The accused, Richard O’Dwyer, owned and operated the site that offered to the public free downloading and/or streaming of thousands of copyrighted movies and television programs, without authorization from the copyright holders. His site was hosted at an ISP in the Netherlands. The site, TVShack.net, contained links to third party websites that hosted thousands of movies and television programs from which copyrighted first run and other movies and television programs could be downloaded or streamed. Through his site he encouraged users to add links to infringing content including by giving users a step by step “how to” guide and FAQ.

O’Dwyer did not charge users for access to the site. However, the complaint suggested he earned substantial advertising revenues with over $230.000 in payments from advertising been identified. The site was very popular. According to Alexa.com, TVShack.net was the 1779^th most popular website in the world and the 1419th in the United States.

O’Dwyer’s site was shut down when its domain was seized. Not to be deterred, he promptly registered a new domain name, TVShack.cc. This site was allegedly hosted on a server located at an ISP either in Germany or the Netherlands.

The request for O’Dwyer to stand trial in the US required the UK prosecution to prove that the alleged offense would be a crime in the US as well as a comparable offense carrying a minimum of 12 months imprisonment under UK law. The prosecution contended the comparable offence would be a violation of S.107 (2A) of the Copyright, Designs and Patents Act 1988 (the CDPA). This section makes the following a crime:

“A person who infringes copyright in a work by communicating the work in public  (a) in the course of business, or

(b) otherwise than in the course of business but to such an extent as to affect prejudicially the owner of the copyright commits an offence if he knows or has reason to believe that, by doing so  he is infringing copyright in that work”.

Section 20(2) of the CDPA provides that references to communication to the public are to communication to the public by electronic transmission, and in relation to a work include the making available to the public of the work by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them. So for the extradition condition to be met it had to be shown that the links accessible from TVShack  made available the files stored on the remote cyberlockers and that the acts of making available would be covered by the territorial scope of the CDPA.

O’Dwyer had argued that the links at his site did not make the content available to the public. Rather, he contended that operators of the cyberlockers made them available. He also argued, relying on an earlier UK case R v Rock & Overton (Crown Court in Gloucester (T20097013) Ticehurst J., on 6^th February 2010) and a decision of Tamberlin, J of the Australian Federal Court in Universal Music Australia Pty Ltd v Cooper [2005] FCA 972 affirmed [2006] FCAFC 187 (18 December 2006) that TVShack was an innocent intermediary protected by the conduit exemption in the UK Electronic Commerce (E.C. Directive) Regulations 2002. These arguments were rejected by the Judge who held that O’Dwyer would be criminally liable under the CDPA for making available infringing content from the foreign cyberlocker sites from the TVShack linking site. In so ruling he said the following:

I am grateful to both learned counsel for their original and additional written submissions as well as oral argument. Without, I hope, discourtesy the lengthy submissions come to a comparatively narrow dispute. Mr Cooper argues nothing in the instant Request amounts to a basis for saying Richard O’Dwyer “made available” copyright material that came from remote websites not the two domain names operated by Richard O’Dwyer… Reliance is placed on HHJ Ticehurst’s adopting of Tamberlin, J’s approach in the Australian case of Cooper supra. At para 48 HHJ Ticehurst found “no recordings were actually stored on the defendant’s website” and that, adopting Tamberlin, J’s words “it is the remote websites which make available the sound recordings”, hence his Honour’s upholding of the “mere conduit” defence. Mr Jones… contends S.107 (2A) is properly reflective of Richard O’Dwyer’s conduct which can be distinguished from Rock & Overton. Firstly both TVShack websites were entirely in the hands of Richard O’Dwyer and his co conspirators requiring third parties to sign up to TVShack and be vetted before going further. Secondly he argues, unlike Rock & Overton, there was no attempt to protect copyright, he, Richard O’Dwyer, knew materials were subject to copyright and actively taunted already cited efforts in June 2010 to seize TVShack.net. Accordingly Mr Jones argues (@ para 15 of his written submissions of 31^st October 2011) “O’Dwyer would not be able to avail himself of the “mere conduit” defence enumerated in Regulation 17 because he was intimately involved in deciding who was allowed to post links on the TVShack websites, which links would be posted…” (etc) & ( para 16 continues) “… a plain reading of the phrase “make available” in this context makes clear O’Dwyer “made available copyrighted material”. HHJ Ticehurst (@ para 71) in Rock & Overton held “make available should bear its ordinary and natural meaning”. He distinguished between providing money “directly to” another as opposed to a financial adviser who may “point” another to a bank meaning the bank alone “makes available the money”.

I have endeavoured to weigh these subtle distinctions. The diagrams of how as a matter of electronic mechanics (if I may term it) the TVShack websites actually operated favour HHJ Ticehurst’s restrictive construction. To my mind there is much in the distinction factually, always remembering these matters are allegations of conduct which a trial court alone can resolve – that Mr Jones contends between the instant matter and Rock & Overton. I also have in mind the mischief Parliament had in mind. Accordingly in my judgement I am satisfied the conduct alleged in the instant request meets the dual criminality test and would be an offence in this jurisdiction…

This has necessarily been a lengthy ruling given the arguments and material put  forward. A dispassionate appraisal of all matters is the essential function of any court. I acknowledge the endeavours of both learned counsel.  I repeat again all matters have been considered even if not expanded upon or cited directly here.  That said, for the reasons given, I reject all challenges advanced to this Request. No bars or other challenge being raised or found I send the case to the Secretary of State (for her consideration of the statutory criteria) pursuant to  Section 87(3) Ex Act 2003. Richard O’Dwyer has the right to pursue an appeal to the High Court so long as it is submitted in time and in proper form (s 103 Ex Act 2003) but cannot be heard until after the Secretary of State has confirmed an order for extradition.

The liability of linking sites for copyright infringement is being actively litigated in the US.  The U S Seventh Circuit Court of Appeals has an appeal before it in the Flava Works, Inc. v. Gunter. case that is examining whether inline linking can give right to a claim for direct infringement. A District Court judge ruled in the case that inline linking sites can be liable for direct infringement of copyright.

Richard O’Dwyer has the right to appeal the decision to the High Court. He has already announced his intention to do so. It is likely these issues will therefore be dealt with again in the UK by the High Court.

My slides and/or the paper summarize the following copyright cases from Canada, the USA, UK and  Europe:

CANADA

Re: Sound v Motion Picture Theatre Association of Canada 2011 FCA 70

Reference re Broadcasting Act 2011 FCA 64

Crookes v. Newton 2011 SCC 47

France Animation v Robinson, 2011 QCCA 1361

Aga Khan v. Tajdin, 2011 FC 14

9077-6204 Québec inc. c. Blanchard 2011 QCCQ 205

Training and Management Pro-Health Inc. c. Sampietro 2011 QCCS 4256

Perfect 10, Inc. v. Google, Inc., 2011 FC 348

Harmony Consulting Ltd. v. G.A. Foss Transport Ltd., 2011 FC 340

Century 21 Canada Limited Partnership v. Rogers Communications Inc., 2011 BCSC 1196

Layette Miniôme inc. c. Jarrar 2011 QCCS 1743

Louis Vuitton Malletier S.A. v. Singga Enterprises (Canada) Inc., 2011 FC 776

1429539 Ontario Limited v. Café Mirage Inc., 2011 FC 1290

Suttie v. Canada (Attorney General), 2011 FC 119

SOCAN v v. IIC Enterprises Ltd. (Cheetah’s Nightclub), 2011 FC 1088

Robertson v. ProQuest Information and Learning LLC, 2011 ONSC 2629

R. c. Fiset 2011 QCCQ 1344

Reprographic Reproduction, 2011-2013 Interim Decision March 16, 2011

IPC Order MO-2635/June 30, 2011

R c. Gravel 2011 QCCQ 2517

Flow Films v. Global Wealth Trade Corp. [2011] O.J. No. 674

Setanta Sports Canada Limited v. 840341 Alberta Ltd. (Bres’in Taphouse) 2011 FC 709

Velsoft Training Materials Inc. v. Global Courseware Inc. 2011 NSSC 274

Fabrikant v. Swamy [2011] QJ No 2826

Statement of Royalties to be Collected for the Communication to the Public by Telecommunication, in Canada, of Musical Works and of Published Sound Recordings Embodying Musical Works and Performers’ Performances of Such Works (SOCAN and Re:Sound Tariffs 1.C (CBC – Radio 2006-2011) [2011] C.B.D. No. 3 (Copyright Board, July 8, 2011)

Statement of Royalties to be Collected for the Performance in Public or the Communication to the Public by Telecommunication in Canada, of Published Sound Recordings Embodying Musical Works and Performers’ Performances of Such Works (Re:Sound Tariff No. 6.A – Use of Recorded Music to Accompany Dance, 2008-2012) [2011] C.B.D. No. 4 (Copyright Board, July 15, 2011)

UNITED STATES

Agency France Presse v Morel, 769 F.Supp.2d 295 (S.D.N.Y. 2011)

Warner Bros. Entertainment Inc v WTV Systems, Inc. 2011 WL 4001121 (C.D.Cal. Aug, 1, 2011)

Flava Works, Inc, v Gunter dba myVidster, 2011 WL 1791557 (N.D.Ill.May 10, 2011)

Flava Works, Inc, v Gunter dba myVidster 2011 WL 3205399 (N.D.Ill. July 27, 2011)

Flava Works, Inc, v Gunter dba myVidster, 2011 WL 3876910 (N.D.Ill. Sep. 1, 2011)

Perfect 10, Inc v Megaupload Limited 2011 WL 3203117 (S.D.Cal., Jul. 27, 2011)

Disney Enterprises, Inc v Hotfile 798 F.Supp.2d 1303 (S.D. Flo. 2011)

UMG Recordings v Shelter Capital Partners LLC 101 U.S.P.Q.2d 1001 (9th. Cir. 2011)

Capitol Records, Inc. v. MP3tunes, LLC, 101 U.S.P.Q.2d 1093 (S.D.N.Y.2011)

Arista Records LLC v. MyxerInc., f/k/a Visible Technologies, Inc., Case No. CV 08-3935-GAF-JC (C.D. Cal. April 1, 2011)

The Authors Guild et al v. Google Inc.  770 F.Supp.2d 666 (S.D.N.Y. 2011)

Penguin Group (USA) Inc. v. American Buddha 16 N.Y.3d 295 (Ct.App.N.Y. 2011)

Kernal Records Oy v. Mosley,  794 F.Supp.2d 1355  (S.D.Fla. 2011)

Seng-Tiong Ho v. Taflove, 2011 WL 2175878 (7th.Cir, 2011)

Softech Worldwide LLC v. Internet Technology Broadcasting Corp. 761 F.Supp.2d 367 (E.D.Vir.2011)

Righthaven LLC v. Hoehn 792 F.Supp.2d 1138 (D.C.Nev.2011)

Capitol Records Inc v. Jammie Thomas-Rasset 2011 WL 3211362 (D.C.Minn.2011)

UK and COMMONWEALTH

Lucasfilm Ltd & Ors v Ainsworth & Anor [2011] UKSC 39 (27 July 2011)

Football Dataco Ltd & Ors v Sportradar GmbH & Anor [2011] EWCA Civ 330 (29 March 2011)

Twentieth Century Fox Film Corp & Ors v British Telecommunications Plc [2011] EWHC 1981 (Ch) (28 July 2011)

ITV Broadcasting Ltd & Ors v TV Catchup Ltd [2011] EWHC 1874 (Pat) (18 July 2011)

The Newspaper Licensing Agency Ltd & Ors. v Meltwater Holding BV & Ors [2011] EWCA Civ 890 (27 July 2011)

Roadshow Films Pty Ltd. v  iiNet Limited, [2011] FCAFC 23 (decision of High Court pending)

Super Cassettes Industries v. MySpace Inc. High Court of Delhi, judgment pronounced on 29/07/2011

Dynamic Supplies Pty Limited v. Tonnex International 2011 FCA 362  (Federal Court of Australia)

Media CAT v. Adams 2011 EWPCC 6  and 2011 EWPCC 10  (Patents County Court)

Football Dataco Ltd  v. Yahoo! UK Limited 2011 EWCA Civ 330 (UK Court of Appeal)

Forensic Telecommunications Services Ltd v Chief Constable of West Yorkshire 2011 EWHC 2892 (Ch)

R (on the application of British Telecommunications plc and another) v. The Secretary of State for Business, Innovation and Skills 2011 EWHC 1021 (Admin)

EU (other than UK)

La société Des Auteurs des Arts Visuels et de L’image Fixe Visual Auteurs (SAIF) v. Google France  S.A.R.L. and Google Inc., Paris Court of Appeal, Jan. 26, 2011

Google v Copiepresse et al, Brussels Court of Appeal (9th Chamber) May 5, 2011

Premier League Football (ECJ Case C-403/08),  4 October 2011

Scarlet Extended SA v SABAM, (ECJ Case C-70/10) 24 November, 2011

Stichting de Thuiskopie v Opus (ECJ Case C-462/09) 16 June 2011

The slides can be seen below:

According to the USTR “The scale and popularity of these markets can cause economic harm to U.S. and other IP right holders.  In addition, products sold at these markets may pose possible health and safety risks to consumers.”

We were recognized in the following markets:

B2B and B2C

Modchip.ca and Consolesource:  Both sites, reportedly based in Canada, allegedly sell circumvention devices and components used to circumvent technological protection measures on game consoles.

These are the type of sites and services the TPM anti-trafficking prohibitions in Bill C-11 are intended to address.

BitTorrent Indexing

IsoHunt:  Canada-based IsoHunt is one of the largest BitTorrent indexes in the world, ranking among the top 300 websites in global traffic and among the top 600 in U.S. traffic, according to Alexa.com.  At least one U.S. court has found liability in cases involving IsoHunt.

Kat.ph (formerly kickasstorrents):  Another popular indexing site, this site, which reportedly is based in Canada, Ukraine and Romania, is notable for its commercial look and feel.  The site is currently ranked by Alexa.com among the 320 most visited sites in the world.

torrentz.eu (formerly torrentz.com):  This site, which reportedly is based in Canada, Panama and Switzerland, is a major aggregator of torrents from other BitTorrent sites, and currently ranks among the top 150 sites in the world.

These are the types of sites the new enabling provision in Bill C-11 is intended to address.

The majority reasons were delivered by Abella J., on behalf of the Coram consisting of McLachlin C.J. and Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell JJ. The majority concluded that hyperlinks are, in essence, references, which are fundamentally different from other acts of “publication”.  Adopting a bright line test, the Court ruled that a defendant can only be liable if he/she uses a reference in a manner that in itself conveys defamatory meaning about the plaintiff. Only when a hyperlinker presents content from the hyperlinked material in a way that actually repeats the defamatory content, should that content be considered to be “published” by the hyperlinker. According to the Court: 

A hyperlink, by itself, should never be seen as “publication” of the content to which it refers.  When a person follows a hyperlink to a secondary source that contains defamatory words, the actual creator or poster of the defamatory words in the secondary material is the person who is publishing the libel. Only when a hyperlinker presents content from the hyperlinked material in a way that actually repeats the defamatory content, should that content be considered to be “published” by the hyperlinker.

 Where a defendant uses a reference in a manner that in itself  conveys defamatory meaning about the plaintiff, the plaintiff’s ability to vindicate his or her reputation depends on having access to a remedy against that defendant.  In this way, individuals may attract liability for hyperlinking if the manner in which they have referred to content conveys defamatory meaning; not because they have created a reference, but because, understood in context, they have actually expressed something defamatory (Collins, at paras.  7.06 to 7.08 and 8.20 to 8.21). This might be found to occur, for example, where a person places a reference in a text that repeats defamatory content from a secondary source (Carter, at para. 12).

Making reference to the existence and/or location of content by hyperlink or otherwise, without more, is not publication of that content.  Only when a hyperlinker presents content from the hyperlinked material in a way that actually repeats the defamatory content, should that content be considered to be “published” by the hyperlinker.  Such an approach promotes expression and respects the realities of the Internet, while creating little or no limitations to a plaintiff’s ability to vindicate his or her reputation. 

The Court noted that its reasons for decision dealt only with the “deep” and “shallow” hyperlinks that were in issue in the case. The Court clearly indicated that embedded or automatic links might be assessed differently.

I am aware that distinctions can be drawn between hyperlinks, such as the deep and shallow hyperlinks at issue in this case, and links that automatically display other content. The reality of the Internet means that we are dealing with the inherent and inexorable fluidity of evolving technologies.  As a result, it strikes me as unwise in these reasons to attempt to anticipate, let alone comprehensively address, the legal implications of the varieties of links that are or may become available.  Embedded or automatic links, for example, may well prove to be of consequence in future cases, but these differences were not argued in this case or addressed in the courts below, and therefore need not be addressed here.

McLachlin C.J. and Fish J. wrote joint concurring opinions. They also noted that the decision of the Court did not apply to automatic or embedded hyperlinks. They agreed substantially with the majority. However, they were of the opinion that a hyperlink should constitute publication if, read contextually, the text that includes the hyperlink constitutes adoption or endorsement of the specific content it links to.  A mere general reference to a website is not enough to find publication.

Deschamps J., in separate reasons concurring in the result, would have required two criteria to be satisfied before finding liability based on the use of a hyperlink: (1) that the defendant performed a deliberate act that made defamatory information readily available to a third party in a comprehensible form, and (2) that the defamatory matter was brought by the defendant or his agent to the knowledge and understanding of some person other than the plaintiff.

The Crookes case is not only important because of the bright line rule it developed to address when the use of hyperlinks can be defamatory. Its importance will also be measured by the expansive, policy laden, reasons of the Court and its thorough canvassing of how the innocent disseminator defence appies to ISPs.

The Court clearly took into account and was influenced by the potential impact of its decision on freedom of expression on the Internet.  According to the Court:

“The Internet cannot, in short, provide access to information without hyperlinks.  Limiting their usefulness by subjecting them to the traditional publication rule would have the effect of seriously restricting the flow of information and, as a result, freedom of expression.  The potential “chill” in how the Internet functions could be devastating, since primary article authors would unlikely want to risk liability for linking to another article over whose changeable content they have no control.  Given the core significance of the role of hyperlinking to the Internet, we risk impairing its whole functioning.  Strict application of the publication rule in these circumstances would be like trying to fit a square archaic peg into the hexagonal hole of modernity.”  

“The Internet’s capacity to disseminate information has been described by this Court as ‘one of the great innovations of the information age’ whose ‘use should be facilitated rather than discouraged’ (SOCAN, at para. 40, per Binnie J.).  Hyperlinks, in particular, are an indispensable part of its operation…” 

The Court’s strong language will have implications on future Internet cases that involve balancing important values such as regulating hate speech, the distribution of pornography over the Internet, and the regulation of unwanted commercial messages (spam such as under CASL) with the value of freedom of expression.

The reasons of the Court also clarify the liability of ISPs for disseminating defamatory materials under the innocent disseminator defence. The reasons delivered by members of the Court strongy suggest that purely passive Internet intermediaries such as Internet hosts will not be liable for publishing defamatory content merely because their systems are used to facilitate the publication of the content. However, once ISPs or other Internet interemdiaries acquire actual or constructive knowledge (knowledge of circumstances to put them on notice) that their systems are being used to disseminate defamatory content, they may be liable for publishing it unless they take steps to prevent the publication.

The majority stated the following in discussing the innocent disseminator defence:

Defendants obtained some relief from the rule’s significant breadth with the development of the “innocent dissemination” defence, which protects “those who play a secondary role in the distribution system, such as news agents, booksellers, and libraries”:  Allen M. Linden and Bruce Feldthusen, Canadian Tort Law (8th ed. 2006), at pp. 783-84; see also Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers, 2004 SCC 45, [2004] 2 S.C.R. 427 (“SOCAN”), at para. 89; Philip H. Osborne, The Law of Torts (4th ed. 2011), at p. 411.  Such “subordinate distributors” may escape liability by showing that they “have no actual knowledge of an alleged libel, are aware of no circumstances to put them on notice to suspect a libel, and committed no negligence in failing to find out about the libel” (SOCAN, at para. 89; Vizetelly v. Mudie’s Select Library Ltd., [1900] 2 Q.B. 170 (C.A.), at p. 180;  Brown, at para. 7.12(6)(c); and also Sun Life Assurance Co. of Canada v. W. H. Smith & Son Ltd., [1933] All E.R. Rep. 432, at pp. 434 and 436). 

Recently, jurisprudence has emerged suggesting that some acts are so passive that they should not be held to be publication.  In Bunt v. Tilley, [2006] EWHC 407, [2006] 3 All E.R. 336 (Q.B.), considering the potential liability of an Internet service provider, the court held that in order to hold someone liable as a publisher, “[i]t is not enough that a person merely plays a passive instrumental role in the process”; there must be “knowing involvement in the process of publication of the relevant words” (para. 23 (emphasis in original); see also Metropolitan International Schools Ltd. v. Designtechnica Corp., [2009] EWHC 1765 (Q.B.)). 

Deschamps J. expressed a similar opinion stating:

 If the person who made the reference was unaware that the information referred to was defamatory, the defence of innocent dissemination may be available: Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers, 2004 SCC 45, [2004] 2 S.C.R. 427 (“SOCAN”), at para. 89…

 Byrne and its progeny are consistent with the requirement that any finding of publication be grounded in a deliberate act. If a defendant was made aware (or had reason to be aware) of defamatory information over which he or she had sufficient control but decided to do nothing about it, this nonfeasance might amount to a deliberate act of approval, adoption, promotion, or ratification of the defamatory information (see, e.g., Frawley v. State of New South Wales, [2007] NSWSC 1379). The inference is not automatic, but will depend on an assessment of the totality of the circumstances…

 This requirement of a deliberate act has already been applied in the context of the Internet. In Godfrey, the defendant Internet service provider (“ISP”) had received a “posting”, which it stored on its news server. The plaintiff had notified the ISP that the posting was defamatory and requested that it be removed, but the defendant had allowed it to remain on its servers until it automatically expired ten days later. The court held that the ISP’s failure to act, once it had become aware of the defamatory information over which it had control, constituted an act of publication once an Internet subscriber had accessed the posting. In the circumstances of the case, the ISP’s failure to act amounted to a deliberate act of approval, adoption, promotion or ratification of the defamatory information.

 In Bunt v. Tilley, [2006] EWHC 407, [2006] 3 All E.R. 336 (Q.B.), the defendant ISPs were found not to be publishers because, even though they provided services, their role in the publication process was a passive one. This aspect of the decision in Bunt is a welcome development and should be incorporated into the Canadian common law. Those whose services are used to facilitate the communication of defamatory information may be shielded from responsibility for publication if they played a “passive instrumental role” in that process (para. 23)…

A case that illustrates the nature of activities engaged in by a person who plays the role of a mere conduit is Metropolitan International Schools Ltd. v. Designtechnica Corp., [2009] EWHC 1765 (Q.B.). In that case, the question was whether Google Inc. could be found to be the publisher of the search result “snippets” that were generated automatically by its search engine in response to search terms entered by users. Eady J. found that there was no publication, because Google Inc. played a passive instrumental role in facilitating the appearance of the snippets on the users’ screens (at paras. 50-51).

In the SOCAN Tariff 22 case referred to by the majority and Deschamps J., the Supreme Court used the innocent disseminator defence criteria  for determining whether an ISP is entitled to the “common carrier” defense in para. 2.4(1)(b) of the Copyright Act. They also applied it in ruling that an ISP that hosts copyright infringing content as a mere passive host is not liable for authorizing the communication of  that content to the public, but may become liable once it acquires knowledge of the infringement if it fails to take steps to prevent it.

Section 2.4(1)(b) is not a loophole but an important element of the balance struck by the statutory copyright scheme.  It finds its roots, perhaps, in the defence of innocent dissemination sometimes available to bookstores, libraries, news vendors, and the like who, generally speaking, have no actual knowledge of an alleged libel, are aware of no circumstances to put them on notice to suspect a libel, and committed no negligence in failing to find out about the libel…

In the present appeal, the Federal Court of Appeal stated that, in the case of host servers, “an implicit authorization to communicate infringing material might be inferred from their failure to remove it after they have been advised of its presence on the server and had a reasonable opportunity to take it down” (para. 160).  Reference was made to Apple Computer Inc. v. Mackintosh Computers Ltd., reflex, [1987] 1 F.C. 173, aff’d 1990 CanLII 119 (SCC), [1990] 2 S.C.R. 209, at pp. 211 and 208, citing C.B.S. Inc. v. Ames Records & Tapes Ltd., [1982] 1 Ch. 91, at p. 110, i.e., an Internet Service Provider may attract liability for authorization because “. . . indifference, exhibited by acts of commission or omission, may reach a degree from which authorisation or permission may be inferred.  It is a question of fact in each case . . . .”  See also Godfrey v. Demon Internet Ltd., [1999] 4 All E.R. 342 (Q.B.)…

I agree that notice of infringing content, and a failure to respond by “taking it down” may in some circumstances lead to a finding of “authorization”.  However, that is not the issue before us.  Much would depend on the specific circumstances… 

In the Crookes case both the majority and Deschamps J., used the SOCAN case as an authority for interpreting and explaining the scope of the innocent disseminator  defense. The Court thus applied the same innocent disseminator principles for assessing the liability of ISPs for copyright and defamation purposes when they acquire actual or construcitve knowledge that their systems are being used in a tortious way by third parties.

Deschamps J., would also have applied these principes in determining a person’s liability for hyperinking.

The Court has in the past alluded to the existence of an “innocent dissemination” defence: SOCAN. In that case, this defence was described as follows (at para. 89):

[T]he defence of innocent dissemination [is] sometimes available to bookstores, libraries, news vendors, and the like who, generally speaking, have no actual knowledge of an alleged libel, are aware of no circumstances to put them on notice to suspect a libel, and committed no negligence in failing to find out about the libel.

In my view, the innocent dissemination defence should be made available to hyperlinkers, provided that the criteria mentioned in SOCAN are satisfied. There are good reasons for so holding. Hyperlinkers have not created or developed the information to which they link. Moreover, although the creation of a hyperlink may often be a deliberate act that makes the creator’s role more than a passive one, the hyperlinker often has little control, if any, over the linked information. This last point is significant given the dynamic nature of the Internet. A hyperlink may originally be created to link to information that is not defamatory, but the linked information may subsequently be altered so as to become defamatory without the hyperlinker’s knowledge. In such circumstances, provided that the criteria mentioned in SOCAN are satisfied, the innocent dissemination defence should operate until the moment the hyperlinker becomes aware that he or she is now linking to allegedly defamatory information. If this defence were widely available, it should dissuade overeager

What is interesting to note about the Court’s discussion of the applicability of the innocent disseminator defense to ISP liability, is the Court’s endorsement of the principle that ISPs have to take active measures to remove or disable access to defamatory content from their systems to prevent further dissemination to avoid being liable for defamation. It reached this conclusion after considering its own copyright decision in the Tariff 22 case and after considering intervention briefs from well known advocates for free speech and human rights such as Canadian Civil Liberties Association, Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic, and British Columbia Civil Liberties Association.

The Court’s decision in this regard is not surprising as in the Tariff 22 case the Court recommended that Parliament implement a notice and takedown system to deal with copyright infringing content. It stated that an effective process for dealing with infringing content on host systems “would be the enactment by Parliament of a statutory ‘notice and take down’ procedure as has been done in the European Community and the United States.”

For the record, Industry Minister Christian Paradis said the following in speaking about the Bill in the House:

Mr. Speaker, as you know, this is the second time that the government has introduced this bill. During the previous Parliament and for almost a year, the Copyright Modernization Act—then known as Bill C-32—was carefully examined and debated by parliamentarians and stakeholders.

We know how much time and effort members of Parliament, stakeholders and Canadians spent on this bill. The legislative committee created to examine the bill heard from more than 70 witnesses and received more than 150 submissions. All stakeholders were consulted, and the government received letters from across the country.

We fully expect that when the bill is once again referred to a House of Commons committee the work and testimony from the previous Parliament will be carefully considered and taken into account.

Over the course of the committee hearings on this bill in the last Parliament, there were two clear messages that emerged. The first message was that this bill balances the interests of the various stakeholders. The bill, a product of wide-ranging consultation and discussion, sets out a balanced approach to corporate reform in the digital age. While the government strongly believes that this bill delivers the best balance between the interests of consumers and the rights of the creative community, we are open to technical amendments that may improve the clarity and intent of certain provisions.

Second, we heard that Canada urgently needs to pass legislation to update the Copyright Act. By reintroducing this same bill, parliamentarians will be able to build on this previous work in order to enable the swift passage of these important legislative updates. Each year that Canada goes without modern copyright laws, the need for such modernization becomes more evident as technology evolves and new issues emerge.

The last time the act was changed, there were no MP3 players. Video stores were still full of VHS tapes. No one thought we would be able to take pictures with a cellphone and upload them onto computer screens around the world, or use a cellphone to download songs and movies.

The world has changed so much since then that the Copyright Act seems like a law for a different era. The time has come to modernize Canada’s copyright laws and bring them in line with the demands and technologies of the digital age.

This bill must be passed in order to modernize Canada’s copyright regime in accordance with the government’s digital economy strategy.

Digital technology opens new markets and expands the reach of companies. It brings together people and ideas in a way that was still unimaginable only a few years ago. When individuals, companies and national economies create and adopt these new technologies, a number of important things are achieved. Productivity and innovation increase, and new products, processes and business models see the light of day.

The growth of the digital economy in Canada depends on a clear, predictable and fair copyright regime that supports creativity and innovation while protecting copyright holders.

The global economy remains fragile. This bill will help to protect existing jobs and create new ones. It will spark innovation and attract new investments in Canada. It will give creators and copyright holders the tools they need to protect their work and increase their business. The bill establishes clearer rules that will allow all Canadians to fully participate in the digital economy, both now and in the future.

One of the bill’s main objectives is to balance the interests of all stakeholders in the copyright regime. Achieving this balance has become increasingly complex given the exponential growth of the Internet. Canadians can obtain protected works online, sometimes through revenue-generating platforms or services, but also through free services, both legitimate and illegitimate. Our capacity to use high-quality Web services to obtain, protect and create copyrighted works is essential to our economic success and our cultural presence in the world.

That is why, in 2009, our government turned to Canadians to get their ideas and advice on copyright reform in the digital age. Thousands of individual Canadians, companies and stakeholder organizations shared their opinions on the best way to adapt Canada’s copyright regime to this new age. These consultations showed that Canadians were becoming increasingly aware of the importance of copyright in their daily lives and in our digital economy.

On the one hand, this bill seeks to reflect today’s reality where the private, non-commercial use of copyrighted material is commonplace. The bill would authorize many of these uses and establish parameters for cases which, to date, were not well defined.

For example, Canadians could copy works legally obtained on their computers and mobile devices to enjoy them wherever they may be. They could store content in and retrieve it from the information cloud or use a network PVR service.

It will also be legal to integrate protected works into a work generated by a user for non-commercial purposes. That would include recording a home video of a child dancing to a song, or creating original mixes of songs and videos. This exception requires that the rights and interests of copyright holders be respected. There are many examples where copyright holders have benefited from exposure on the Internet owing to work done by users.

Finally, the bill updates the Copyright Act to reflect new technologies and uses by broadening the exceptions and creating new ones for educational and training institutions, technical procedures, the development of software, broadcasters and the disabled.

I would like to point out that great care was taken when drafting these provisions to reflect the needs and interests of copyright holders. The provisions do place limits and restrictions on the use of protected works.

For example, many of these exceptions do not apply to works protected by a technological protection measure or digital lock. Copyright holders told us that their digital and on-line business models depend on the robust protection provided by digital locks. Therefore, the bill strikes a good balance. It allows Canadians to make reasonable use of content while providing creators and businesses, whose work depends on this content, with the tools and certainty they need to launch new products and services.

While our government knows that the overwhelming majority of Canadians are law-abiding, we are concerned about the threat of major penalties that hang over Canadians who infringe copyright for non-commercial purposes. Currently, those who have been found to violate copyright can be found liable for damages from $500 to $20,000 per work.

If people illegally download five songs, for example, they could theoretically be liable for $100,000. In our view, such penalties are way out of line. As such, the bill proposes to reduce the penalties for non-commercial infringement. Under its provisions, the courts would have the flexibility to award total damages of between $100 and $5,000.

However, while the bill reduces penalties for non-commercial infringements, it still seriously punishes those who profit from copyright infringement. Penalties of $500 to $20,000 per infringement will still apply to piracy for commercial purposes. In addition, the bill proposes new tools to target those who find techniques to infringe online copyright and it sets out serious penalties for those who make money by creating and distributing devices and services designed to hack digital locks. It will be very difficult to benefit from piracy.

Heritage Minister James Moore said the following:

Madam Speaker, I am very pleased to be here with the Minister of Industry. I should also certainly give a great deal of thanks to the President of the Treasury Board for the work that he did on Bill C-32, which was last Parliament’s version of Bill C-11, which we are debating today.

As the Minister of Industry said, the bill contains a number of provisions that Canadians, I think, will welcome and are welcoming. The bill contains provisions that will provide the ability of copyright owners to control the uses of their works to fight online piracy. This is about individual creators and creative industries, like the video game industry, the software industry, the movie industry, and others. It is having the tools to protect their art, their businesses and their jobs.

For example, the bill includes provisions to protect the technological protection measures and authorizes copyright holders to sue those who enable copyright infringement through such means as illegal peer-to-peer file sharing sites. Our government knows that the best way to deal with online copyright violation is to target those who enable this crime and profit from it.

More specifically, Bill C-11 introduces a new definition of civil liability for those who knowingly enable online copyright violation. Online piracy takes revenues away from creators and reduces the incentive to create. This measure sends a clear message that Canada is prohibiting piracy sites and giving copyright holders the tools to protect their activities. What is more, the bill also introduces new provisions to stop those who develop and sell tools and services for getting around technological protection measures.

Canada is among the first jurisdictions in the world, if not the first, to provide its copyright legislation with this very important tool to fight online piracy. At the same time, we are taking steps to ensure that Canadians are aware that they may be infringing copyright. Canadian Internet service providers have developed a unique model in which they tell subscribers when a rights holder notifies them that a subscriber has infringed on copyright material. This is known as notice and notice. The bill formalizes this practice into law. I would just point out here that this is one of the key elements that consumers have come to us and said they want as part of the bill.

We disagree with the American approach with regard to copyright. We have a notice and notice regime in our legislation, not a notice and take down regime as they have in the United States, for very good reason. These provisions are also on top of a wide array of legal protections already provided for in the Copyright Act that rights holders can use to assert their rights.

Educators, students, artists, companies, consumers, families, copyright holders and Canadians in general use technology in a number of different ways, and this bill simply recognizes that reality. It gives creators and copyright holders the necessary tools to protect their works, their investments, and to develop their business through innovative business models. It establishes clearer rules that will allow Canadians to fully participate in the digital economy today and in the future. More specifically, this bill gives creators and copyright holders the tools they absolutely need.

With this legislation Canadians will also be able to create new works incorporating existing publishing or publicly available works, as long as it is done for non-commercial purposes, as my colleague has said. The new user generated content cannot be a substitute for the original work or have the substantial negative impacts on the markets of the original material or on a creator’s reputation.

Canadians with perceptual disabilities will be permitted to adapt legally acquired material to a format that they can easily use. Also, Canadian photographers will benefit from the same authorship rights as creators. Currently, photographers are not considered authors of commissioned works. This legislation changes that.

Consumers and users of content will also see their interests reflected in the bill. Canadians will be allowed to record television, radio and Internet programs to enjoy at their time and choosing with no restrictions as to the device or technology chosen or the time of day.

Under certain conditions, Canadians will also be able to copy for their personal use legally acquired works such as music, movies or other works, on the device or component of their choice. They will be able to make backup copies in the format and on the device or component of their choice.

I would like to close my speech by ensuring the House understands that this was, from the very beginning of the process that we initiated just prior to the summer of 2009, a good faith effort on the part of our government to get copyright legislation done effectively.

The member for Timmins—James Bay was engaged in debate on Bill C-61 when we tabled that legislation. Bill C-61, as it turned out, was not the balance that Canadians were looking for. We think this legislation achieves the balance that Canadians have come to expect. We tabled Bill C-61, there was the fall campaign, and then we came back.

We re-engaged Canadians from the beginning. We went back to square one. We did unprecedented consultation on this legislation. We heard from thousands of Canadians in the process. We went across the country to town halls and we did open, online consultation. We arrived at Bill C-32.

As a result of the participation of thousands of Canadians in that process, we thought we would respect that process.

My observations on the Bill including the areas that will need scrutiny at committee are here.

The legal basis for the order was Article art. 87, §1, al.2 of the Belgian Copyright Act. This provision transposes Article 8(3) of the EU InfoSoc Directive 2001/29/CE. This Article provides that

“Member States shall ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right.”

This obligation of Member States to provide rightsholders with this form of remedy is also found in the EU Directive 2004/48/EC of 29 April 2004 on the enforcement of intellectual property rights. Article 11 (Injunctions) states:

“Member States shall ensure that, where a judicial decision is taken finding an infringement of an intellectual property right, the judicial authorities may issue against the infringer an injunction aimed at prohibiting the continuation of the infringement. Where provided for by national law, non-compliance with an injunction shall, where appropriate, be subject to a recurring penalty payment, with a view to ensuring compliance. Member States shall also ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe an intellectual property right, without prejudice to Article 8(3) of Directive 2001/29/EC.”

Blocking orders can play a crucial role in protecting a local market by preventing or impeding domestic users from accessing a foreign file sharing site. Rightsholders may have (or be given) the tools needed to enjoin a domestic operator from facilitating widespread infringement. But, operators of these sites sometimes seek to circumvent these orders by moving their facilities out of the domestic forum. The effect of these orders can also be undermined by operators of other foreign sites or services who provide access to infringing files to domestic users.

The jurisdiction to make blocking orders against pirate sites and services has been used on many occasions in the EU to protect local markets from foreign file sharing sites. Recently it was used in the UK in Twentieth Century Fox Film Corp & Ors v British Telecommunications Plc [2011] EWHC 1981 (Ch) (28 July 2011) to block a site run by operators seeking to circumvent an injunction order against the operators of the Newzbin file sharing site. Prior to that, and as summarized in the Newzbin case, the power was successfully used in other cases including:

IFPI Danmark v Tele 2 A/S (Copenhagen City Court, 25 October 2006): order granted on application of the Danish branch of IFPI requiring ISP to block access to www.allofmymp3.com, it appears by DNS blocking;

SABAM v Tiscali SA (Brussels Court of First Instance, 29 June 2007): order granted on application of Belgian collecting society requiring ISP to filter and block infringing content;

IFPI Danmark v DMT2 A/S (Frederiksberg Court, 29 October 2008) upheld sub nom Sonofon A/S v IFPI (High Court of Eastern Denmark, 26 November 2008) and sub nom Telenor v IFPI (Danish Supreme Court, 27 May 2010): order granted on application of the Danish branch of IFPI requiring ISP to block access to www.thepiratebay.org (“the Pirate Bay”);

Bergamo Public Prosecutor’s Officer v Kolmisappi (Italian Supreme Court of Cessation, 29 Sept 2009): order requiring ISPs to block access to the Pirate Bay as part of preventative seizure in criminal proceedings;

Columbia Pictures Industries Inc v Portlane AB (Swedish Court of Appeal, 4 May 2010): order granted on the application of the Studios requiring ISP to block access to a tracker website associated with the Pirate Bay;

Constantin Film v UPC (Commercial Court of Austria, 13 May 2011): order granted on application of two film companies requiring ISP to block www.kino.te using IP blocking.

The main reasons given by the Antwerp Court of Appeal for granting the blocking order against The Pirate Bay were summarized by Philippe Laurent in a blog post on the Kluwer Copyright Blog:

- It is clear and uncontested that copyright infringements take place on a massive scale thanks to “The Pirate Bay”…

- The defendants do not commit infringements themselves, but they are nonetheless “intermediaries” in the sense of art. 87, §1, al.2.

- The action brought by the BAF is not a liability action, so the E-commerce Act of 11 March 2003 (transposing the E-commerce Directive 2000/31/CE) is of no help to the ISPs. More specifically, the legal rules providing for a liability limitation to the benefit of ISPs (the Court considers the “mere conduit” liability limitation as provided by art. 12, §3 of Directive 2000/31/CE) is no hindrance to the granting of an injunction order. Furthermore, the blocking measures that are sought by the BAF are no monitoring tasks, as they are limited to the making unavailable of determined websites.

- That the measures sought will probably not put an end to any possible illegal activity on the Internet does not imply that these measures would be disproportionate.

- In order to fight copyright infringements, ISPs may be asked to render specific websites inaccessible to their subscribers. It belongs to the Judge to determine the blocking procedure.

- According to the Court, even though this measure could be more easily circumvented, DNS-blocking is the most acceptable solution, as IP-blocking would be more burdensome to the ISPs and could have more detrimental effects on third parties.

- There are no competition issues at stake, as the defendants are the two biggest Belgian ISPs.

- DNS-blocking is no limitation to the freedom of speech or to other fundamental rights.

- If third parties are affected by the blocking measures, they are free to institute third-party proceedings to contest the ruling.

As noted above, the Court was aware that DNS blocking can be circumvented, as it was almost immediately after the order was issued. Further, it was reported that not all domains were covered by the order. Does the fact that such orders cannot be completely effective militate against having the jurisdiction to make them and exercising that power? The answer to the latter question was addressed by Mr. Justice Arnold in the Newzbin case as follows:

First, it seems likely that circumvention will require many users to acquire additional expertise beyond that they presently possess. Even assuming that they all have the ability to acquire such expertise, it does not follow that they will all wish to expend the time and effort required.

Secondly, evidence filed by the Studios suggests that circumvention measures are likely to lead to slower performance and lower quality downloads, at least unless users are prepared to pay for a certain service provided by a different provider. Again, it is not necessarily the case that all users will be prepared to do this. This is not merely a question of money: there is also a potential security issue with using such services.

Thirdly, it is important not to overlook the question of economics. As I have explained above, Newzbin2 members have to pay a subscription to use it to access content. They will also need to have a Usenet service. For the reasons Mr Hutty himself explains, they will commonly need to use a paid service. Thus they are not getting infringing content for free even as matters stand. If, in addition to paying for (a) a Usenet service and (b) Newzbin2, the users have to pay for (c) an additional service for circumvention purposes, then the cost differential between using Newzbin2 and using a lawful service (such as a DVD rental service) will narrow still further. This is particularly true for less active users. The smaller the cost differential, the more likely it is that at least some users will be prepared to pay a little extra to obtain material from a legitimate service.

Fourthly, I agree with counsel for the Studios that the words of Kenneth Parker J in R (on the application of British Telecommunications plc) v Secretary of State for Business, Innovation and Skills [2011] EWHC 1021 (Admin) at [232] are equally applicable here:

“It is not disputed that technical means of avoiding detection are available, for those knowledgeable and skilful enough to employ them. However, the central difficulty of this argument is that it rests upon assumptions about human behaviour. Experts can seek to establish a profile of those who engage in P2P file sharing, and their various reasons for doing so, and may then attempt to predict how these users may be likely to respond if confronted with the kind of regime that the DEA enacts. In theory, some may cease or substantially curtail their unlawful activities, substituting or not, for example, lawful downloading of music; others may simply seek other means to continue their unlawful activities, using whatever technical means are open. The final outcome is uncertain because it is notoriously difficult accurately to predict human behaviour…”

As it happens, the Studios’ evidence is that when a similar kind of order was made by an Italian court blocking access to the Pirate Bay, use of the site appears to have been markedly reduced. It is fair to observe that, as BT’s evidence points out, diverted traffic may not have been picked up by the monitoring results relied on; but there is no hard evidence of a substantial quantity of diverted traffic.

Finally, I agree with counsel for the Studios that the order would be justified even if it only prevented access to Newzbin2 by a minority of users.

Even though UK courts have the jurisdiction to grant blocking injunctions under Section 97A of the Copyright Designs and Patents Act 1988 (CDPA), the UK government is still looking for more effective or additional means to achieve the objective of blocking foreign pirate sites and services.

Bill C-11, The Copyright Modernization Act, contains a new form of liability for enablement which is intended to give rightsholders the tools needed to shut down domestic facitlitators of online infringement. However, the Bill does not contain any new right similar to what exists throughout the EU to give courts the jurisdiction to protect our domestic market by making blocking orders against foreign enablers of online file sharing.

In the press conference announcing the Bill at the Ottawa office of software producer bitHeads Inc., Minister Paradis added “With the reintroduction of today’s legislation, Canadians will soon have a modern and responsive copyright law for the digital age that protects and helps create jobs, promotes innovation and attracts new investment to Canada”. In the House of Commons Minister Moore also said “we introduced a bill that is fair to everyone, both creators and consumers. What artists across the country need right now is copyright legislation that will make piracy illegal in Canada. That is what Bill C-11 will do.”

Bill C-11 is the fourth attempt to amend the Copyright Act since 2005 — to bring the Act into the digital age. The Bill will likely make good the promise made in the Conservative Party Platform on Copyright that, “A Stephen Harper-led majority Government will also reintroduce and pass the Copyright Modernization Act, a key pillar in our commitment to make Canada a leader in the global digital economy.” It will also likely deliver on the commitment made in the Throne Speech to swiftly pass “copyright legislation that balances the needs of creators and users.”

Bill C-11 contains the same proposed amendments as its predecessor, Bill C-32.  This was anticipated based on statements made by Minister Moore and others prior to its introduction. According to a press release announcing that Canada had signed the Anti-Counterfeiting Trade Agreement (ACTA), the “bill informed and guided Canada’s approach to the ACTA negotiations.”

Along with Bill C-11, the Government released Fact Sheets, an FAQ, and a Backgrounder.[1] These are all available on the Government`s website: www.balancedcopyright.gc.ca.

The FAQ describe certain aspects of the Bill including the following summary that says the Copyright Modernization Act will:

• implement the rights and protections of the World Intellectual Property Organization (WIPO) Internet treaties;
• give copyright owners the tools they need to combat piracy;
• clarify the roles and responsibilities of ISPs and search engines;
• promote creativity and new methods of teaching in the classroom by providing greatly expanded exceptions for education;
• encourage innovation in the private sector through exceptions for technical computer processes;
• provide legal protection for businesses that choose to use technological protection measures or “digital locks” to protect their work as part of their business models; and,
• give consumers the ability to, among other things, record their favourite TV shows for later viewing, transfer music from a CD to a digital device, and create a mash-up to post via social media.

I previous provided an overview of the Bill`s key provisions. See, Some thoughts on Bill-C-32: An Act to Modernize Canada’s copyright laws.

As I noted in My C-32 opening remarks to the Legislative Committee that studied Bill C-32, I support the government’s objectives. There are, however, areas where the Bill would have significant unintended consequences if passed without amendments consistent with those objectives. Many of these are technical. Perrin Beatty, President and CEO, Canadian Chamber of Commerce, referred to this in a press release when Bill C-11 was introduced on Sept. 29th:

While the Canadian Chamber supports the principles behind this copyright legislation, improvements still need to be made to the bill. As currently drafted, the bill still contains some possible unintended consequences that could prove problematic for business. We look forward to a rigorous review of the bill at committee stage that will make sure that it achieves the purposes for which it is designed.

In the Government background documents the Government stated that it will refer the Bill to a House of Commons committee and that the “work and testimony from the previous Parliament will be carefully considered and taken into account.” Minister Paradis also confirmed at the press conference that the Government “…will make any technical fixes necessary to achieve our objectives of taking meaningful action on copyright piracy, protecting right owners and promoting creativity, innovation and legitimate business models for the benefit of the consumers.” The Government`s objective remains to have the Bill passed by Christmas.

There has been considerable debate concerning some of proposed amendments. Some of the main issues that will be debated as the Bill winds its way through a House of Commons committee and, ultimately, into law are the following:

• Technological Protection Measures
• The Enablement Right
• The Non-Commercial User-Generated Content (UGC) Exception
• Statutory damages
• The Internet Service Provider and Search Engine Exceptions and Responsibilities
• The Fair Dealing for Education Exception
• The Copyright Exceptions to Encourage Innovation

Technological Protection Measures (aka digital locks or TPMs)

Bill C-11 will prohibit circumventing (hacking) of TPMs that control access to a work. It will also prohibit trafficking of tools or provision of services that can be used for this purpose. The Government background documents explained the TPM provisions and the rationale for protecting TPMs as follows:

Innovative companies, such as video game developers, will have the legal tools to protect the investments they have made in order to reinvest in future innovation and jobs.

Protecting digital locks gives copyright industries the certainty they need to roll out new products and services, such as online subscription services, software and video games, if they choose to use this technology. Not only will this promote investment and growth in Canada’s digital economy, it will also encourage the introduction of innovative online services that offer access to content. Such services are increasingly available in other countries.

The Bill recognizes that certain protections, such as restricted content on news websites or locked video games, are important tools for copyright owners to protect their digital works and are often an important part of online and digital business models.

Opponents of legal protection for TPMs — such as Michael Geist — have made inaccurate statements about the legal protection for TPMs. Michael Geist’s relentless misinformation campaign[2] against them makes it difficult and confusing for many Canadians to form informed views about the Bill’s TPM provisions. Michael Geist repeated some of the inaccurate or misleading statements in a blog post and in the media after the Bill was introduced. For example:

• He continues to suggest that “digital lock rules trump education rights”. However, since Bill C-11 does not prohibit circumventing copy control TPMs, it would be legal to hack a copy control TPM for an educational or any other purpose. Once hacked, a person would be able to make copies of the unprotected work under the new fair dealing for education exception, as long as the dealing is “fair”. However, a person could not bypass a technical control that protects a work against access the person is not entitled to in the first place.[3] The prohibition against hacking access control TPMs is not about “trumping education rights”. It is about ensuring that people who want to make copies of a work for an educational purpose obtain legal access to the work such as by purchasing or licensing a copy in order that the creator or other rights holder may be compensated.
• He also continues to argue that “digital lock rules extend far beyond those required for compliance with the WIPO Internet treaties”; that Canada can properly implement the WIPO Treaties by limiting the prohibition on circumvention to an infringing purpose; that the WIPO Treaties would permit hacking TPMs for the purpose of format shifting; that many of our trading partners have implemented the WIPO Treaties in these ways; and that “many of our trading partners have adopted more balanced digital lock rules”. He makes these arguments although they have been found to be completely inconsistent with the minimum requirements of the Treaties by the leading international expert , Dr. Mihaly Ficscor here, here, here, and here. Michael Geist’s proposals would, essentially, eviscerate the business and policy reasons for protecting TPMs.
• Further, he suggests that the U.S. DMCA’s TPM provisions “offer more flexibility than Canada”.  This statement is misleading as I have shown here, here, and here.

There is also considerable misunderstanding about the TPM provisions within the general public. For example,

• the National Post, Vancouver Sun, Winnipeg Free Press, Calgary Herald, and other newspapers just published an article stating that the TPM “provisions would make consumers liable for thousands of dollars in legal damages if they break the digital encryption on a purchased DVD or video game to make a backup copy for themselves.”
• the Montreal Gazette published an article stating that Bill C-11 contains a “blanket provision against breaking digital locks, even for purposes of personal use; The bill provides for $5,000 fines for even the smallest such violations. This provision was apparently included as a result of heavy pressure from U.S. authorities and in the interest of maintaining cross-border trade and exemption from protectionist measures that would prevent Canadian firms from bidding on U.S. government procurement contracts.”

These statements are just plain wrong. The Bill does not prohibit hacking copy control digital locks for any purpose and there are multiple exceptions that permit circumventing access control TPMs. Moreover, Section 41.1(3) of the Bill expressly precludes an award of statutory damages against an individual who circumvents a TPM for his or her own private purposes. Accordingly, it is flat out wrong to claim that an individual could be liable for “thousands of dollars in legal damages” for hacking a TPM for personal purposes. Further, even if statutory damages did apply, which they do not, the Bill would limit such damages to a range, the maximum of which would be $5,000 for the most egregious case.

In my blog post, An FAQ on TPMs, Copyright and Bill C-32, I tried to set the record straight on the following questions about the legal protection for TPMs to enable the public to make their own assessment of the TPM provisions in Bill C-32 based on correct information:

• Whether Bill C-32 properly implements the WIPO Treaties consistent with the practices of our trading partners
• Whether the Bill permits copying for fair dealing, educational, and other purposes
• Whether the circumvention exceptions in the Bill are flexible enough to deal with unforeseen or unintended consequences
• Whether Canada can properly implement the WIPO Treaties by limiting the prohibition on circumvention to an infringing purpose
• Whether other jurisdictions limit protection of TPMs to circumvention for an infringing purpose
• Whether circumvention of TPMs for the purposes of format shifting, time shifting, and making back-up copies for private purposes (private copying) ought to be permitted
• (Given that one of the legislative goals is to follow international standards) whether other jurisdictions permit exceptions for private copying to trump TPMs
• Whether an exception for private copying that permits circumvention of TPMs for such purpose would comply with the Berne Three Step Test
• Whether the WIPO Treaties which Canada has committed to ratify permit circumventing TPMs for private copying
• Whether Michael Geist`s two proposals for amending the TPM provisions in Bill C-32 (now Bill C-11) have international precedents.

Other posts such as the ones set out below also correct inaccurate statements made about legal protection for TPMs.

• Separating copyright fiction from facts about C-32’s TPM provisions
• Separating facts from hype about C-32
• Are the TPM provisions in C-32 more restrictive than those in the DMCA
• C-32 and the BlackBerry PlayBook: A reply to Michael Geist
• Dr. Ficsor TPMs and Flexibility (’The Ability of Bending Without Breaking’) – Why Should the TPM Provisions of Bill C-32 Protect Access Controls and Prohibit ‘Preparatory Acts”,
• Dr. Ficsor is right; Prof. Geist is wrong about the WIPO Internet Treaties
• Dr. Ficsor: An invitation to Canada to join the international community by ratifying the WIPO Internet Treaties
• Dr Ficsor Legends and reality about the 1996 WIPO Treaties in the light of certain comments on Bill C-32
• Dr Ficsor Only once more – and then Marry Christmas and Happy New Year to everybody, including Professor Geist and his devoted followers: the 1996 WIPO Diplomatic Conference, the WIPO Treaties and the balance of interests
• Reflections on the liberal roundtable on the digital economy
• FACEBOOK FAIR FOR COPYRIGHT OF CANADA: REPLIES TO PROFESSOR GEIST
• ‘TPMs’’: A Perfect Storm for Consumers: Replies to Professor Geist

The Enablement Right

Section 27(2.3) of Bill C-11 would create a new cause of action referred to in the Bill as “enablement”. The Government background documents describe this new right and the rationale for it as follows:

The Bill gives copyright owners the tools to pursue those who wilfully and knowingly enable copyright infringement online, such as operators of websites that facilitate illegal file-sharing.

It recognizes that the most effective way to stop online copyright infringement is to target those who enable and profit from the infringements of others. By allowing copyright owners to pursue these “enablers”, such as illegal peer-to-peer file sharing sites, this Bill supports the development of significant legitimate markets for downloading and streaming in Canada. This supplements existing criminal punishments for those who aid and abet infringement.

The Government background documents also state that the “proposed legislation will ensure that services that enable infringement will not benefit from the liability limitations afforded to ISPs and search engines.”

From the appearances and submissions to the Legislative Committee that studied C-32, there is a consensus supporting the enablement provision. Michael Geist, however, opposes giving rights holders tools to go after pirate sites and services like IsoHunt calling into question the need for an enablement amendment. I responded to his contradictory posts on the state of Canadian secondary liability law in a blog post, Are Canada’s copyright laws friendly or unfriendly towards wealth destroyers according to Prof. Geist? I concluded that:

It is clear that Prof. Geist’s objective in this recent spate of activity is to persuade policy makers and the public that the new proposed enablement cause of action is not needed because Canada’s copyright laws are already robust enough to deal with what Minister Clement calls “the wealth destroyers” like IsoHunt. However, for years Prof. Geist has consistently and repeatedly been writing and telling the public that Canada’s laws related to authorization might not be effective against pirate sites and services and that Canada does not have contributory liability laws that can be used against these sites and services…

The only conclusion that can be drawn from a review of his writings is that he has either changed his long standing opinion about the state of Canadian law – now believing it is effective enough to shut down the wealth destroyers like IsoHunt- or that he is inaccurately describing what he believes Canadian law to be to oppose the amendments in Bill C-32 that are intended to give rights holders the tools needed to close down wealth destroyers.

While the new enablement right could be a very useful tool in fighting online pirate sites and services, it has some technical drafting deficiencies that need to be fixed to ensure that the new cause of action can be used as intended. Perrin Beatty of the Canadian Chamber of Commerce noted this in the Q&A at the press conference in Ottawa where he stated that the concept of “designed primarily to enable infringement” needed to be clarified and that this clarification is an “essential technical amendment to ensure that the bill in fact achieves the purpose for which it was intended.”

I addressed the drafting problems in My C-32 opening remarks to the Legislative Committee and in an article co-written with Dan Glover titled C-32 enablement remedy targets secondary copyright infringement. There we noted three of the technical amendments that are needed to ensure the Government`s objectives of targeting the “wealth destroyers” are met.

• First, Parliament must recognize that pirate sites and services often are “not designed primarily to enable” acts of copyright infringement. The design is very often neutral, but the site or service is operated to induce, aid or abet infringing activities, or is primarily operated or used for infringing purposes.
• Second, Parliament must ensure that this provision clearly trumps all of the online service provider exceptions to avoid a circumstance in which enablers like wealth destroying pirate hosting sites can avoid liability for enablement.
• Third, to provide an adequate and effective remedy against enablement, Parliament should confirm that rightsholders may rely on the full scale of statutory damages against those who are liable for enablement, regardless of whether such persons were operating for commercial purposes or not.

The Non-Commercial User-Generated Content (UGC) Exception

Bill C-11 contains a new exception that would permit individuals to use existing content to create new ‘user generated content’. The Government background documents describe this amendment and its objective as follows:

The Bill permits the use of legitimately acquired material in user-generated content created for non-commercial purposes. This applies only to creations that do not affect the market for the original material. Examples could include making a home video of your friends and family dancing to a popular song and posting it online, or creating a “mash-up” of video clips.

The Government background documents also state that the changes proposed are in “conformity with Canada’s international obligations”.

In My C-32 opening remarks to the Legislative Committee studying Bill C-32 I pointed out some of the unintended consequences of the draft wording in the UGC amendment stating the following:

This is an exception that, to my knowledge, does not exist anywhere else in the world.

From a technical drafting perspective, the exception is so widely cast that it would most likely violate Canada’s WTO TRIPS obligations. TRIPs mandates that exceptions must be subject to what is known internationally as the 3 step test.

The exception, as drafted, would permit individuals to do almost anything that the author could do with his/her work including creating translations, sequels, or other derivative works and publish them on the internet.

They could also create a “collective work” or “compilation” of works such as “the best” of a TV series or artists’ works, or iPod playlist and post those on the internet.

They can also do a lot more.

The result is that the author loses significant control over the uses of his/her work.

But, over and above this, there could be significant economic consequences to the author. The intention is to permit uses which have no effect on the market for the work. However, the drafting permits aggregate effects on the market for the work that could be very substantial.

Also, the individual’s use of the new UGC work must be non-commercial. But a web site operator can charge for disseminating the UGC work. But, the author gets none of that. They would however in other countries which don’t have this exception and which have let the market solve the problem.

I also highlighted some of the potential problems with the draft language of the UGC, format shifting, time shifting, and back-up copying exceptions in a speech on Bill C-32’s fair dealing and other new copyright exceptions at Osgoode Hall Law School’s professional development program on understanding Bill C-32.

Statutory damages

Bill C-11 would cap statutory damages against individuals who infringe copyright for non-commercial purposes to a range of between $100 and $5,000 for all works involved in the proceeding. It also specifically exempts persons who are liable under the new enablement provision from any statutory damages. The Government background documents describe this amendment and its objective as follows:

This Bill ensures that Canadians will not face disproportionate penalties for minor infringements of copyright by distinguishing between commercial and non-commercial infringement.

The Bill ensures that Canadians are not subject to unreasonable penalties by significantly reducing statutory damages for infringement for non-commercial purposes by individuals, providing the courts with the flexibility to award between $100 and $5,000 in total damages. Using the same example of five illegally downloaded songs, the individual would only be liable for a penalty of between $100 and $5,000 under the proposed changes. The Bill will ensure that courts take proportionality into account in awarding damages.

It appears that the rationale for capping statutory damages against individuals is to preclude large judgements against them when they engage in unauthorized downloading of copyright content over the internet. The underlying concern seems to stem from a fear that a Canadian court would award large damages such as have been awarded in the United States.

The existing Canadian and U.S. regimes are very different, however. In the U.S., the statutory damages per work infringed range from $750 to $30,000 for non-wilful infringements. This range can be increased to $750 to $150,000 for wilful infringements. Canada’s statutory damages range is lower- from $500 to $20,000- and cannot be increased even if the infringement is wilful. However, they can be reduced to a range of between $200 to $500 where a person, such as an individual, had no reasonable grounds to believe he or she was infringing. A Canadian Court also has the discretion to lower the damages to zero where there is multiple copying onto a single medium and the award would be grossly out of proportion to the infringement. The Canadian statutory damages regime, unlike the regime in the U.S., therefore already reflects a proportionality principle. Moreover, there has never been a case in Canada where a copyright owner has been awarded anything close to the maximum statutory damages against an individual who downloaded copies of copyright content from file sharing networks.

This Bill would accomplish the Government’s objectives of ensuring that Canadians will not face “disproportionate penalties for minor infringements of copyright by distinguishing between commercial and non-commercial infringement.” However, it does so in a way that undermines the Government’s objectives of deterring wide scale infringements and providing effective remedies against those infringements that can cause significant economic harm. For example:

• the proposal would cap the recovery of statutory damages against infringements undertaken by organized groups like those who trade in Warez – pirated copyrighted works distributed without fees or royalties and without any commercial purpose – in violation of copyright law.[4] This would effectively cap statutory damages at $5,000 for persons who cause large scale commercial damage, but who do so for reasons other than profit. Some of the most notorious pirates and pirate sites are operated for reputational rather than profit motives.
• the proposal would preclude recovery of statutory damages against any pirate site or service that was liable under the new enablement cause of action. If the site was operated for a non-commercial e.g. reputational, purpose statutory damages could be not be recovered. However, statutory damages would still not be recoverable even against a for profit pirate site or service because of the special exception for statutory damages according to such sites.[5] Ironically, under Bill C-11 a person who is liable for enablement – a “wealth destroyer” to use the words of former Industry Minister Tony Clement- would be subject to no statutory damages while an individual who causes minimal damage and who infringes for a non-commercial purpose would be.
• the proposal would cap statutory damages at $5,000 even though a person might copy, distribute, and make available over the internet hundreds of software, video games, e-books, movies, music and other copyright content that are downloaded by thousands of other individuals as long as these acts are done for “non-commercial purposes”; for example, it would enable individuals to copy and store entire libraries of works and to distribute them to all of the person’s friends, including all of the person’s friends on social networks, high school, university or work colleagues, and over file sharing networks like IsoHunt  to millions of potential downloaders, and the maximum statutory damages would still be $5,000.

In amending the statutory damages regime, the Government should not inadvertently undermine the usefulness of statutory damages which are necessary to ensure there are effective remedies against infringers, discourage infringement, reduce the costs of litigation, and encourage parties to settle litigation. When the statutory damages regime was enacted by the Government in 1997 (the same year Canada signed the WIPO Treaties), it explained the rationale for them as follows:

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.

The above rationale for statutory damages is still valid.

The Internet Service Provider and Search Engine Exceptions and Responsibilities

Bill C-11 contains four new exceptions referred to as the network service, caching, hosting, and information location tool (aka search engine or ILT) exceptions. The object of these exceptions is explained in the Government background documents as follows:

The Bill ensures that ISPs and search engines will not be held liable for the copyright infringements of their subscribers, to the extent that they are acting as neutral intermediaries (e.g., when they provide Internet access, allow users to download material they have stored in online personal storage space they control, or make temporary cached copies for network efficiency).

The bill will clarify that Internet service providers (ISPs) and search engines are exempt from liability when they act strictly as intermediaries in communication, caching, and hosting activities. The proposed legislation will ensure that services that enable infringement will not benefit from the liability limitations afforded to ISPs and search engines.

These provisions also require technical amendments to ensure the Government`s objectives are met. On March 22, 2010, TELUS, Bell and Rogers appeared before the Legislative Committee studying Bill C-32. who appeared for TELUS acknowledged that some technical amendments are needed to the ISP and ILT exceptions stating the following:

TELUS would support amendments that would give rights holders more powerful tools to go after those who actively enable infringement, and also amendments that would prevent the bad guys from taking advantage of the legal safe harbours intended to protect only the good guys…

TELUS does have some recommendations, but they’re relatively minor. They’re focused on making the notice and notice system work better, more efficiently, and more fairly for all the stakeholders involved. As I have also indicated, we recognize the concerns on the part of some rights holders that the provisions designed to protect innocent intermediaries may be drafted too broadly. They may allow not-so-innocent intermediaries to slip in underneath them. That’s not a desirable result, so we would certainly be open to amendments designed to tighten those up.

The Bill would also create a notice and notice regime. The process and its rationale are described in the Government background documents as follows:

The Bill formalizes the voluntary “notice and notice” regime currently used by Canadian ISPs. Under this system, when an ISP receives a notice from a copyright holder that a subscriber might be infringing copyright, it forwards a notice to the subscriber. The identity of the subscriber may then be released with a court order. This uniquely Canadian approach has been effective at discouraging infringement and is consistent with Canadian values.

A notice and notice process is somewhat useful in dealing with infringing activity across P2P networks and other transitory network communications. It should become part of Canadian law. Notice and notice is not effective, however, in permanently stopping online file sharing by users unless the individuals receiving the notices believe that sanctions could be imposed unless they stop such activity. We have had a de facto notice and notice system in Canada for many years and there is no empirical evidence that it materially changes people’s behaviour to stop illicit file sharing and purchase creative products from legitimate services. 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. I dealt with this issue in my submission to the Copyright Consultation in 2009 and in other blog posts including here and here.

Given the Government`s statements about copyright reform, it does not appear that any graduated response system will be put in place under any amendments to Bill C-11. However, as noted above in the testimony of Craig McTaggart some technical amendments are required to make the notice and notice system work as intended.

The Fair Dealing for Education Exception

Bill C-11 proposes to add education to the current list of fair dealing purposes. The Government background documents describe the proposed amendment and its objective as follows:

The Bill enables the use of copyrighted materials for the purpose of education, provided the use is “fair” (i.e., it does not harm the market for a work).

It expands fair dealing to recognize education in a structured context as a legitimate purpose.

As drafted, the proposed wording of the amendment would not accomplish the Government’s objective. The proposed amendment is not clearly limited to only enabling the use of copyrighted materials for the purpose of education “in a structured context”. Unlike all of the current educational purpose exceptions, the proposed amendment is not expressly limited to specific institutional beneficiaries. As well, the term “education” conveys a meaning that appears to go beyond any structured context.

Limiting the exception to dealings that are “fair” will also not ensure that the dealings do “not harm the market for a work. “Fairness” does not provide any assurance against this harm to rights holders. The courts in Canada have developed a list of six non-exclusive factors to assist in determining whether a dealing is fair. Of these six, the effect of the dealing on the work is only one factor to be considered. The Supreme Court in the CCH case stated that while the effect of the dealing on the market of the copyright owner is an important factor, “it is neither the only factor nor the most important factor that a court must consider in deciding if the dealing is fair.” This means that a court may be able to conclude that a dealing is fair even if it harms the market for a work. In contrast, in the United States, the effect of the use upon the potential market for, or value of, the copyrighted work is “the most important, and indeed, the central fair use factor”. Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, (1985), Bouchat v. Baltimore Ravens LP, (4th Cir. Sept. 2, 2010)

Prof. Giuseppina D’Agostino, a professor of Intellectual Property at Osgoode Hall Law School, in her testimony before the Legislative Committee stated the following in relation to the proposed new fair dealing exception:

This new purpose is too broad and invites years of litigation to clarify it, which will lead to access-to-justice issues and will force the courts to resolve matters that are for the government to legislate with confidence in so doing…

On fair dealing, one thing I haven’t talked about is my own analysis of the six factors. When you line up Canada with respect to the U.K. and the U.S., you see that the court says there are more or less six factors, and there could be more. At the same time, in terms of the effect of the dealing on the works–meaning the actual market considerations, the market substitute–the Supreme Court of Canada says that it’s not the only factor, nor the most important.

We know that this is not the case in the U.K. and not the case in the U.S. What we have in Canada with CCH is a broad and liberal interpretation of both the actual purposes and the fairness factor. Left unchecked, the way it’s configured now means that when you compound education plus CCH, you will have something broad, unless we are able to itemize exactly what we mean.

Ysolde Gendreau a professor of law at the University of Montreal and the President of Association Littéraire et Artistique Internationale (ALAI Canada) in her testimony before the Legislative Committee stated the following:

I would like to submit a few examples of this found in Bill C-32, which, in ALAI’s view, undermines the three-step principle, because these exceptions are too broad, because they are based on unrealistic conditions that, once again, make them too broad. Here we’re talking about fair dealing for the purpose of education, the new section 29. We’re talking about non-commercial user-generated content, private copying under section 29.22…

In a law review article on the subject of the proposed fair dealing exception Professor Gendreau also expressed the opinion that the term “education” would not be read to mean “education in a structured context” and that the proposed exception would likely not meet any of the steps in the Berne Three Step Test.[6]

Michael Geist published a series of blog posts commenting on the scope of this new exception including one entitled “Clearing Up the Copyright Confusion: Fair Dealing and Bill C-32”. He concluded that this amendment would not affect the balance between creators of educational materials and the users of such materials or negatively impact the market for publications. My colleague Dan Glover wrote a series of blog posts responding to the incorrect assertions made by Michael Geist and others and demonstrating the need for amendments to the new exception in order to meet Government’s objectives. The posts are:

• A Response to Professor Michael Geist’s Clearing Up the Copyright Confusion
• En réponse à Pour démêler la confusion à l’égard du droit d’auteur, du Professeur Michael Geist
• Clearing Up the Copyright Confusion (Part II)

The Copyright Exceptions to Encourage Innovation

Bill C-11 would create news exceptions for developing interoperable computer programs, encryption research, network security testing, and technological processes. The rationale for these exceptions is explained in the Government background documents as follows:

The Copyright Modernization Act aims to eliminate some of the uncertainty facing innovative businesses. Provisions aimed at the software industry permit the reproduction of software and the hacking of digital locks in order to engage in reverse engineering, security testing and encryption research. Such provisions support, for example, companies that test software for security flaws and then develop and sell patches. Where copyright owners believe these tools have been misused, they will have recourse to deal with any infringement or inappropriate hacking of digital locks. The Bill also clarifies that companies do not face any copyright liability for technical copies that are essential but incidental to a product or service they offer.

These amendments also need technical fixes to ensure that the Government`s objectives are met. The need for this was addressed by John Manley, the President and CEO of the Canadian Council of Chief Executives, in his testimony before the Legislative Committee. After stating that he strongly endorsed “the overall thrust of this legislation” he said:

Having said that, I believe the committee may wish to consider certain technical changes to the bill so as to avoid unintended consequences. For example, important concerns have been raised with respect to the impact on Canada’s software industry of provisions dealing with encryption research, network security, reverse engineering and copying for interoperability purposes.

In addition, some of the language dealing with user-generated content and copying for private purposes may be too broad.

I also canvassed these amendments in a speech to the 14^th Annual IT.Can Conference titled Bill C-32’s impacts on the IT community.

Conclusion

After many failed attempts to modernize Canada’s copyright laws, it now appears there is a Bill before Parliament that will do this. The Copyright Modernization Act, however, still requires careful scrutiny to ensure that appropriate technical amendments are made so that the Government’s objectives are met and to avoid significant inadvertent consequences inconsistent with the Government’s objectives.

[2] Michael Geist accuses the book publishers of engaging in “a relentless misinformation campaign” against the fair dealing for education exception. His assertion is ironic since it is he that has engaged in this behaviour on copyright reform issues.

[3] See, James Gannon, TPMs: A comprehensive guide for Canadian copyright law

[4] See, Wikipedia, Warez http://en.wikipedia.org/wiki/Warez

[5] Section 38.1(6)(d)

[6] Ysolde Gendreau Canada and the Three Step test: A Step in Which Direction? 15 Intellectual Property L. Rev. 309 (2011). In the article she said:

The purpose of education is introduced within the context of an exception, fair dealing, that does not have a statutory list of criteria for its evaluation. The fair dealing exception also entails that it applies to all categories of works and to all rights, reproduction rights as well as performing rights. Moreover, its application is not limited to educational institutions because of the following a contrario argument: the wording of the specific educational exceptions shows that they are intended for educational institutions while that of the fair dealing for the purpose of education makes no such mention. Consequently, the notion of education extends the application of this exception beyond educational institutions. Government representatives say that the exception is to be a test ground for exceptions that may eventually give rise to specific exceptions. However, they still maintain that it refers to education in a structured context.

It is easy to doubt such a statement because educational institutions do represent a structured context. Courts are likely to say that, in the absence of a specific reference to such institutions, the reference to “education” is not limited to structured contexts. So this new exception would introduce a very broad notion of education in a statute that does not include criteria for the appreciation of fair use either.

After discussing why the proposed exception would have difficulty passing all three of the three steps she concluded by saying:

Generally speaking, since the three-step test has become the standard by which to judge exceptions, I would say there is a fairly strong case for stating that the proposed provision on fair dealing for the purpose of education is so broadly drafted that it goes against the three-step test of the Berne Convention and of the TRIPS Agreement.

“Counterfeit and pirated goods are an increasingly global problem that requires a globally coordinated solution,” said Minister Fast. “We all have an interest in combatting counterfeiting and piracy because these activities cost billions of dollars each year in revenue and trade losses, which translates into higher prices, lost income and lost jobs for people employed in a range of industries—from film and pharmaceuticals to electronics. Counterfeit goods also pose a real threat to the health and safety of people because the producers of goods such as drugs and auto parts evade the rigorous rules, standards and guidelines that are in place to protect consumers.”

ACTA will establish new international standards for enforcing intellectual property rights. It will cover three areas: improving international cooperation, establishing best practices for enforcement and providing a more effective legal framework to address the problem of counterfeiting and piracy. It will also give innovators, artists and entrepreneurs enhanced measures to ensure their creations and associated rights are protected. Alongside Canada, Australia, Japan, Morocco, New Zealand, the Republic of Korea, Singapore and the United States also signed the agreement, which was negotiated by 38 parties in total.

Following the signature of ACTA, the Government of Canada will develop and introduce the necessary legislation to implement the agreement. The government has already taken steps to enforce and defend intellectual property rights and help balance the needs of creators and users by reintroducing its Copyright Modernization Act (Bill C-11) in Parliament on September 29. The bill informed and guided Canada’s approach to the ACTA negotiations.

“The signing of this historic international agreement and our government’s reintroduction of copyright legislation demonstrates Canada’s commitment to combatting counterfeit and pirated goods, and protecting innovation- and knowledge-based prosperity, which are key to Canada’s future economic success,” said Minister Fast.

A backgrounder on ACTA can be found here. A summary of the agreement which I prepared when the text of ACTA was agreed to can be found here.

Signing ACTA is a step towards meeting the significant counterfeiting problems identified by the RCMP in A National Intellectual Property Crime Threat Assessment, 2005 to 2008. The porous nature of our borders and the need to upgrade our border controls to world standards to reduce counterfeiting and piracy in Canada has been noted by two parliamentary committees, three Canadian trade associations, and our major trading partners. Parliamentary Standing Committee on Public Safety and National Security, Parliamentary Standing Committee on Industry, Science and Technology, Ontario Chamber of commerce, Canadian Chamber of Commerce, U.S. Trade Representative,  U.S. Congressional Anti-Piracy Caucus, European Union, and Canadian Anti-Counterfeiting Network (CACN).

1. On Saturday, October 1, the Ministry of Foreign Affairs of Japan will hold the signing ceremony for the Anti-Counterfeiting Trade Agreement (ACTA) at Iikura Guest House, Ministry of Foreign Affairs.
2. The Agreement was inspired in significant part by Japan’s proposal at the G8 Gleneagles Summit in 2005 to create a new international framework against counterfeit and pirated products, in the context of the heightened awareness of the need for a higher degree of intellectual property protection. Its negotiation has been led by a strong initiative of Japan, the United States and other key partners.
3. The negotiation has been carried out among Australia, Canada, the European Union and its Member States, Japan, the Republic of Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland, and the United States, and reached a general agreement at the negotiation meeting held in Japan in October 2010, followed by the completion of technical and translation work in April 2011.
4. The signing ceremony will be attended by the representatives of all the participants in the ACTA negotiations, and those that have completed relevant domestic processes will sign the agreement. The agreement is open for signature until May 1, 2013.
5. On the preceding day, Friday, September 30, an international symposium entitled, “Global Intellectual Property Strategy and the Reconstruction from the Great East Japan Earthquake: Eliminating Counterfeit and Pirated Products through ACTA”, will be held in Sendai as a side event of the signing ceremony.