Change and the Copyright Modernization Act

November 7th, 2012 by Barry Sookman Leave a reply »

Bill C-11, the Copyright Modernization Act, with a few exceptions, is now law with the publication of the Governor General Order in Council. The fourth attempt to amend the Copyright Act since 2005 succeeded where Bills C-60 (2005), C-61 (2008), and C-32 (2010) did not.

A lot has changed since 2005 when Bill C-60 was first introduced. That Bill would have made a limited, but important, set of amendments. Its summary reminds us that it would have amended the “Copyright Act to implement the provisions of the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, to clarify the liability of network service providers, to facilitate technology-enhanced learning and interlibrary loans, and to update certain other provisions of the Act.”  Bill C-11 addresses far more than this.

When Bill C-60 was first introduced in 2005, Canada’s main trading partners had already modernized their copyright laws. The United States had passed the DMCA. Australia had adopted legislation similar to Bill C-60. The European Union had enacted the Copyright or InfoSoc Directive  and the Electronic Commerce Directive. These continent-wide laws addressed, among other things, WIPO Treaty-required measures such as legal protection for technological measures (TPMs), as well as safe harbors for internet intermediaries. The EU directives went further than Bill C-60. They created exemptions for reverse engineering of computer programs for interoperability purposes, and making temporary copies of works as part of technical processes. These exemptions are now in Bill C-11. They also permitted certain private copying of digital works in exchange for levies paid to rights holders.

The EU directives also went further than Bill C-60 by enabling courts to make orders requiring ISPs to block pirate web sites. This power has been used extensively in the EU to block pirate sites like the Pirate Bay in order to protect domestic markets from these “wealth destroyers”.

While Canada was studying reforming our laws after Bill C-60 died, countries which had already dealt with these “first generation issues” moved ahead to the next generation of legal reforms to address the evolving digital landscape. For example, Japan amended its laws to create strong criminal penalties for copyright piracy. France, New Zealand, UK and South Korea enacted graduated response legislation to promote the legal purchase of creative products and services and to discourage online file sharing.

The EU, which has had a de facto notice and takedown regime for over a decade, launched a study to develop a uniform notice and action procedure for illegal content hosted by online intermediaries. In January, the EU Commission announced an initiative on “notice-and-action” procedures, and in June, it launched a public consultation on such procedures.  In July, the EU Commission published a proposed directive on collective management of copyright and related rights in music. Last month, the Council adopted a directive on orphan works. France and Germany are both considering laws to require search engines like Google to compensate publishers for caching, indexing and making headlines and snippets of news articles available such as through Google News. In the UK, the Hargreaves Review of Intellectual Property and Growth made numerous recommendations for further changes to address digital issues. The UK Government accepted a number of these recommendations and made broad proposals for an orphan works scheme, extended collective licensing, and a limited private copying exception.

In August, the Australia Law Reform Commission (ALRC) initiated a public consultation on copyright policy with the release of an Issues Paper. The issues being canvassed include expansion of exceptions to enable individuals to make copies for transformative uses, or for social, private or domestic purposes. Ireland has now completed an extensive public consultation conducted by its Copyright Review Committee. A report is expected by the end of this year. China is also in the process of modernizing its copyright laws.

Today, with the Copyright Modernization Act now law, depending on the issue and country or territory, we find ourselves at par with, in front of, or often behind, our trading partners in dealing with the challenges posed by digital technologies. A complete analysis of the similarities and differences would be a large undertaking.  However, at a high level (and without considering the differences and nuances of drafting), some observations follow here.

One of the first objectives behind our four copyright bills was to enact legislation required for Canada to ratify the WIPO Treaties. The treaties require this to include, among other things, adequate legal protection and effective legal remedies against the circumvention of TPMs and protection for rights management information. Bill C-11 meets the requirements of the treaties for these rights and its implementation methodology is consistent with those of our major trading partners, including member states of the EU, the US, and Australia. Bill C-11 also includes amendments intended to implement the requirements for the rights of making available and distribution under the treaties.

The international treaties do not prescribe minimum standards for exceptions for internet intermediaries. In the EU, three categories of exceptions are explicitly mandated: a network service exception, an exception for hosts, and a caching exception. The US DMCA has the same categories of exceptions, as well as an exception covering certain activities of search engines. Under Bill C-11, Canada has the same four categories of exceptions, although the wording and conditions associated with each may differ. For example, unlike the US, Canada did not enact a formal notice and takedown regime. On the other hand, as in the EU, the internet intermediary exceptions are intended to apply only to neutral intermediaries and not to a service provider who, for example, is culpable in the infringement including a provider that primarily enables infringement (such as an intermediary who is liable under the new enablement cause of action in Section 27(2.3) of the Act). Unlike in the EU, Bill C-11 contains no express provisions entitling rights holders to obtain orders blocking foreign pirate web sites like the Pirate Bay.

Unlike the US, Canada will have a statutorily-mandated notice and notice regime (once the regulations are established) intended to stem unlicensed file sharing over peer-to-peer networks. In the US, the leading ISPs and creative industries have cooperated to develop a voluntary notice regime under the Center for Copyright Information (CCI), that unlike the bare minimum prescription in Bill C-11, contains escalating provisions intended to educate and curb file sharing by repeat infringers.  Canada did not adopt a form of graduated response that has the proven effect of increasing legitimate sales of cultural products and services such as France’s HADOPI.

As well, the international treaties provide no uniform list of exceptions to exclusive rights that would apply in digital environments. The scope of possible exceptions and limitations to exclusive rights are constrained by the conventions and treaties to which countries like Canada are a party, such as the Berne Convention, TRIPs, NAFTA, the WIPO Treaties, and the Rome Convention. The most important of these international constraints on exceptions and limitations is the Three Step Test.

The Copyright Modernization Act creates an unprecedented breadth of the new exceptions. For example, and to my knowledge, no country has a copyright law that expressly exempts: format and time shifting of any works including onto devices or a cloud for personal use and without levies; creating and disseminating user generated content for non-commercial purposes; fair dealing for educational purposes without express limitations on the users, the categories of use, or associated conditions; broad rights of educational institutions to make copies of publicly available materials (PAM); and reverse engineering for encryption research and security testing. Some countries may have one or more of these exceptions, usually, however, in a much narrower form. Most have none. Some are studying whether to expand their laws to cover some of these. Some of the exceptions, such as for making and disseminating user generated content (UGC), are without precedent anywhere. Individually and cumulatively the exceptions in Bill C-11 could prompt questions about Canada’s compliance with international obligations.

A lot has also happened since 2005 in the dialogues about copyright. Opponents of copyright now strenuously lobby to thwart meaningful changes to the law that might interfere with free and uncompensated use of copyrighted materials. Self-proclaimed internet and “free culture” advocates increasingly use a playbook of tools, including social media, to spread highly emotive messages in order to turn public opinion. Moreover, some major technology companies and their industry organizations are now publicly advocating for freer or totally uncompensated uses of copyright materials claiming that copyrights stifle innovation in digital services. This has led to vigorous rejoinders by representatives of the cultural community who cite these desired uses as a “Free Ride” that hurts creators and stifles investment and innovation in the creation and dissemination of cultural products. ACTA was a casualty of these developments as was the US legislation known as SOPA.

The Internet activist playbook was brought to Canada during the copyright reform process. For example, Michael Geist, who has been held out as a poster child for Internet activists, the Canadian Coalition for Electronic Rights (CCER), and others used the playbook to actively promote eviscerated legal protection for TPMs that would have prevented Canada from meeting its obligations under the WIPO Treaties. In the case of the CCER, which actively tried to game the 2009 copyright consultations to gut legal protection for TPMs, it was presumably so that its members could continue to distribute devices that would enable individuals to illegally download and use pirated copies of video game software and other products. It was also used to press for amendments to the format and time shifting exemptions to enable individuals to legally hack and copy copyright content protected by TPMs. The proposals would have undermined the government’s policy of encouraging innovation in digital products and services beneficial to consumers and the public at large. The playbook was also used to try and dissuade the Government from making technical amendments to the wording of the new enablement provision so that it could be useful against its intended targets, pirate sites and services like isoHunt. The government refused to give effect to these positions in spite of the full playbook monty.

Today, as the Copyright Modernization Act comes into force, Canada ends one chapter of reform to bring Canada’s copyright laws into the digital age. It took Canada a long time to get here. In that time a lot has changed. Given the inexorable changes in technology and the experiences of our trading partners, we can expect the need for more reforms sooner rather than later.

* Amended

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