Copyright Board harmonization good policy

June 11th, 2018 by Barry Sookman Leave a reply »

The Hill Times published my Op-ed “Copyright Board harmonization good policy” earlier today. The unedited version with endnote references is below.

Everyone agrees that the Copyright Board needs fixing. A Senate Committee recommended a full review in 2016. The Government acted on the recommendation by convening a public consultation and received numerous submissions.

One of the Government’s options to make the Board more effective is to harmonize the availability of statutory damages so they are available to all creators represented by collectives and not only those represented by the performing rights societies SOCAN and Re:Sound.

Michael Geist (“Snatching defeat from the jaws of victory” Hill Times 06/04/2018) opposes harmonization. His opposition does not withstand scrutiny.

He claims that removing the discriminatory treatment between classes of collectives would pre-empt the work of the Industry committee doing the mandatory copyright review. But, the Government is approaching copyright reform on two tracks and harmonizing statutory damages is squarely within the Board consultation. The consultation paper asked whether the different collective administrative regimes could be harmonized and specifically whether the statutory damages regime should apply to all collectives.[1]

Both Ministers in charge of copyright stated that a goal of Board reform is get creators paid faster. Heritage Minister Joly stated “we will reform the Copyright Board to ensure that we…pay our artists faster and reduce costs for all parties” [2] and also to “enable creators to efficiently access…stable streams of revenue.” ISED Minister Bains emphasized reforms to provide “an efficient, transparent, stable and predictable regulatory environment.” [3]

Understanding the fundamental link between mechanisms that lead to a tariff being set by the Board and the ability to predictably collect royalties – and in response to the Government’s specific question as to whether all collectives should be treated equally – creators supported harmonization.

Geist’s suggests that only Access Copyright wants harmonization. In fact, it was supported by collectives and industry groups representing creators from Quebec and across Canada and from the spectrum of the cultural industries including program producers, visual and media artists, music artists, performers, composers, publishers, and makers of sound recordings, and authors and publishers of books.[4]

Geist argues that the proposal would have “a dramatic impact on substantive copyright issues such as fair dealing”. This is just wrong. The Board must when setting tariffs take into account – and not include in royalties payable under a tariff – uses of works covered by fair dealing. The only thing the proposal would do is to provide a more effective means of ensuring that users respect tariffs and the Board setting process by paying royalties determined by the Board to be “just and equitable” for the non-exempt uses.

Geist incorrectly claims that harmonization threatens “to create massive liability risks for some copyright stakeholders”. Not true. Users can appear before the Board to oppose a tariff, argue that dealings are fair dealings, or for a lower royalty. Once a tariff is certified users know what has to be paid. The integrity and respect for the Board process is undermined if creators wait years for a tariff to be certified and still can’t get paid.

Geist denies that statutory damages act as a deterrent against infringements, promote settlement negotiations, and are an efficient use of court resources. He is wrong again.

When statutory damages were first introduced into law the Government published a Fact Sheet. It explained, contrary to Geist’s claims, that statutory damages provide deterrents against infringement, better compensate copyright owners, ease the evidentiary burden in infringement proceedings, reduce the costs of litigation, and encourage settlements. The additional rational for statutory damages for collectives included “to encourage users to obtain the appropriate licences beforehand”. [5]

There is no good reason to treat creators represented by some collectives worse than creators represented by sister collectives. Both should have the right to statutory damages. The technical lacuna in the existing regime unfairly discriminates against creators represented by collectives that are not performing rights societies. Geist argues this can be justified because only the latter collectives are compelled to apply for tariffs. But the distinction between collective types is one without a material difference.

First the tariff process is compulsory for Canadian Retransmission Collective (CRC). Second, in both regimes the copyright holder has the option to sue for infringement if a user refuses to pay the tariff or the collective can sue for payment of royalties under the tariff; the only difference in the regimes is that the performing right society SOCAN must first file tariffs. In both cases copyright holders cannot sue a person for infringement who has paid or offered to pay the applicable tariff.[6] Third, for all practical purposes creators have to rely on the collective regime. Many don’t have the resources to track down or negotiate licenses with thousands of users for thousands of works, especially with the explosion of uses arising from digitation and the Internet.

Ministers Joly and Bains established the Board consultation process to improve the efficiency and effectiveness of the Board and to help creators get paid faster. The Government harmonization of statutory damages would accomplish this goal. The removal of the discriminatory treatment also fully comports with the stated policy objectives for statutory damages described by the government more than 20 years ago and which are still valid today.

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[1] The goals of the consultation were broad including to “gather input from stakeholders and Canadians regarding options to ground legislative and regulatory reforms… that could better position the Board to fulfill its critical purpose efficiently and effectively in an evolving economic and cultural context.” The Consultation paper asked “Certain other elements unique to one or more of the current regimes could be maintained and applied broadly, such as the limitation upon statutory damages in the mandatory regime.” That sentence ended with a footnote to Section 38.1(4) of the Act which provides for statutory damages of between 3 and 10 times the royalties due under a tariff.

[2]Launch of Creative Canada – The Honourable Mélanie Joly, Minister of Canadian Heritage”, Speech, Sept 28, 2017

[3]Consultations launched on reforming Copyright Board of Canada”, August 9, 2017.

[4] The industry groups and collectives included Canadian Retransmission Collective, Copyright Visual Arts, Artisti, CMRRA, Sodrac, Re:Sound, The Writer’s Union of Canada, International Publishers Association, Canadian Publisher’s Council, Association of Canadian Publishers , Access Copyright, and Canadian Copyright Institute.

[5] See, “Fact Sheet on copyright Remedies” (originally available at http://www.ic.gc.ca/eic/site/ippd-dppi.nsf/eng/ip00090.html, and still available at http://www.ic.gc.ca/eic/site/ippd-dppi.nsf/eng/ip00090.html), reproduced, in part below):

Background

An Act to Amend the Copyright Act (Bill C-32), adopted in April 1997, introduced new remedies for creators of all kinds of works. These remedies, which came into force on October 1, 1999, are designed to provide stronger deterrents against copyright infringement and to better compensate copyright owners for losses suffered because of infringement.

Because the extent of infringement is particularly difficult to prove, copyright owners were often inadequately compensated for losses suffered as a result of infringement of their rights. Bill C-32 introduced that guarantee a minimum award once infringement is proven, and which should serve to deter future infringements.

Why did the Bill introduce a statutory damages regime in the Copyright Act?

A copyright owner who commences proceedings for infringement must prove not only the infringement, but also the losses suffered as a result. However, it is often difficult, sometimes impossible, to prove such losses because evidence as to the extent of infringement is usually difficult and/or expensive to find. Statutory damages alleviate this difficulty by guaranteeing a minimum award of damages once infringement is established.They also ease the evidentiary burden on the plaintiff in proceedings for infringement, deter future infringements, reduce the cost of litigation and encourage the parties to settle matters out of court.

Collective societies

Collective societies that license the use of works or other subject-matter in which copyright subsists may recover, as statutory damages, the value of the royalties (or price of the licence) multiplied by a factor between three and 10, as the court considers just. This provision maintains proportionality between the value of a royalties (i.e. the loss incurred by the copyright owners) and the damages awarded. The use of a multiplying factor is intended to encourage users to obtain the appropriate licences beforehand.

[6] Copyright Act, Sections 67.1(4), 68.2(2), 70.17. Note, in the case of performing rights in music administered by SOCAN the holder of the copyright or exclusive licensee has the right to sue for infringement without the Minister’s consent if SOCAN has filed a tariff and the user has not paid and is refusing to pay the tariff or SOCAN can sue for statutory damages. Re:Sound’s members only right is to collect equitable remuneration through Re:Sound.

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