overall question at page 8:

At first glance, there are many collectives operating in Canada. But are any redundant?

At page 45, the report concludes:

On the issue of the multiplicity of collectives, the complaints seem to be grounded in “optics” rather than reality. Thirty-five collectives merely appear to be too many.

The report has no comparative component. It does not look at the USA, which has for all intents and purposes only about half a dozen collectives (that is to say about one sixth of the number as compared to Canada). Or the UK, which has far fewer than Canada. Or Europe, where the collective movement was born and where the EU is determined to impose some efficiency.

True, there is some duplication between English and French language collectives. But this does not explain the numbers. We are still left wondering why Canada has more collectives than any other developed country. Daniel Gervais, who knows a lot about collectives (he worked for them for many years) and who has recently published an excellent book which the Parks study doesn’t even refer to, has told me that we are in fact outdone only by Brazil. Now we do know that Brazil does well indeed in soccer and regional jets. But I’m not so sure we should emulate them in respect of copyright collectives.

Other problems with the study are these:
• No discussion of the history of collectives in Canada, and in particular of the important legislative changes in 1988 and other major historical events, such as the merger that resulted in SOCAN in 1990 (much to the consternation of most “serious” composers in Canada ever since).
• No discussion of the considerable role of Government - at the both the Federal and Provincial level - of encouraging and propping up collectives with various forms of direct and indirect subsidies at the taxpayers expense.
• Inadequate discussion (about 6 lines) and no specifics about the “cultural fund” option, which is widely used in Europe and which enables, for example, SACEM in France, to set aside 25% of its private copying levies for cultural purposes. Such funds could be used to keep a substantial portion of money in Canada to benefit truly deserving and/or needy Canadian creators. Contrary to what the report says at p. 13, most collectives in Canada oppose the cultural fund concept. I do not consider “seminars, workshops and other initiatives to assist members in their understanding of their business and craft” to be an example of a “cultural fund” expenditure. The only Canadian semblance of such a fund of which I am aware is the SOCAN Foundation, not mentioned in the report, which operates on the basis of a modest capital endowment set up at the time of the merger between CAPAC and PRO Canada and a very modest contribution of just over 0.5% of SOCAN revenues or 2.8% of SOCAN expenses, as most recently reported. (I am not criticizing SOCAN here - something is better than nothing).
• No discussion of the internal economics of collectives and how they can greatly benefit a handful of consultants, lawyers and senior employees but often do comparatively little or nothing for actual working creators who are not already rich and successful to begin with. It would be very interesting to know the average and median distributions to individual members of the major Canadian collectives. To its credit, SOCAN, which is by far the most transparent of Canadian collectives, now publishes “average distribution” per writer/composer. The median figures would perhaps be even more interesting.
• No discussion of the potentially very useful role envisaged by Parliament for the Commissioner of Competition in Copyright Board matters and her apparent total failure and that of her predecessors to exercise it.
• Cursory discussion at page 19 of the problems with Copyright Board proceedings. Some - though by no means all - of the issues are mentioned, but there is little by way of analysis or example.
• An unsubstantiated and non-specific opinion that some of the areas in which the Board might be more active, such as oversight of the actual inner workings of collectives, would require amendments that “might in turn give rise to constitutional challenges.” Examples, please? We need to know how far the Board can go - and in my opinion, it can go quite far even without amendments. It has ventured down this road already, and been upheld by the Court - which the report does not mention. And I fail to see why legislation giving even more oversight power over collectives would not be constitutional. To suggest otherwise without further explanation is not helpful to the many rank and file members of collectives who would like to know that someone has the power to do something about their interests.
• An overly simplistic analysis of why Board proceedings are so expensive, with a good measure of “blame the victim”, i.e. the objectors, in the brief discussion.
• Almost no reference to judicial review or to the role it plays vis a vis the Copyright Board.
• Little or no reference to specific areas where the enactment of regulations - either by the Board itself or the Governor in Council - could help.
• No bibliography, literature, and almost no case citations.
• Last but not least, virtually no discussion of the public interest and the manifest failure of the system to allow public interest advocacy to be effective. For example, should the Board should be given the explicit mandate and responsibility to take on a real inquisitorial role on behalf of the public interest? There is a two line mention that “cost recovery” was considered in 1999 and dismissed. A cost recovery regime - cf. CRTC - has considerable potential to help serve the public interest. But it seems to be of no interest to the Board. Or to the author of the report. We still don’t know why not.

Some of the point form discussion about specific collectives is either too perfunctory to be useful, wrong or both. For example, concerning the CPCC, the report says that the benefits from the user’s perspective include:

- regime permits home copying without threat of copyright infringement actions
- tariffs certified by the Copyright Board reassure users of their fairness
- simple reporting system requiring manufacturers and importers to report sales in Canada on a bi-monthly basis

On the first point, what about BMG v. Doe, and the so far failed (partly due to yours truly) efforts and ongoing assertions of CRIA (a major stakeholder in and lobbyist for the levy scheme) that downloading is illegal?

On the second point, how fair is it to impose a $0.21 “tax” - as virtually all Canadians regard it - on hundreds of millions of CDs that will be used only for data back up in businesses, copying of photos and countless other uses that have nothing remotely to do with the private copying of music?

On the third point, it would seem that the author of the report has not interviewed any of the many unhappy targets of a CPCC audit. The audit powers of the CPCC - even before they were recently beefed up by the Board - would make CCRA and the RCMP envious in many respects.

(Disclosure - I regularly act against the CPCC).

We have about three dozen collectives in Canada collecting something approaching half a billion dollars a year. It would have been very useful for the report to include the amounts collected by each of them in some organized chart format, at least from the few collectives that are sufficiently transparent and willing to provide this information. Those that are not should have been named.

My main concern with this study is that is a lost opportunity to address some really important issues. This may not be the fault of report’s author, who may well have given the Department what it asked for, i.e. to “identify the advantages, issues and problems....”

However, identifying these things is the easy part. Anyone even passingly familiar with the copyright world in Canada already has long ago identified the “ the advantages, issues and problems” with collectives, and the issues involving the Copyright Board as dealt with in this report and many that aren’t even mentioned, perhaps because they are too politically sensitive.

What we need is a specific diagnosis of the problems, their causes, and concrete achievable recommendations on how to fix them. Unfortunately, really serious and recurring issues are dismissed with little or no analysis. For example, regarding the level of fees, the report simply concludes:

In my view, these complaints must be taken with a “grain of salt”, as it is as much a natural inclination to complain about fees as it is to complain about taxes. In the case of most copyright fees, however, the fee is either set by the Board after due deliberation (including taking into account the economic impact of a tariff on users) or negotiated in good faith by the parties. In the latter case, if the parties reach an impasse, the user may always refuse to pay the asking price and let the courts settle the matter by way of damages.

If the user submits that a particular activity qualifies as “fair dealing” or is exempt under the Copyright Act, and the administrative or judicial body rules otherwise, legislators can be lobbied for legislative change.

If the report was meant to set the stage for further analysis, then it has added little if anything to what was already known, and has only delayed and not further defined the real hard work. Because it has no normative component and essentially describes and rationalizes the current lay of the land, it may be seen by some policy makers and collective interests as a vindication of the status quo, which would be regrettable.

This report only confirms my belief, often stated, that we need a judicial commission to enquire into the Canadian copyright system, with an adequate budget, staff and terms of reference to get the job done and to issue a fully reasoned and documented report in the tradition of Justices Parker, Ilsley, and the Economic Council. Such a commission should take a particular interest in the area of collectives and the Copyright Board, though there are lots of other difficult areas that have nothing to do with collectives or the Board. Perhaps such a Commission could in turn “commission” a balanced set of studies of the quality of those that emanated from Consumer and Corporate Affairs (predecessor to Industry Canada) in the late 70's and early 80's, or the late Gordon Henderson’s report on the litigation system published in 1991, with which I was closely involved. These were substantial and influential contributions.

The apparently ad hoc current program of studies commissioned by the two departments has on the whole produced disappointing results compared to previous departmental studies. This is regrettable because many of these studies have become lost opportunities. They may “occupy the field” rather than pave the way for further departmental research, and may result in delay or unsatisfactory results in the ultimate quest for satisfactory copyright law reform in Canada.

It seems that Mr. Parks has been commissioned by Canadian Heritage to do more work, to wit:

Study Title: Music Copyright Management (update of 2002 project)
Prepared By: Craig Parks
Expected Completion Date: November 2007
Summary: This study will analyze the relationship between various parties involved in the production and distribution of sound recordings in Canada

HK

How NOT to write a C & D Letter

Here is a letter to a lawyer who wrote a C & D letter that is allegedly protected by copyright and that purports to preclude publication of the letter itself. The result was precisely the opposite, since it was published and commented on at length by an advocacy group, namely Public Citizen.

There's even an oblique Canadian angle here.... read the above letter.....

Here is the website of the firm from whence the letter originated.

And here's the original C & D letter in which copyright is claimed....

Hat tip to Michael Carrier.

HK

Excessive Non Cents about "One Cent"

The Royal Canadian Mint and the City of Toronto are apparently engaged in heavy negotiations about the City’s “use” of the words “one cent” and an image of the Canadian penny in the City’s One Cent Now campaign. Now, as every IP lawyer should know, “use” is a word that must be used with great care.

According to the National Post:

...a spokesman for the city-led campaign, said the mint wants $10,000 for the use of the words “one cent” in the campaign Web site address (www.onecentnow.ca) and the campaign e-mail address (onecentnow@toronto.ca), and an additional $10,000 for using the words in the campaign phone number (416-ONE-CENT). The remaining $27,680 has been assessed against the city for the use of the image of the penny in printed materials, he said.

I wonder what feat of legal genius came up with the precise number of $27,680?

Now, far be it from me to meddle in others’ legal affairs, when I am sure that there must be numerous highly paid IP lawyers hard at work here, but I do visit Toronto now and then and I am a citizen of Canada, from whence the Mint derives its power to literally coin and print money - my money - paid from my taxes. I want to see it spent wisely. A penny saved is a penny earned.

Let’s take a look at the facts and the law here.

According to Wikipedia, which sometimes presents facts accurately, the Maple Leaf image on the coin in question dates from 1937, when it was created by one George Kruger Gray who died in 1943. In any event, s. 12 of the Copyright Act would put the image into the public domain no later than 50 years from creation, namely in 1987, assuming that the Mint, in 1937, was an emanation of the Crown under the direction and control of His Majesty, as Her Majesty then was. And even if that isn’t right for whatever reason, any possible copyright that Mr. Gray could have had would have expired and gone into the public domain no later than 1993, fifty years after he expired.

Game over on the copyright claim.

Even if there is copyright involved, which seems implausible, the lawyers involved should look at the wonderful Allen v. Toronto Star appellate decision from the Ontario Divisional Court case from 1997 - about how incorporating one work into another is not necessarily actionable reproduction of the first and may be fair dealing as well. That was about including the picture of Sheila Copps on a motorcycle included in the front cover of Saturday Night magazine as part of a news article in the Toronto Star.

It’s true that this image of the back of the penny was “advertised” (i.e. effectively “registered” for non TM lawyers) as an official mark as of June 2, 2004.

Now official marks are not quite the same as trade-marks. They have both more and less punch, depending on a number of factors. However, in light of the recent Supreme Court of Canada jurisprudence about attempting to use trade-marks law to extend the monopoly rights from an expired patent, i..e, the Lego case, I doubt that the Mint would get far with their "official mark" here.

Frankly, I can’t see how this official mark is going to get the mint anywhere in this instance, especially since the City of Toronto arguably hasn’t “adopted” the mark as a mark...it’s just showing a picture of a penny.

As for the claim to the use of the term “one cent”, gimme a break. It’s not covered by whatever mileage the Mint could get out of the official mark advertisement, because the case law and blatant common sense says so.

I hope that the lawyers working on this are having fun. A penny for whatever legal thoughts may be operative or inoperative in respect of asserting or not being able to get rid of these claims and whether taxpayers are being well served paying for all this fun would be greatly appreciated.

A little common sense should prevail. And if this case goes to Court, it may well bring some further sense to the sometimes twisted distortions of the “official marks” provisions of the Trade-marks Act, that the Canadian Olympic Association above all has used to go further, faster and higher (or doubtless lower in the eyes of many of the defendants it has sued) to squeeze every last cent possible for the COA from large and small businesses alike.

Unless I’m missing something, the only reason that I can think of for the Mint to be taking its present aggressive position over one penny is that it is trying to recover the loss of the all of those 129 pennies paid in reimbursement for a package of gum to the Hon. David Dingwall, former President of the Mint, who coined the immortal phrase that worked such wonders for the Liberal Party - “I am entitled to my entitlements.”

His entitlements indeed included $417,780 in severance - but I don’t know whether the gum was included or not in the final calculation. Or whether that figure has been rounded off to the nearest dollar.

Maybe this is the Mint’s real revenge and inCENTive.

Sorry... :-(

Anyway, that's my two cents' worth.

HK

Excessive Damages: Less than 2 CDs = More than One House

Ars Technica and countless others are reporting that a jury in Minnesota has just awarded damages of $222,000 against a young native American single mother of two kids for downloading and "making available" 24 songs.

Duluth, Minnesota — After just four hours of deliberation and two days of testimony, a jury found that Jammie Thomas was liable for infringing the record labels' copyrights on all 24 the 24 recordings at issue in the case of Capitol Records v. Jammie Thomas. The jury awarded $9,250 in statutory damages per song, after finding that the infringement was "willful," out of a possible total of $150,000 per song. The grand total? $222,000 in damages.

That's $9,250 per song. That's more than 12 times the amount of the already absurd $750 "minimum" statutory damages award under US law. (In Canada, it's $500).

That's 9,343 times the so-called "normal" retail price of $0.99 each for the 24 songs, only a portion of which would be actual damages to the record companies.

That's cost of lots of peoples' houses.

RIAA arithmetic is this:

Less than 2 CDs worth of music = As much or more than many people's houses.

This a dark, draconian and disgusting day for the copyright system.

The statutory damages provisions of the US Copyright Act were put in place long before multiple downloads from a celestial jukebox were ever envisaged and were never intended to be used against ordinary people for ordinary activity.

Let us hope that Congress does something about this and that Canada ensures that such an outrage can never happen here.

When civil copyright infringement where no real damages can be proven becomes more punitive than medical malpractice, defamation, injuries inflicted by drunk drivers and other truly serious civil causes of action, there is something very wrong and very unsustainable in the legal world.

This is not about deterrence. It's about perverse and outrageous enforcement of a bad law for bad reasons with bad results that will be bad for everyone, no matter what their interest may be.

While the RIAA lawyers may be drinking very expensive champagne tonight, paid for by musicians, single mothers, and many other unwilling contributors, there will likely be side effects and hangovers galore starting tomorrow. They should be careful what they wish for.

To begin with, early reports and comments from a leading US downloaders' defense lawyer, Ray Beckerman, indicate that the judge's charge to the jury may have been quite erroneous, based upon RIAA submissions that the judge accepted concerning the law on "making available", etc. Hopefully, the appeal process will work.

So - add a 30 single mother of two who works at at Indian reservation to cap off the list of 26,000 or so dead grandmothers, 12 year old girls in subsidized housing, university students, and other common folk who may or may not have even been correctly identified, and even if so, are likely guilty of nothing more than loving music.

Welcome to shock and awe, testosterone, and the RIAA way of thinking.

Coming soon to Canada, eh?

CRIA, the so-called "Canadian" Recording Industry Association. has tried to do this in Canada and so far has lost badly, due in some measure to yours truly.

CRIA will doubtless try to catch up with its American masters by convincing Canadian policy makers that "shock and awe" is cool in Canada too.

Let us hope that Canadian policy makers see the truly repulsive results that can happen when copyright lawyers and lobbyists have their way with the system.

Today, I'm saddened, embarrassed but mostly furious that copyright law can be used for such a revolting result.

Enjoy your champagne, RIAA, while it lasts. It hopefully won't last long.

HK

EU Court Upholds Microsoft Competition Ruling

From the EU Court of First Instance ruling today upholding Commission's large fine and its finding of abuse of dominant position regarding IP:

It is only when it is accompanied by exceptional circumstances such as those hitherto envisaged in the case-law that such a refusal can be characterised as abusive and that, accordingly, it is permissible, in the public interest in maintaining effective competition on the market, to encroach upon the exclusive right of the holder of the intellectual property right by requiring him to grant licences to third parties seeking to enter or remain on that market. It must be borne in mind that it has been established above that such exceptional circumstances were present in this case. (para. 691)

Here's a good article from the IHT.

Here's the CFI decision itself and the Court's press release.

And here's the response from Microsoft's top lawyer and Senior VP, Brad Smith.

It will be interesting to see if antitrust/competition law enforcement in intellectual property ever gets back on track in Canada.

HK

Otttawa Citizen on Copyright Lobbying

Deirdre McMurdy - who is a new face on the copyright journalism beat - though very experienced on related matters - is off to a very good start on the next revision round with an excellent article on copyright lobbying, in today's paper at the Canada Page 4 and here.

It is fairly detailed and well balanced - and even includes your's truly.

She concludes:

Whatever the results from the latest inter-departmental sessions and briefings, there are lots of sequels ahead. All of them coming to the big screen soon.

HK

Economic Value of Fair Use - Size Matters

A very important study by the CCIA on the economic value of fair use in the USA has just been released.

Here's Gigi Sohn's (Public Knowledge) take on it:

“CCIA should be congratulated for sponsoring this significant project. For years, the copyright industries have made their case for restricting the rights of consumers based on the argument that their industry makes a significant contribution to the economy that could be jeopardized by fair use rights.

“The results are telling. While the content industries claim employment of 11.3 million workers in 2005, the CCIA study found industries depending on fair use employed 17.3 million people in 2006. While the copyright industries claim to have generated $1.3 trillion (or 11.2% of Gross Domestic Product), the CCIA study found that fair-use industries generated $2.2 trillion in 2006.

“This report should guide policymakers and others who want to tilt further the copyright laws away from a reasonable balance between creators on the one hand and consumers and innovators on the other. The report presents a clear case that the harm to the economy could be more significant than previously thought by following a radical content industry policy that diminishes legitimate lawful use of copyrighted material.”

(emphasis added)

Couldn't have said it better myself.

HK

Joyful noise from the EU

EU Directive Limits Orchestra Loudness

By THE ASSOCIATED PRESS
Published: September 7, 2007 VIENNA, Austria (AP) -- Shhhh! Mute the brass, and please -- go easy on the cymbals! A European Union directive on noise abatement contains a provision that will limit the ''noise'' of symphony orchestras beginning early next year. While it's not meant to ban Beethoven's ''ba-ba-ba-baah,'' some musicians are worried overzealous enforcement could take the ''Joy'' out of the German master's exuberant ''Ode to ...''

And what does this have to do with copyright? Well - I'm glad you asked.

Given the way the EU can work, there could be a conflict between the noise abatement directive and deeply entrenched moral rights principles in copyright law. Some particularly noisy composer (no names) might well complain that his or her music isn't being played loudly enough.

And then we could have litigation, with one set of laws conflicting with the other and various directorates in Brussels engaging in noisy internecine turf warfare.

And we could have moral rights of performers who want to play louder (usually trombone and percussion players) pitted against those who want to play softer (e.g. clarinetists and violists) and in turn those of the composer...not to mention the conductor...And large orchestras have over one hundred performers...

And then there's the cultural diversity issue....

And it could all end up in the European Court of Justice...

And if you don't believe me about moral rights of performers, see Article 5 of the WPPT.

Maybe the answer would be a noise rights collective, that could deal in noise credits in a manner analogous to carbon credits and distribute the proceeds in a fair and equitable manner...

But I shouldn't give out ideas here... somebody in Canada may decide that another collective is just what we need... After all, we only have about three dozen now.

What fun copyright law can be!

HK

Breakthrough at the Copyright Board on architectural plans?

Mr. Justice Vancise, who is the Chairperson of the Copyright Board and a Court of Appeal Judge in Saskatchewan has presented what seems to be an annual tradition, namely a speech to IPIC in the latter’s copyright course given in August.

In this speech, Justice Vancise describes at length the Board’s activities concerning unlocatable copyright owners. Most of these files are very routine, and likely do not or should not (in my view) involve any significant time on the part of board members. The one decision where the Board members apparently got seriously involved (Breakthrough Films) is very problematic in many ways, which I’ve touched upon elsewhere.

Justice Vancise says that there will be an announcement soon about what the Board will do about architectural plans, when the architect cannot be located and someone needs copies of the plans from city hall. A very large number of the Board’s issued licenses where the owner is unlocatable (about 60 out of 206 or about 29%) arise from this situation. Apparently, the city solicitors in Ottawa and Calgary in particular will not allow copies of filed plans to be made for renovation or other construction work without either permission from the architect or a Copyright Board decision.

The Supreme Court of Canada held in 1971 that permission is not required to make copies of architectural plans in this kind of circumstance - because there is an implied right to use them and make copies for such purposes. The case is NETUPSKY et al. v. DOMINION BRIDGE CO. LTD. (1971) 3 C.P.R. (2d) 1 SCC Varying 58 C.P.R. 7 Reversing 56 C.P.R. 134.

The Court stated at page 7:

In the circumstances of this case, it is clear that the changes or modifications not only were not forbidden but were in contemplation at the time when the City of Ottawa and, through it, Dominion Bridge, its sub-contractor, became the licensee of Netupsky for the construction of its Civic Centre. Such a licence carries with it an implied consent to make the changes which Netupsky should have made and refused to make, and also, an implied consent to reproduce the plans in as many copies as might be necessary for the construction of the work.

While that decision may have been based upon particular circumstances, there is no reason to suggest that its overall principle would not apply generally.

If the city solicitors haven’t read this case or don’t read it the way I do, then the Copyright Board should issue a ruling once and for all going through the case law in order to make this problem go away. It is clearly a waste of the Board’s staff time, and an obvious source of significant costs and delays to anyone needing to do any building renovation or other construction work requiring old plans in Ottawa or Calgary. As anyone who owns a home or a building knows, delays cost money when work needs to be done.

It serves no useful purpose and can only promote considerable disrespect for copyright to invoke copyright law to delay the obtaining of copies of old blueprints to repair or renovate old buildings when the result will be long delays and great expense and the architect of the plans is no longer around and likely wouldn’t be entitled to any money or to deny permission anyway. There is an implied right of the owner of a building to repair or renovate that building, and the plans may be essential for that activity - for efficiency and even safety purposes.

Hopefully, this is what Justice Vancise has in mind. Such a change in Board practice would be better late than never. I have no knowledge of what the announcement will be - but I hope I’m right.

HK

Knopf v. Speaker of the House of Commons - the Appeal

Here's an update to the litigation in Knopf v. Speaker of the House of Commons, which I wrote about last year, when the Federal Court decision came out (wherein I lost).

The Appeal was heard yesterday, September 4, 2007 in the Federal Court of Appeal. Here's the Ottawa Citizen's report on it by Jack Aubry.

HK

Gambling on International Law and IP

It looks like Antigua has beaten the US Government fair and square and at the Appellate level of the WTO on the latter's prohibition of offshore online gambling. See the story here in NYT.

Apparently, the US got nailed on issues such as not treating foreign online gambling sites in the same way it treats its own. Sounds like "national treatment" to me, but I must say I haven't yet read the decision.

Here's the link to the WTO material to get started on this case.

The really interesting angle is that Antigua is threatening to retaliate by suspending its application to the USA of international IP law (i.e. the TRIPS agreement), since there isn't much else that Antigua could do that the USA would ever notice. According to the WTO site:

On 21 June 2007, Antigua and Barbuda requested authorization from the DSB, pursuant to Article 22.2 of the DSU, to suspend the application to the United States of concessions and related obligatins of Antigua and Barbuda under the GATS and the TRIPS Agreement. On 23 July 2007, the United States (i) objected to the level of suspension of concessions and obligations proposed by Antigua and Barbuda and (ii) claimed that Antigua and Barbuda's proposal does not follow the principles and procedures set forth in Article 22.3 of the DSU. At its meeting on 24 July 2007, the DSB agreed that the matter referred to by the United States be referred to arbitration.
(emphasis added)

This is potentially a really serious situation for the USA. See the comments in the NYT from serious experts like John Jackson and Charles Nesson.

And the USA is still flouting the WTO s. 110 ruling.

People who live in glass houses....

Is Antigua about to become The Mouse that Roared?

(which is one of the best movies of all times, starring Peter Sellers, Peter Sellers, and Peter Sellers)

Or another movie called Casablanca comes to mind:

Rick: How can you close me up? On what grounds?
Captain Renault: I'm shocked, shocked to find that gambling is going on in here!
[a croupier hands Renault a pile of money]
Croupier: Your winnings, sir.
Captain Renault: [sotto voce] Oh, thank you very much.
[aloud]
Captain Renault: Everybody out at once!

Or, maybe the USA will simply "Send The Marines"...


HK

More lost Billions and Billions....

The Institute for Policy Innovation has a new overwrought study about the billions and billions of dollars lost in the USA and worldwide because of "download piracy" and other sordid assorted evils.

Jon Newton has a good take on it here.

Where is Carl Sagan when we need him.....?

"Billions and billions...." of lost sales and lost dollars.....

Interestingly, the stats on pirate sales in and at retail prices seem to make Canada look rather well behaved by developed country standards.

HK

Piracy, Counterfeiting and Montebello Manifesto

As expected, there’s a whole lot of huff, puff and stuff about counterfeiting and piracy from Montebello.

I’m sure that it’s purely coincidental that there was a huge bust fake involving allegedly illegal DVDs announced today in Toronto.

And that Lucky and Flo are being honoured in Malaysia.

Turns out that Lucky and Flo can’t actually tell which DVDs are fake and which are real (never mind which are parallel imports) - which will also be a problem for many peace officers and customs officials (an maybe even some lawyers?), so we shouldn’t be too critical about Lucky and Flo. Besides, they are so cute.

It looks like the RCMP, OPP, etc . will be thrilled that they can now ask for awesome new resources to fight piracy and counterfeiting. And what normal peace officer wouldn’t prefer to raid flea markets than chase cigarette and drug smugglers carrying machine guns or even worse on speed boats in the dead of night?

In all seriousness, there are some issues here.

• Pirate and counterfeit goods are much more brazenly sold on the streets in mid town New York than anywhere I know of in Canada. (I admit that I don’t frequent flea markets.) The USA can’t control this problem on their own streets, including Fifth Avenue in NYC.

• There is a real danger that parallel imports will get caught up in this frenzy. These goods are genuine and legal by definition, but there will always be those who try to block them from importation, and who don’t mind if folks such as border officials, police, the press, and the populace get confused about the difference between pirated or counterfeit goods (illegal) and grey or parallel imports (legal). We have just recently succeeded at the Supreme Court of Canada in the Euro-Excellence v. Kraft case in fighting off an attempt to block parallel imports based upon copyright in some elements of the packaging of absolutely genuine Toblerone chocolate bars. However, I have little doubt that there will still be lots of goods and shipments that will be stopped at the border or seized in stores and fought about because of allegations of “infringement” that turn out to be unfounded because the goods are really parallel imports and not pirated or counterfeit goods and somebody doesn't understand or doesn't want others to understand the difference and the law, or simply as a result of mistaken or over zealous efforts by police and border officials.

HK

No CDN lawsuits aginst individuals for file sharing?

There’s a Slyck interview from August 17, 2007 with David Basskin, spokesperson these days for the CPCC - the collector of private copying levies in Canada.

Leaving aside lots of other issues that merit comment, one answer was quite strange.

Slyck.com: Many people have argued for some time that sending lawsuits to people on P2P networks is a bad idea. Some are arguing that, instead of sending lawsuits, it's better to put a levy on ISPs to counteract what the industry considers losses over the internet. Is this something that the CPCC has considered? What are your thoughts on this idea?

David: No lawsuits have been brought in Canada against individuals with respect to unauthorized file "sharing".
...

Excuse me, but what about BMG v. Doe, in which the big record companies sued 29 John and Jane Doe Canadian defendants for file sharing? The result, as we all know, is that BMG et al failed to get disclosure of the names of the actual 29 individuals who were alleged to be illegally sharing files.

If the law suits didn’t actually proceed any further, it wasn’t for lack of effort. The record companies - backed by CRIA - lost in both the Federal Court and the Federal Court of Appeal. CRIA went through three prominent law firms to get this result. There was no lack of effort to sue individuals here.

See my comment on these cases here.

These major record companies - who tried to sue 29 individuals in Canada - happen to be major stakeholders in the private copying levy scheme, through one of the collectives that comprise the CPCC. CRIA was probably the prime mover for the levy scheme in the first place.

I should remind readers that I acted against the record companies in the BMG case and I have long acted against CPCC concerning the private copying levies.

HK

WIPO Broadcasting Treaty - CDN Government Report

The Canadian government has made its report on the recent WIPO meeting concerning the proposed WIPO Broadcasting Treaty available. It follows below. The responsible officials are to complimented for providing this useful information in good detail and in a timely way.

As far as I know, this is not online.

HK
*****************************

Report on June 2007 Meeting of the WIPO Standing Committee on Copyright and Related Rights

For several years the World Intellectual Property Organization (WIPO) Standing Committee on Copyright and Related Rights (SCCR) has been discussing a proposed treaty on the rights of broadcasting organizations. The WIPO Assembly in 2006 mandated the SCCR to have two special sessions devoted exclusively to the discussion of the proposed treaty. The first session was held in January 2007.

This is a report on the second special session of the SCCR which was held June 19 - 23, 2007 at WIPO headquarters in Geneva.

The primary purpose of the meeting was to finalize a Basic Proposal (draft treaty) on the rights of broadcasting (and cablecasting) organizations for purposes of a diplomatic conference tentatively set for Nov. - Dec. 2007. The meeting failed to agree on such a text. Therefore, there will be no diplomatic conference in 2007.

The Canadian delegation supported the recommendation that it would be premature to have a diplomatic conference in 2007.

The key elements of the formal Conclusions of the second special session are that the SCCR will resume regular sessions and the proposed treaty will remain on the agenda. Other items will also be on the agenda.

It is worth noting that a draft version of the Conclusions recommended aiming for a diplomatic conference in 2008 but a number of delegations opposed having any recommended date in the Conclusions and therefore the draft was not accepted by the meeting.

The next SCCR meeting is expected to be in late November (presumably in the time period set aside for the diplomatic conference). Regular SCCR meetings usually last for three days.

The Conclusions must be approved by the WIPO Assembly which meets Sept. 24 to Oct. 3 2007. At this point we assume the Conclusions will be accepted without amendment but that is impossible to say for certain. (A link to the Conclusion is below).

The June Meeting

Most of the meeting was in an informal session meaning that only national delegations (not observer delegations) were in the room. The informal session will not be included in the WIPO report of the meeting.

The basic document discussed was the Chair's non-paper of April 20, 2007 (see link below).

There were two formal submissions to the meeting made by Canada and Mexico (see link below). The US made a formal statement on its overall position (see link below).

The Chair worked on an expanded version of the April 20 non-paper which included many of the suggestions made by delegations during the informal meeting. This non-paper has no official status.

Comments Made on the April 20 Non-Paper

There were comments by delegations on many articles in the draft. The notes below summarize only some of the comments on the most important or controversial articles.

General

During the informal session one industrialized country suggested that the treaty should include a provision that the broadcaster could not assert rights against the content owner or a person licensed by the content owner.

Several developing country delegations objected to the fact that the public interest and access to knowledge provisions had been moved into the Preamble as opposed to being in substantive articles as in document SCCR 15/2.

Art. 7 Protection of Broadcasts

There was some discussion about whether the rights should be "exclusive rights" or whether other forms of protection should be allowed, e.g. a prohibition, administrative remedies. One industrialized country expressed the view that there should be no exclusive rights but that broadcasters should nevertheless have the ability to directly enforce remedies.

There was some discussion of the meaning of "deferred" in "deferred transmission". One developing country suggested that it might be 24 hours. One industrialized country also expressed the view that there should be a clear limit on the duration of this protection.

As in previous meetings certain delegations, especially India, objected to the fact that this wording would prohibit retransmission "by any means". Several delegations see this wording as giving broadcasters a positive right to authorize retransmission over the Internet. This may be reinforced by the fact that the right is "an exclusive right of authorizing" as opposed to a right to prohibit.

One developing country delegation said that the rights should be limited to "traditional" broadcasts and cablecasts, i.e. that the word "traditional" should be added to the text of the treaty. It said that this would be consistent with the mandate set by the 2006 WIPO Assembly.

One developing country delegation said that individual countries should be allowed to opt out of any aspect of Art. 7. (The Canadian submission would allow a limited opt-out with respect to free over-the-air signals.)

The Canadian delegation outlined its position on retransmission as stated in its written submission.

Art. 9 Protection of Encryption and Rights Management Information

As noted in its formal statement (see link above) the USA favoured mimicing the wording in the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty. Some developing country delegations are opposed to any article of this type.

The Canadian delegation said that the electronic rights management information protected under the proposed article should be factual or identifying information.

Art. 10 Limitations and Exceptions

A number of developing country delegations have made written submissions on this issue.

At the meeting, some delegations suggested that the first paragraph (which allows for limitations and exceptions comparable to those for copyright works and other related rights) should be made mandatory. One industrialized country suggested that the exceptions in the first paragraph should be made mandatory on a mutatis mutandis basis.

Other Issues

There remain wide divergences of views including on what is meant by "signal-based approach" to protection.

Conclusion / Future Work

At this point it is impossible to predict how the discussions may evolve in the SCCR meetings in 2008.

Contacts for Further Information

For any further information on the meeting or future work please feel free to contact:

Bruce Couchman

Intellectual Property Policy Directorate

Department of Industry

(613) 952-2621

couchman.bruce@ic.gc.ca

Danielle Bouvet

Copyright Policy Branch

Department of Canadian Heritage

(613) 990-6235

Danielle_Bouvet@pch.gc.ca

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Documents for the June SCCR meeting (including links to Canadian and Mexican written submissions) may be found at:

http://www.wipo.int/meetings/en/details.jsp?meeting_id=12744

http://www.wipo.int/meetings/fr/details.jsp?meeting_id=12744

The Conclusions of the meeting may be found at:

http://www.wipo.int/meetings/en/doc_details.jsp?doc_id=79838

http://www.wipo.int/meetings/fr/doc_details.jsp?doc_id=79838

The WIPO Press release after the meeting may be found at:

English

http://www.wipo.int/pressroom/en/articles/2007/article_0039.html

French

http://www.wipo.int/pressroom/fr/articles/2007/article_0039.html

An unofficial version of the statement by the U.S. delegation may be found at

http://www.keionline.org/index.php?option=com_jd-wp&Itemid=39&p=57#more-57

The Chair's non-paper of April 20, 2007.

http://www.wipo.int/meetings/en/doc_details.jsp?doc_id=77333

http://www.wipo.int/meetings/fr/doc_details.jsp?doc_id=77333

Cellular Backwater in Canada

Michael's post today took me to the National Post.

This took me to the NYT Editorial. Read it while you still can for free before the paywall goes up and Access Copyright tries to "tax" you for browsing and - heaven forbid - printing.....

The editorial decries the excessive restrictions and oligopolist rents earned by US cellular companies and the resulting gap in services and price compared to other nations.

The closed nature of America’s wireless networks is the main reason that its cellphone technology is so primitive compared with Europe’s and Japan’s. The F.C.C.’s new rules go part of the way to solve this, but unfortunately, American consumers have once again been denied a truly open and competitive cellular market.

Everyone knows that US cellular prices and technology are vastly better than in Canada.

So where does that put Canada....????

CRTC (Konrad von Finckenstein) and Competition Bureau (Sheridan Scott) - "please phone home" (for those who remember the long missing E.T.) That is if you can afford the roaming charge.

And what does that have to do with this blog?

Excess oligopoly verging on monopoly is strangling Canadian competitiveness. Canada's copyright policy is rapidly going in this direction, particularly with respect to collectives.

More on that to come.

HK

"Audience Isn't the Enemy" - Zero Tolerance in US Movie Theater

One thing that legislators should be forced to recite every day - and which law schools should hammer home in every class - is that the worst possible ridiculous consequence of any law is bound to occur sooner rather than later.

So - a young lady in Arlington, VA has been charged under anti-camcording legislation for taking a 20 second clip on what is reported to be a Canon Power Shot (which is apparently a digital still camera with limited “movie” capability, as have most still cameras and cell phones now). She thought her little 13 year old brother might like to see the movie too - so she was advertising, in effect, for the theatre and the movie producer.

She even arrived late at the movie, which doesn't fit with the profile of your average professional pirate. Her camera was confiscated. She is banned for life from this theater.

The very model of a modern pirate? Just the type of person that cries out for "zero-tolerance policy at the theater level"?

The powers that be in this case are defending their zero tolerance policy.

She faces a year in jail and a $2,500 fine.

If her story is true, she is being prosecuted and could have a criminal record, a fine and jail time for recording 20 seconds of a film on a digital still camera at presumably very low quality in order to show her little brother so that he would come to see the movie and buy a ticket.

Is this a case of bad law or a bad enforcement call or both?

At least the young lady has capable representation and some notable people caring about her.

Coming soon to a theatre near you in Canada?

Hopefully, the Canadian statute would not permit this kind of charge in such a de minimis situation.

And hopefully our enforcement apparatus would not let it get off the ground.

Hopefully...

HK

A Warning Shot about Copyright Warnings

An important warning shot has been fired about overblown copyright warnings that literally threaten jail sentences and severe fines for activity that is very often fair use or fair dealing, or simply not covered by copyright law in the first place.

Much ado about the complaint to the FTC about frequently ridiculous copyright warnings on TV, in theatres, in books, on DVDs, etc.

A few comments.

The complaint is not from the usual copyleft wing. It is from a trade group that includes Microsoft and Google.

A coalition of American library associations called the Library Copyright Alliance have strongly supported the complaint. It would be really nice if Canadian libraries could more often take such strong, unified and useful positions on copyright matters.

Judge Posner raised the flag on this three years ago in a remarkable guest blog he did on Larry Lessig's site:

The result is a systematic overclaiming of copyright, resulting in a misunderstanding of copyright's breadth. Look at the copyright page in virtually any book, or the copyright notice at the beginning of a DVD or VHS film recording. The notice will almost always state that no part of the work can be reproduced without the publisher's (or movie studio's) permission. This is a flat denial of fair use. The reader or viewer who thumbs his nose at the copyright notice risks receiving a threatening letter from the copyright owner. He doesn't know whether he will be sued, and because the fair use doctrine is vague, he may not be altogether confident about the outcome of the suit.

...

What to do about such abuses of copyright? One possibility, which I raised hypothetically in my opinion in WIREdata, pp. 11-12, is to deem copyright overclaiming a form of copyright misuse, which could result in forfeiture of the copyright. For a fuller discussion, see the very interesting paper by Kathryn Judge...

As usual, Judge Posner in his scholarly capacity was way ahead of the curve.

BTW, the article he mentions by Kathryn Judge is “Rethinking Copyright Misuse” (2004), 57 Stan. L. Rev. 901. Ms. Judge clerked for both Justice Posner of the Seventh Circuit and Justice Breyer of the U. S. Supreme Court - which is extraordinary.

Her notable article was cited in last week's Supreme Court of Canada decision in Euro-Excellence v. Kraft.

HK

Euro v . Kraft - Further Thoughts

Some further thoughts beyond my first take on the Kraft decision of the Supreme Court of Canada delivered July 26, 2007:

1. While it is true that there is much comment about the interesting arithmetic comparing counts of how the four opinions split on the various issues, one thing is quite clear. Seven out of nine judges decisively ruled against Kraft.

2. In terms of arithmetical predictions for future cases based upon various splits on various issues, the law is not based on arithmetic. Otherwise, lawyers wouldn’t have much to do. The bottom line in this case presumably is that the Supreme Court of Canada has ruled - 7/2 - that based on these facts, there is no copyright infringement.

3. Several lawyers have suggested in blogs, law firm web sites, or in media interviews that assignments could now replace exclusive licenses and that the result would be different if Kraft had chosen this strategy. In fact, a Kraft spokesperson was quoted by Bloomberg as saying:

``We believe the outcome would've been in Kraft's favor if we had assignment of copyright,'' Galia said. ``So we do see an opportunity to look at further options.''

4. However, it has long been known that assignments - as contrasted with exclusive licenses - avoid the difficulties with the “hypothetical maker” doctrine as clearly now enunciated by Rothstein, J., with whom three other Justices agreed. Assignments, as opposed to exclusive licences, are “old news”, as they say.

5. So - why has nobody successfully used a strategy involving assignment of copyright in packaging elements before? There have been many reasons - and it’s not my job to set them out here. Let me simply say that any company contemplating such a strategy should make sure that it is getting not only well informed copyright advice, but also good trade-marks, tax, corporate and competition law advice as well - for starters.

6. One thing, however, that is news is that now, based on what we can see from last week’s decision, at least four of the current Justices - and maybe more - might well see through and reject a strategy based on assignments as either copyright abuse or misuse or, as Fish, J. stated, as “an instrument of trade control not contemplated by the Copyright Act.” They may see such a strategy as a blatantly artificial attempt to use copyright in a trade restrictive manner for products not themselves protected by copyright. The abuse/misuse issue was mentioned but not dealt with on the merits in last week’s ruling, which was quite predictable because there was no need to deal with it and there was an insufficient record. But it may be very different next time. It has been expressly mentioned and left open for another day.

7. As I often say, copyright owners must be careful what they wish for. A carefully developed strategy to thwart gray marketing of products not themselves protected by copyright based upon assignments (as contrasted with exclusive licenses) in packaging or labelling elements may well provoke an unintended and unpleasant result (from the owner’s viewpoint) on the copyright abuse/misuse front.

8. There are also several other good arguments not mentioned in the judgment that could sink any attempt to refloat this same ship with slightly different sails. They, too, may be left for another day.

9. As the old cliché about grey marketing goes, the law is rarely black and white. The underlying issue never goes away - which is that some IP owners crave monopolistic exploitation by market segmentation of their alleged rights, while the market place seeks competition and free trade in genuine goods. This issue has been in the Courts since the at least 1871 and nobody expected it to come to an end last week. It has a hydra-like aspect - one cuts off one head and more soon appear. Anyway, the last round went to the parallel importers and free traders - as it seems to more often than not overall, except with respect to books, records DVDs and other products actually protected themselves (and not simply their packaging) by copyright.

10. One can expect much more attention to the issue now with this decision and with a CDN $ dollar approaching par with the US $.

11. And there may be demands that this issue be dealt with by legislative reform - as has happened in Australia and the UK. But that would be extremely controversial.

12. For now, we have a 7/2 judgment and I’m glad to have been on the winning side. Full disclosure - we acted for an intervener supporting the successful Appellant in this case - but these views are purely my own.

HK

Euro v. Kraft Decision - First take on landmark parallel imports decision

Updated*

Here's the Supreme Court decision in Euro Excellence v. Kraft.

Here's my quick analysis on this landmark decision.

1. The main judgment by Rothstein, J. (+ Binnie & Deschamps) is based upon highly technical arguments we put forward on the “hypothetical maker” doctrine, and the nature of exclusive licenses. These reasons highlight very important differences between the rights of assignees and exclusive licensees. Although some companies may now look to use assignments as a basis to block parallel imports of goods not themselves protected by copyright, they would do well to remember why this has not been done much if at all in the past. They will need to think through the practical tax and loss of control issues, and look carefully at the reasoning of Justices Fish, Bastarache, LeBel and Charron - which suggest that even an assignee may have great difficulty in using copyright law to block parallel imports where the copyright element in question is only “incidental” to the real transaction. An intercorporate assignment may be disregarded for purposes of blocking trade in legitimate articles, and an arms length assignment means just that - an assignment. Who is going to sell the artwork in their crown jewels?

2. Fish, J. agrees with the foregoing and notes the purely nominal consideration for the intercorporate transaction and says in admitted obiter dicta that he has “grave doubts” about using IP law as “an instrument of trade control not contemplated by the Copyright Act.”

3. Bastarache, J. (with LeBel and Charron, JJ.) looked at the “incidental” aspect of the work in question and that the Act was not meant to stop parallel imports where the copyright interest is merely incidental to the consumer good in question. This is not consistent with the “legitimate economic interest” of the owner or in turn the exclusive licensee. These Justices also leave the door open to application of the copyright misuse doctrine, which was unnecessary to consider in this instance and would be “best left for another day.”

4. Abella, J. (with McLachlin, C.J.) basically said that the transaction was caught by the literal language of the legislation and disagreed with any judicially created limit on this meaning. Her reasoning on exclusive licenses, in particular. appears to be quite different from that of Rothstein, J.

Bottom line:

This is a major victory for those who who favour free trade and real competition. The core reasoning turns mainly on the hypothetical maker doctrine and the rights (or lack thereof) of exclusive licensees.

The Court looked very carefully at comparative jurisprudence here. Although only briefly mentioned, I believe that Sir Hugh Laddie's material on the hypothetical maker doctrine and exclusive licenses from his major treatise on UK law was very influential. There were also a couple of references on the point of exclusive licenses to Nimmer’s American treatise. Bill Patry’s major new seven volume treatise was published only after the case was heard by the Court. Bill has already blogged about the decision.

The additional theory of “incidental” work or use and “legitimate economic interest” could be helpful in any borderline situations that may arise in the future. These theories could certainly lead to beneficial policy results in other contexts as well.

The academics will have a field day with this - trying to parse the differences between the judges and in turn with previous jurisprudence from this and other high courts.

Bloomberg has a business oriented article that cuts to the chase....

Interestingly, one major Canadian law firm - Ogilvy, Renault - which had nothing to do with the case - has issued a frankly rather confusing press release [now updated - see below*] inexplicably - and incorrectly - claiming that :

“Grey Market Goods Illegal According to Supreme Court of Canada - Decision rendered today in Euro-Excellence v. Kraft”

So - there are clearly still going to be many questions ahead on the issue of grey (gray as the Americans say) marketing and parallel imports.

However, the victory today is clearly on the side of those who believe in free trade, real competition and what I argued to be a correct reading of the current Canadian Copyright Act.

I acted in this instance for the intervener, Retail Council of Canada - which supported the successful appellant and argued in favour of free trade and a competitive marketplace, where copyright law cannot be used as an artificial “strategy” to “thwart” importation of genuine products other than through an exclusive distributor’s own distribution channel. However, as always, on this blog, these comments are my own.

*Update:

Michael Geist, as usual, was very quick to analyze the judgment.

Warwick Rothnie in Australia - who wrote a wonderful monograph on parallel imports published in 1993 and which I hope he updates one of these years - has a blog entry on this decision.

Jorge Espinosa, a Miami lawyer, has an entire and very impressive blog devoted to "gray" marketing called the Gray Blog. He has sympathy for the correct Canadian/Commonwealth spelling - but he is, after all, in America. He has opened up a section on his blog for Canada and has a couple of entries already on this decision.

As a reader comments below, Ogilvy, Renault has updated the headline in its press release.

Supreme Court of Canada: selling grey goods is not necessarily copyright infringement - Decision rendered today in Euro-Excellence v. Kraft

Well, with respect, 7 out of 9 of the Justices said that what took place in this instance was *not* copyright infringement. There was no qualification about "necessarily."


HK

Choral Performance of SONY EULA

Here's a choral performance of the Sony/BMG End User License Agreement -- remember the Rootkit fiasco -- set to music and arranged for choir and recorded by Toronto recording artist Brian Joseph Davis.

Here's the story in Wired.

Hat tip to Fred Von Lohmann.

Apparently, Sony is suing the software supplier. Sony must be shocked, shocked that the software did what it did.

Now let's see if SONY goes after Mr. Davis.

HK

Kraft Decision - Judgment Day Set for July 26, 2007

The Supreme Court of Canada today announced that it will deliver its judgment in the very important case of Euro‑Excellence Inc. v. Kraft Canada Inc., Kraft Foods Schweiz AG and Kraft Foods Belgium SA this Thursday, July 26, 2007 at 9:45 AM.

The announcement contains the Court's summary of the case.

Here's what I said about the case at the time that leave was granted, on May 18, 2006 on the subject of: Copyright, Competition, Free Trade & Chocolate Bars.

I acted for the Retail Council of Canada, which was an intervener in this case.

HK

iPod Levy - Déjà Vu All Over Again?

Last week the Copyright Board ruled that CPCC's proposed new tariff that would include a levy on Digital Audio Recorders, e.g. iPods, could proceed. The Board indicated that it will entertain CPCC's request for a levy on digital audio recorders.

Here's the Board's ruling.

Here's an article in today's Globe and Mail, quoting my client, the Retail Council of Canada.

And here's the judgment of the Federal Court of Appeal from 2004 which says, among other things;

[160] A digital audio recorder is not a medium; the CPCC recognized so much when it asked that the levy be applied on the memory found therein but not on the recorder itself. The Board erred when it held that it could certify a levy on the memory integrated into a digital audio recorder.

...

[164] In my respectful view, it is for Parliament to decide whether digital audio recorders such as MP3 players are to be brought within the class of items that can be levied under Part VIII. As Part VIII now reads, there is no authority for certifying a levy on such devices or the memory embedded therein.

The Supreme Court of Canada refused to grant leave to appeal from this decision.

Since I'm quite involved with this, I'll say no more. I just thought the above would be useful for information purposes.

HK

President Bush on Neighbouring Rights

This was the President's response to a question posed during his recent visit to Nashville:

Q Mr. President, music is one of our largest exports the country has. Currently, every country in the world -- except China, Iran, North Korea, Rwanda and the United States -- pay a statutory royalty to the performing artists for radio and television air play. Would your administration consider changing our laws to align it with the rest of the world?

THE PRESIDENT: Help. (Laughter.) Maybe you've never had a President say this -- I have, like, no earthly idea what you're talking about. (Laughter and applause.) Sounds like we're keeping interesting company, you know? (Laughter.)

Look, I'll give you the old classic: contact my office, will you? (Laughter.) I really don't -- I'm totally out of my lane. I like listening to country music, if that helps. (Laughter.)

One has to admire his honesty and sense of humour in this instance.

HK

HAIR SALONS & SOCAN

SOCAN - the $200 million or so a year grand daddy of all music collectives in Canada - is after hair salons. Last time, the campaign was against dentists.

They want money. Minimum $95 a year.

It is worth reminding beleaguered and overtaxed business persons that s. 69(2) the Copyright Act has a bit of very good news for them on this issue. If they just play music on a "radio receiving set" - in other words a "radio", there is no need to pay SOCAN. Just don't play tapes or CDs, even if the radio includes these features.

I don't know if SOCAN is clearly and actively pointing this exception out to business owners. I doubt it. They really should be required to do so.

HK

Harry Potter and the Deathly Shallows of Copyright

Once again, Canada's Raincoast publishers who had the immensely good fortune to become the exclusive Canadian distributors of this legendary money maker are pushing the envelope of copyright far beyond any legal basis, according the the Globe and Mail.

According to the Globe, Raincoast's position is that:

"the legal framework in Canada recognizes and protects the confidentiality of the book and its content until the release date chosen by the author and the publishers as holders of the copyright, notwithstanding attempts at spoilers or other breaches of the embargo."

The Globe's lawyer, Peter Jacobsen says:

... that Raincoast's position "misstates the law." While copyright is protected under the law, the law "does not prevent comment ... for the purposes of review ... and news reporting," he said. "If someone were to obtain a copy of [Harry Potter and the Deathly Hallows] in a legitimate way, they can do any kind of review or discussion of it as they see fit, so long as it falls within the definition or criticism or review or news reporting."

Jacobsen said copyright law "restricts the amount you can quote," but he cautioned that Potter's publishers "attempt to misstate the law is a way to say there's kind of an injunction against revealing anything about [the book]."

Jacobsen is absolutely right and Raincoast is quite wrong.

Copyright law does not cover facts and anyone has the right to talk about a book, and to quote parts of it for purposes of criticism or review.

The issue of "spoilers" and giving away the ending is not a copyright issue - but rather a time honoured tradition amongst professional critics and, indeed, most decent ordinary people...

Let's not forget that copyright law - despite enormous efforts to the contrary and incrementally creeping inroads - doesn't yet include the exclusive right to read, talk about or think about things of interest and even importance....

HK

Counterfeit Kalashnikovs

It turns out that the Russians are shocked, shocked that one of their favourite brands and products is being knocked off in lots of places, and one of the main purchasers and distributors has been the USA, who, of course, believes in respect for IP.

We're talking Kalashnikov AK-47 machine guns, here. And the inventor is still alive.

Even General Kalashnikov himself is venting his dismay over proliferation without Russian profit. “I take them into my hands and, my goodness, the marks are foreign,” he said of the knockoffs the Soviet Union once championed. “Yes, they look alike. But as to reliability and durability — they do not meet the high standards of our military.”

Anyway, here's the whole ironic story in the NY Times. Maybe Canada's brave RCMP can go after these counterfeit death causing products.....consistent with their new zeal in enforcing antipiracy so that cute little girls don't die..... and so that the CACN will be happy....(Amazing, the resemblance of the content revealed by these two links).

Maybe the Russians should have respected IP sooner, and/or had better IP lawyers....

Then, the world might have been a better place ;-)

Given that the weapon has been around for 60 years (although it is constantly being improved), patent protection is out the question for the older versions, anyway. Mr. Kalashnikov himself says on a video on the NY Times site that "I am a child of the time when we didn't care about patents."

In Canada, oddly enough, the word "Kalashnikov" & Design was registered on November 30, 2006 as a trade-mark for vodka - another mainstay of the Russian export economy. The registration indicates that:

As per the applicant, the transliteration of the Russian characters is KALASHNIKOV. We have been advised that the word "KALASHNIKOV" has no meaning in English or French.

And oddly enough, there are two applications for "AK-47" & design for various beverages, including, oddly enough, vodka.

Anyway, back to machine guns. We must respect creators, as certain of my colleagues constantly remind the Government, the Courts, and the Copyright Board.

After all, we wouldn't want people being killed by counterfeit Kalashnikovs, would we? If we really respect IP, not to mention health and safety issues, they ought to be killed by the real thing....

More to come on counterfeiting in due course....

HK

Organized Crime and Organized Conflation for the Nation

In a glossy report entitled "Out of the Shadows" that ranges far and wide from drugs to tobacco smuggling to motorcycle gangs to human trafficking and to - you guessed it - intellectual property, the Ontario Association of Chiefs of Police has joined the bandwagon of conflating IP "crime" with all manner of organized evil. Our police chiefs copied (or was it fair dealing?) a good chunk of their material on IP from the Canadain Anti- Counterfeiting Coaltion ("CACN") FAQ, where it says:

How can I ensure that the product I’m buying is not counterfeit?

Some indicators to watch for include the price being much lower than average, spelling mistakes on the product or packaging, products that are normally sold in packages being sold individually, shoddy appearance of the product or package, or products (particularly electrical products) that have no name brand. In addition, if you buy products from a reputable retailer, there’s less chance they will be counterfeit.

I can't be bothered to do the side by side, since the police chiefs have made their presentation non cut-and-pastable. (Too bad for access to knowledge). It's at page 21 of their report.

And for a little melodrama - and the evident source of the police chief's wording, see this touching poster from the CACN of an adorable young child whose life is threatened by such things as a price being "much lower than average."

One GOOD thing about the police version of things is that they only say that counterfeiting is costing the Canadian economy a billion a year - a far cry from Ambassador Wilkins outrageous pronouncement of up to $30 billion.

The police chiefs are clearly concerned with organized crime. And rightly so.

But the risk of conflating "patent, trademark [sic] and copyright infringements" with all of the rest of the litanies of organized evil belies not only an organized IP lobby but some real dangers for public policy.

Could the legitimate, time honoured and competitive practice of parallel importation (which by definition involves perfectly legitimate and authentic goods) get mixed up in policy makers' minds with the counterfeiting issue? Parallel imports are often sold at a price "much lower than average", simply because they enter the country other than via the "exclusive" Canadian distributor, having been legitimately bought abroad at a more favourable wholesale price than the Canadian exclusive distributor is able or willing to offer. This very issue just happens to be pending before the Supreme Court of Canada.

Anway, it seems as if this campaign will never end. Talk about "organized"!

And a Parliamentary Committee has already credulously bought into this, hook, line and sinker, as Michael Geist has duly documented.

BTW, here's a fact. And I'm not inciting, counseling, or encouraging anything here. Counterfeit "Rolex" watches for $10.00 and lots of other counterfeit brand name goods at really cheap prices are still flagrantly available in New York City - much more flagrantly, I daresay, than in Toronto or Montreal, for example, in Canada. This is more than ironic because the source of virtually all of the organized pressure on Canada is the US Government and its own lobby of organized multinationals.

In any event, don't just take my word on the issue of over-criminalizing IP infringement. Two of the leading thinkers and scholars of our time or any time in IP - namely, Sir Hugh Laddie and Bill Patry - have recently weighted in. See Bill's recent blog here.


HK

Avril Update

Thanks to Gordon Duggan, leader of Appopriationart.ca for making me aware of reports of a lawsuit against iTunes involving Avril's allegedly infringing song. The source of the reports appears to the the sometimes reliable Appleinsider site, here.

What is clearly NOT reliable is the suggestion that the Plaintiffs "could alternately collect $150,000 for every infringement and skim interest on the pre-judgment financial award, potentially forcing a significant payout."

Much as I decry statutory damages, they don't work that way. The award is up to $150,000 in the USA per work and NOT per infringing copy and the Plaintiff has the burden of proving that the infringement was done "willfuly" to escalate to that high figure. One can be quite confident that iTunes did not "willfully" peddle an infringing work, assuming Avril's song is ever held to be infringing, which is far from certain.

HK

Big News From Belgium

Belgium seems to be a country that loves high levels of copyright protection. So much so that it has, apparently, mistakenly unilaterally ratified the 1996 WIPO Treaties by itself. Belgium, of course, is part of the EU and the EU and all its members will do this ensemble, if and when they do it at all - which is long overdue and not necessarily a fait accomplit - but that's another story.

Meanwhile, according to Dugie Standeford at IP-Watch, a Belgian Court has ordered an ISP to install filtering software to stop the P2P delivery of music whose copyright is in the repertoire of the Belgian Society of Authors, Composers and Publishers (SABAM). They are being ordered to use the Audible Magic system.

This raises a host of privacy, technical, legal, and political issues. The decision will likely be appealed. It will be interesting to see how civil law courts approaches this type of issue.

But what I mainly wonder is simply whether the Court's solution can even work. And what will be the collateral damage in terms of restriction of P2P activity that is legitimate by anybody's measure, not mention privacy and network efficiency?

EFF, of course, is always ahead of the curve and has already looked carefully at Audible Magic and doesn't believe that the Audible Magic system will even be effective and that it will be easily defeasible.

Wnether these efforts to defeat would constitute illegal circumvention remains to be seen. But experience shows that, as the legendary John Gilmore famously said, "The Net treats censorship as damage and routes around it."

HK

Avril Lavigne - alleged infringer

Being sued for copyright infringement can be interesting if you are big time.

Avril is - of course- a big time international star.

And she's being sued. Her song is called "Girlfriend" and it goes on and on about "I wanna be your Girlfriend". She's being sued by members an old 70' s band called the Rubinoos, who had a song called "I Wanna Be Your Boyfriend." The two songs are side by side here. The songs are far from identical - but beyond that I won’t comment. The litigation is in the USA - where almost anything can happen in the courts.

Terry McBride of Nettwerk Managment - Avril’s manager and a real hero and leader of the Canadian Indies who broke with CRIA last year - talks rather frankly about the litigation in Billboard, here. Perhaps more frankly than he should - but I'm not his copyright lawyer. And he didn't ask me. And he’s a pretty smart guy. Interestingly, another one of his big star acts, Chantal Keviazuk has also been accusing Avril of song theft - though she hasn't sued.

The interesting thing is that I just heard the Boyfriend song on some MOR station in some commercial space I was in today - and I expect both songs will do really well now. Girlfriend is #8 on the Billboard Hot 100 list and doing really well.

Even George Harrison lost a big copyright infringement case over My Sweet Lord. It didn't hurt his career one bit.

As long as it doesn’t involve outright plagiarism, getting sued for copyright infringement is not necessarily bad for a super star’s career.

So everyone could win here. And the Rubinos may come out of obscurity and hopefully get a prettier web site.

As they sometimes say in show biz, all publicity is good publicity.....

HK