Reflections on the liberal roundtable on the digital economy

February 17th, 2010 by Barry Sookman Leave a reply »

Last week, Liberal Industry critic Marc Garneau and Heritage critic Pablo Rodriguez hosted a roundtable on the digital economy in Ottawa. There were two panels. One was on our modern digital infrastructure. The other one was on copyright, broadcasting and the Internet. I participated in the copyright roundtable along with representatives from the ESAC, ACTRA, Rogers and Prof. Geist.

I commend Messrs. Garneau and Rodriguez for organizing this event. Developing a strategy for Canada’s digital future is a critical component of ensuring prosperity and opportunities for all Canadians.

As noted above, Prof. Geist was on my panel. In his prepared remarks which he posted on his blog and in answers to follow up questions from the audience, Prof. Geist made a number of assertions which should not go unchallenged. Let me go through some of them adding my reflections.

Bill C-60 was good legislation while Bill C-61 was bad

Prof. Geist started his presentation by suggesting that Bill C-60 got copyright policy right. His statements before the Liberal caucus should be compared with what he actually said about Bill C-60 after it was introduced and during the election following the introduction of the Bill. At that time, Prof. Geist repeatedly excoriated Bill C-60 and the then Liberal minority Government over it.

Prof. Geist lambasted Bill C-60 arguing it was a sell out to “special interests” that did “little for individual Canadians.” His criticisms were wide ranging including specific attacks on Bill C-60’s amendments related to protecting technological measures (TPMs) and other provisions such as the exceptions for educational institutions and ISPs. By way of example, he said:

  • “I’ll have much more to say in the days ahead but my immediate impression is that the recording industry is the big winner with an enormous basket of new rights and individual Canadians are the big losers as the bill does little to address their interests. Canada Introduces New Copyright Bill…Anyone who has followed copyright reform history will not be surprised to learn that individual Canadians are the big losers today.” Canada Introduces New Copyright Bill
  • “Last week the federal government unveiled Bill C-60, its long awaited digital copyright reform bill. Ottawa kept its promises – the recording industry and Canada’s Internet service providers emerged as the big winners with each securing a lengthy list of new rights, power, and protections.” Canadian Copyright Bill a Missed Opportunity
  • “Bill C-60, the copyright reform bill currently before the House of Commons, provides a laundry list of new rights and powers to special interests, but does little for individual Canadians.” What’s The Frequency, Liza?
  • “If the Canadian government is serious about supporting education, it needs to move toward a broad fair use provision, to promote policies that help rather than hinder access, and to craft a copyright bill that does more than just cater to the interests of the recording industry while failing to address the needs of millions of Canadians”. Canadian Ministers Respond to Copyright and Education Concern
  • “Even where the Canadian model provides some relief in contrast to the U.S. approach, it still does not go far enough. The best example is the anti-circumvention provisions”. Canada Introduces New Copyright Bill
  • “does the copy control technology even qualify as a technological measure under Bill C-60? If it does, should it? I don’t think we have a clear answer here. Other jurisdictions focus on the effectiveness of the technological measure…The failure to include an effectiveness standard in Bill C-60 is yet one more reason why Canadians should stand up to the proposed copyright reform package. Stand Up
  • “Should the outcome of the election be favourable for the morally besieged Liberal Party, perhaps leader Paul Martin should consider rewarding Ms. Bulte’s hard work and loyalty with a different portfolio entirely, if only to show that Canadians won’t dance to every tune the Americans wish to play and charge us for.” Quoting Jack Kapica’s article in the Globe in Cleaning Up Copyright. See also, Campaign Contributions

Prof. Geist was right at the time to point out that Bill C-60 had its flaws. The provisions related to protecting technological measures were one of them. The ISP provisions were another. What is surprising, however, is that Prof. Geist, after repeatedly condemning Bill C-60 would now tell the Liberal caucus that “there are many who would say with hindsight you got it right”.

While C-60 may have had flaws, the expressed goals of Bill C-60 were right then and are still right today. Its goals were to amend the Copyright Act: to meet the challenges and opportunities of the Internet; to help foster an innovative economy based upon the creation, dissemination and commercialization of ideas; to ensure that innovators are rewarded, research is facilitated, and the use of technology is enhanced; to strengthen our creative industries against the unauthorized use of their works on the Internet; to provide creators, intermediaries, and users of copyright material with the certainty and clarity that will allow them to take full advantage of the opportunities of the Internet; to implement the WIPO Treaties; to clarify liability for ISPs; to facilitate the use of new technologies for educational and research purposes; and to harmonize the treatment of photographers with that of other creators; and to strike a balance to serve both our creators and users.

The WIPO Internet Treaties.

At the roundtable, Prof. Geist reiterated his opinion that any new Bill should limit protection for technological measures (TPMs) to acts of circumvention where done for the purposes of infringement. His arguments in support of this were based on the following incorrect positions.

  • Claim: The recently published Conference Board of Canada’s report on intellectual property confirms that there is considerable flexibility in how the WIPO Treaties can be implemented. Response: That report stated “Indeed, there is some room for Canadian customization in how the WIPO provisions would be accommodated in our laws: the implementation models all differ for the U.S., the European Union, Japan, and Australia, although all have ratified the same WIPO treaty.” (at p.56-57). The countries referred to by the Conference Board, however, all had WIPO compliant implementations that provided protection against circumvention of TPMs not linked to copyright infringement and had protections against trafficking in circumvention tools. There were some deviations in how exceptions were handled and whether protection was provided against copy control (versus access control) tools. However, these deviation were variations above the minimum floor required by the treaties, not below them as proposed by Prof. Geist. The Conference Board provides no support for the position taken by Prof. Geist that there is flexibility to implement the treaties in the manner he proposes.
  • Claim: Bill C-61 “was lacking in flexibility (beyond WIPO requirements to cover all circumventions – even for fair dealing, to protect privacy, research, etc were prohibited).” Response: Prof. Geist inaccurately describes Bill C-61. Bill C-61 contained exceptions from the anti-circumvention provisions including exceptions to protect privacy, to permit encryption research, to permit security research, to permit research for interoperability purposes, to help persons with disabilities, and for law enforcement and national security purposes. (ss.41.11-41.19) Bill C-61 also had two provisions which flexibly permitted the Government by regulation to broaden the list of proposed exceptions. (s.41.2)
  • Claim: Bill C-60 offers a “more balanced” approach to dealing with legislation designed to provide legal protection for TPMs. Response: In fact, Bill C-60 offered a completely ineffective means of providing legal protection for technological measures. For example, Jason Kee from the ESAC who appeared at the roundtable spoke about the challenges faced by the entertainment software industry in combating mod chips. These devices enable infringing copies of games to play on game consoles or computers by effectively circumventing the access control TPMs associated with the games and game consoles. Prof. Geist’s proposal would provide no protection against these technologies. (The infringing copies of the games have already been made and the circumvention of the TPMs in the games consoles to enable them to play is not for the purpose of committing any infringing act.) That is why organizations like the Canadian Coalition for Electronic Rights (CCER), whose members include sellers of circumvention tools such as “mod chips” for video game consoles were so active in the copyright reform process and together with Prof. Geist argued for such ineffective protection for TPMs. Prof. Geist is correct in his contention that “The difference between the Conservative C-61 and the Liberal C-60 is not a matter of legal fine tuning.” Bill C-60’s TPM provisions were the darling of the mod chip manufacturers because they did nothing to stem the use of businesses built around and profiting from infringement or to enable tax-paying, job creating enterprises to grow and thrive in the digital economy.
  • Claim: Canada faces great pressure to “implement” the WIPO Treaties. Response: Canada is under domestic and international pressure to RATIFY not merely implement the WIPO Treaties.

Intermediary Liability

Prof. Geist advocated that any new bill implement “notice and notice” and not notice and takedown or graduated response. His reasons were the following:

  • Claim: Notice and notice works. Response: Prof. Geist’s assertion that notice and notice works is without foundation. We have had a de facto notice and notice system in Canada for many years and there is no evidence that it changes people’s behavior to stop illicit file sharing and purchase creative products from legitimate services. As I pointed out elsewhere, research by our trading partners shows that while a simple notice may have a temporary effect in reducing online file sharing, only notices that have a threat of some sanction operate as an effective deterrent.
  • Claim: Notice and notice avoids having to implement notice and takedown. Response: “Notice and notice” and “notice and takedown” are complementary methods of dealing with online file sharing. They are portrayed by Prof. Geist as mutually exclusive processes when they are not. Graduated response is useful in dealing with P2P file sharing; notice and takedown is necessary to deal with files that are hosted by an ISP.
  • Claim: Graduated response “could result in Internet users losing access based on allegations of infringement.” Further, as contended by Prof. Geist in answer to a question, privacy of individuals’ personal information would be violated. Response: Prof. Geist is once again engaging in scaremongering. See, Fear Mongering and Misinformation Used to Slag ACTA; A reply to ACTA critics. Graduated response systems such as those being enacted by the UK and New Zealand are being carefully designed to expressly avoid any such consequences. See, Graduated response and copyright: an idea that is right for the times. Any legislation in the UK, for example, would have to recognize, as the French Hadopi law did, that end-users’ access to or use of the Internet must respect the fundamental rights and freedoms of natural persons, as guaranteed by the European Convention on Human Rights and Fundamental Freedoms and general principles of Community law. Accordingly, any technical measures taken against an individual can only be taken with due respect for the principle of the presumption of innocence and the right to privacy. Further, a prior fair and impartial procedure must be guaranteed, including the right to be heard of the person or persons concerned. A right to an effective and timely judicial review must also be guaranteed. See, Article 1(3)(a), Revised EU Framework Directive, EU Telecoms Reform
  • Claim: Graduated response’s costs cannot be justified. Response: This assertion by Prof. Geist was roundly criticized by economist Prof. Bomsel in his recent article The costs and benefits of graduated response in copyright enforcement and by me in another recent blog. Prof. Geist`s cost argument against graduated response essentially is that costs looked at alone and without regard to any economic, social, or other benefits militates against implementing any such system. Using his methodology, we should conclude that no laws can be justified because they all involve costs of administration or enforcement.
  • Claim: The Australian iiNet decision shows that graduated response cannot work. Response: The iiNet decision did not consider the effectiveness of state sanctioned graduated response mechanisms. Further, a chief difficulty in iiNet was that there was no industry consensus or policy as to how to deal with multiple infringers.

Fair dealing

Prof Geist argued that Canada should radically change its approach to copyright exceptions by implementing fair use. The arguments against implementing fair use are many. That is why it was rejected by Canada when last studied here and why it was rejected by of our trading partners such as the UK, Australia and New Zealand after they had also thoroughly examined it. See, Why Canada Should Not Adopt Fair Use (2009) 2 Osgoode Hall Rev.L.Pol’y 13

What copyright reforms are needed

I have set out in detail elsewhere what reforms I believe are needed to help build a copyright framework that is right for the 21st century, that strengthens our creative industries, fosters innovation, enables creators to build markets and to be fairly compensated for their creative efforts and investments, and which recognizes the legitimate needs of consumers. My recommendations consist of 8 guiding principles and 11 specific recommendations. They are as follows:

Principles to guide copyright reform

  1. Recognize the importance and the unique characteristics of the creative sector.
  2. Establish specific goals for a “Digital Canada” copyright framework.
  3. Provide effective digital copyright protection to stimulate intellectual creation and dissemination of cultural products.
  4. Provide clear, predictable, and fair rules that support creativity and innovation.
  5. Reform and adapt copyright laws to reduce digital piracy and to promote investment and economic growth in creative products.
  6. Reform and adapt copyright laws with new exceptions in accordance with international standards and treaties.
  7. Do not regard copyright reform as a “zero-sum game” or succumb to the philosophy of unrestricted user “rights.”
  8. Regard technology neutrality perhaps as a goal, although this principle has limitations.

Specific recommendations for copyright reform

 

  1. Amend the Act to enable Canada to ratify the WIPO Treaties.
  2. Provide protection against circumvention of TPMs that are required by the WIPO Treaties and that comport with international standards.
  3. Establish a “making-available right.”
  4. Clarify the law related to secondary infringement to help address online piracy.
  5. Implement a notice and notice system backed up by a nuanced graduated response process.
  6. Implement a notice and takedown system that fully respects due process considerations.
  7. Enable rights holders to obtain injunctions against Internet intermediaries to prevent infringements.
  8. Implement fair and effective border measures to protect against the import of pirated goods.
  9. Clarify that ISPs are not liable for infringement when they act as true intermediaries.
  10. Establish new exceptions to facilitate private uses of works where justified, and do not adopt “fair use” or an “expanded fair dealing” provision.
  11. Establish new educational and library exceptions in accordance with the three-step test.

I also recently published a shorter summary of my proposals for reform in CBA’s National magazine.

My slides presented at the copyright panel are set out below.

For more information about the Copyright Modernization Act or Bill C-11 or copyright reform, see Change and the Copyright Modernization Act.

Sookman Digital Canada Presentation Feb 11 2010

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