Last week there was lots of interesting debate in the House of Commons about Bill C-32 leading up to a vote at Second Reading to refer the Bill to a legislative committee for further study.
All of the political parties agreed that copyright reform is important. They concurred with the objectives behind the Bill including the goals of creating a legal climate in which creators can both safely invest in and get paid for their content and at the same time ensure access by users to their works. They recognized the need to modernize the Copyright Act to address the challenges of the 21st century.
For example, Heritage Minister James Moore stated the following:
Canada has not elected a majority Parliament since November 2000. It has been 10 years. As a result of the realities of minority Parliaments, often it is politically challenging for governments to be willing to step forward and to engage in the copyright issue. This legislation forces Parliament, regardless of political pressures, to make sure that Canada’s copyright regime stays on the cutting edge so that Canada can continue to create jobs, so that we maintain the reputation that we have around the world as being not only an innovator and a leader in new technology, but also one of those countries that protects the rights of creators to have their works protected by law.
MP Marc Garneau (Lib.) stated the following:
The digital economy is changing culture in this country. It is also changing our society and our economy. The information and communications technology sector employs some 600,000 Canadians and spends $6 billion a year on research and development. The digital economy is flourishing around the world. Last year, OECD countries invested nearly $3 trillion in hardware, software, communications and IT…
Unfortunately, when it comes to copyright, Canada has, for too long now, been way behind in terms of global best practices. Our outdated copyright legislation has been the subject of international criticism.
A 2005 OECD study found that Canada had the greatest per capita number of offenders engaging in illegal file-sharing. In May 2009, the United States put Canada on its blacklist of countries designated as being especially lax in protecting intellectual property, a list that includes Algeria, China, Russia, Pakistan, Indonesia and Venezuela.
Copyright and intellectual property protection have become a crucial component of trade talks with the European Union.
The time has come to ensure that our artists and creators receive fair compensation for their work and that, in this digital era, our entrepreneurs are compensated for their innovations. Canada must modernize its copyright legislation.
In short, the time has come for Canada to adopt a fair and balanced copyright law, one that takes the needs of both creators and consumers into account.
MP Dan McTeague (Lib.) expressed that same point as follows:
While I sit on the industry side of things, we can all appreciate the importance of Canadian culture, Canadian music, Canadian songwriters and the great impact they have made as a result of these kinds of arrangements, constructed in large part by Parliament in previous times. We know the Canadian recording industry is sound and strong. We are very proud of it and we have to do everything we can, in modern times, to ensure it is effectively and equitably safeguarded.
I believe there is the basis in the country for solid rewrite and review of copyright. It is long overdue. Members of Parliament may have differing opinions as to where and how we view effective copyright legislation, but I think we recognize that as the world changes, as technology evolves, so must the panoply of laws and the framework that allows us to change with changing times. That is the pragmatic approach, which the bill will require in order for it to be an effective response to the demands, needs and realities that society, that those in the industry as well as those artists expect.
While there was consensus at the high level, there was a great deal of discussion about the best ways to accomplish those goals. The following are some observations about some of the key issues in the debates.
Stopping the sites that enable piracy
Of all of the issues debated by the parties, there was no disagreement that our copyright law should enable artists to vigorously pursue the end of illegal file sharing sites and services. Beginning the debate was Industry Minister Tony Clement. He referred to “helping artists by cracking down on those who would destroy value”. Minister James Moore stated, “We need to make pirating and theft illegal in this country. We need to ensure that those who are creating in an effort to make a living out of what it is they love doing, which is music, software and video game publishing, are not being ripped off. That is article one.”
MP Bonnie Crombie (Lib.), in discussing the “wild west” of piracy facilitated by peer-to-peer sites, stressed that “Copyright laws are only as good as the enforcement that accompanies them.” MP Dan McTeague also made reference to “the absolute destruction and devastation” enabled by the “wealth inhibitors” such as the operators of BitTorrent sites like IsoHunt and wanted to ensure that exceptions intended for innocent intermediaries are tightened up so that these sites and services cannot rely on them. MP Marc Garneau also referred to ‘examining technical issues surrounding exemptions with regard to hosting, information location tools and network services.’
All of the parties were in agreement that C-32 should provide legal protection for technological measures (TPMs) as required by the 1996 WIPO Treaties. Minister James Moore recognized that 21st century business models depend on legal protection for TPMs. Individuals and businesses use locks to protect tangible property against theft and they rely on the law to protect them in those efforts. Artists and other creators of digital intellectual property should have the same rights to protection under the law. According to Minister James Moore:
Copyright holders told us that their 21st-century business model depends on strong technological protection measures. And we listened: Bill C-32 contains protection measures such as digital locks to protect against piracy and to allow creators to choose how they wish to protect their works.
We think the issue with digital locks is a central element. If a person is a creator and has created a product, a piece of software, and has decided to protect it in the way that person chooses to protect it to engage in the marketplace, we think that person has the right to protect what he or she has created, in the way he or she has chosen to protect it. If people want to hack around that or break a digital lock without that person’s consent, that person has the right to protect his or her own intellectual property. That is pretty basic. In terms of those who argue that digital locks should not be a part of this legislation, I just frankly disagree. I think they are wrong.
There are elements of the bill on which we can agree or disagree, certain defining elements of education and how that should be dealt with in fair dealing. There are certain things on which we can agree or disagree. But if a person creates some software and decides to put a digital protection measure on that software and to engage in the marketplace with 90-day trials in which things are locked down afterwards, and so on, if the person chooses to engage in that and chooses to protect his or her intellectual property, that person should have the right to protect his or her property in the way he or she chooses.
Obviously as part of this legislation, it should be illegal for one to hack somebody else’s property and to steal it and put it onto BitTorrent and spam it around the Internet and degrade people’s capacity to actually make a living on what they are doing.
… I do not want arts and culture creativity, the software industry, the video game industry, the creative community in this country, to become a hobby. I want business models to be able to work in this country, and that requires a strong and robust copyright regime.
Several Liberal MPs including MP Marc Garneau supported legal protection for TPMs but expressed opinions that Canadians who have legitimately purchased and paid for a CD, DVD or other products should have the ability to transfer their purchases onto other personal devices, such as an iPod, or make personal backup copies on their computers so long as they are not doing so for the purposes of sale, commercial distribution, or transfer to others.
Representatives from the NDP including MP Charlie Angus and from the Bloc including MP Carole Lavallée expressed similar and other concerns about TPMs. One concern raised by several members of the NDP was that legal protection for TPMs would not pass a constitutional challenge. This point, which has been made by several anti-copyright advocates is not supportable for at least four reasons.
First, Section 91.23 of the Constitution gives Parliament exclusive jurisdiction over ”Copyrights”. The Supreme Court of Canada has stated that copyright in Canada “is a creature of statute and the rights and remedies it [the statute] provides are exhaustive”. Copyright is concerned with balancing the public interest in the encouragement and dissemination of the works and “to prevent someone other than the creator from appropriating whatever benefits may be generated.” The proper balance is one that changes, and therefore needs to be re-evaluated from time to time, in response to technological evolution or to reflect international developments. Parliament has the right to determine the appropriate balance including how best to protect intellectual property against piracy.
Second, it seems obvious that legislation (1) whose object is to enable rights holders to prevent the unauthorized exercise of their exclusive rights, (2) which is enacted to implement copyright treaties such as the WIPO Treaties, and (3) which has been implemented around the world as part of copyright legislation, would be in pith and substance copyright.
Third, legislation protecting TPMs is in pith and substance copyright because, like the private copying levy in Part VIII of the Act, it would be “created for the purpose of supporting the creators and the cultural industries by striking a balance between the rights of creators and those of users.”
Fourth, the provisions in the Radiocommunication Act which prohibit decoding encrypted programming signals or network feeds or trafficking in devices that do so have been enforced by the Supreme Court of Canada. It is not plausible to assert that laws designed to prevent the decoding of devices that protect programming signals would be enforced, while devices that protect works’encryption and other content safeguards from being broken would not be protected.
Several NDP MPs also criticized the TPM provisions in C-32 for allegedly following the implementation model used in the DMCA or for going considerably further than what the WIPO Treaties require. However, as James Gannon has pointed out, Bill C-32 actually departs considerably from the legal protection for TPMs found in the U.S., including by having significant flexibility to enable the government to enact additional exceptions through regulation at any time. Moreover, to the extent that their criticisms of C-32 are based upon an interpretation of the WIPO Treaties that Canada can comply with the treaties without prohibitions against trafficking in circumvention tools, or by linking prohibitions against circumventing TPMs to infringing acts — they are in error. See, Separating facts from hype about C-32; Are the TPM provisions in C-32 more restrictive than those in the DMCA? Dr. Ficsor is right; Prof. Geist is wrong about the WIPO Internet Treaties;Legends and reality about the 1996 WIPO Treaties in the light of certain comments on Bill C-32.
The Liberals and the Bloc expressed concerns about the proposed amendments to statutory damages. Several Liberal speakers (including MPs Marc Garneau, Bonnie Crombie, and Dan McTeague) expressed the opinion that statutory damages must continue to be commensurate with the severity of the infringement. For example, MP Bonnie Crombie stated,“ A number of people to whom I have spoken, and who have come to meet with members of Parliament, have expressed concern about this section and believe that statutory damages must be commensurate to, equal to and proportional to the severity.” Bloc MP Carole Lavallée expressed concerns with absolute caps on statutory damages.
User generated content (UGC) exception
The Liberals and Bloc also suggested that the new exception for user generated content needs to be amended to ensure that the exception is not abused. MP Marc Garneau stated his party’s concerns as follows:
Another issue is mash-ups. Bill C-32 creates a new exemption for user-generated content. However, it is broadly written and can create a potential opening for abuse. We will seek amendments to tighten the language to ensure that the mashup exemption can only be used for its intended purposes and not unexpectedly create a loophole for further copyright infringement.
According to MP Dan McTeague:
In our view, this section is too broadly written. Under the rule, individuals can post an entire movie on YouTube as long as they add a small inserted clip at the beginning or the end. Then they can call the video a mashup. It is kind of the exemption given in this kind of circumstance.
MP Carole Lavallée made the following statement about the proposed UGC exception:
The exception known as the “YouTube exception” allows a mother to post her son’s first steps on YouTube along with music, used in good faith. That seems nice enough but it opens the door to a whole slew of music piracy. The scope of this clause needs to be reduced, and these so-called works created from other works should be banned. That is exactly what it means to respect artists’ rights.
Fair dealing for education
Both the Liberals and Bloc expressed the opinion that the proposed new exception that would allow education as a purpose for fair dealing was problematic. Their concerns were that the new exception itself was unfair as it would allow substantial unpaid for copying; the concept of “fairness” was indefinite and would result in costly litigation to sort out; “fairness” was no guarantee that significant revenues needed to fund educational publishing would not be lost; and the term “education” was not defined, was not limited to any structured context, and its meaning and scope would have to be settled by litigation.
MP Marc Garneau wanted to be sure that authors and creators are paid fairly for their work. He was also worried that the concept of “fairness” was too open-ended and required clarity:
Let us talk about the exemption for the education sector. The Liberal Party agrees that educators need flexibility in order to ensure that education is as enriching as possible. However, we must see to it that authors and creators are paid fairly for their work. The education sector is in the best position to convey the message that copyright is important, and we must ensure that Canadians understand that it is important for our creators to be compensated fairly for their work.
With regard to the exemption for the education sector, the Liberal Party will attempt to amend the bill by proposing to clarify what exactly constitutes “fair dealing”. Naturally, the secret of a good policy always resides in the right balance. By defining what is fair, we will ensure that the law gives educators the necessary flexibility while offering artists, authors, and creators a better guarantee that their works will be protected.
MP Dan McTeague expressed a similar concern. In addition, he asked “…why private, commercial education institutions should be permitted to disseminate works for education purposes without compensating copyright” owners.
As well, MP Scott Simms (Lib.) spoke on the proposed new fair dealing exception for education. His major – and serious — concern was that significant policy questions about what uses of educational materials could be exercised without making any payments to copyright owners would be decided by the courts as a result of litigation, rather than by Parliament:
Some artistry groups have said that an open-minded, fair dealing provision puts in the hands of the courts what should be determined by Parliament. That is something we have to consider. Again, it becomes incredibly litigious. Fair dealing has that possibility so we have to consider that. We have to draft legislation to make sure that does not happen, in my humble opinion. Artist groups are saying that the full impact of an open-ended fair dealing provision may be difficult to predict but the fact that there will be unintended consequences is wholly predictable.
MP Joseph Volpe (Lib.) shared the concern that the proposed new exception “introduces legal uncertainty, and whenever we introduce legal uncertainty, we are encouraging litigation.”
MP Bernard Bigras (BQ) had several concerns with the fair dealing exception for education. One concern was that it was unfair for educational institutions to have an exception that permits uncompensated copying. Under copyright law any person may copy any part of a work — unless the copying is substantial— without infringing copyright. However, when a particular use is elevated to a fair dealing purpose such as research, private study or education, copying of substantial portions of a work is permitted without authors being compensated. According, to MP Bigras, such substantial uncompensated copying by educational institutions of authors’ works would not be fair:
There are a lot of exceptions in this bill. One particularly problematic exception stands in opposition to what should, in theory, be a positive principle. It concerns educational institutions. Teachers will be able to use protected materials in their courses without obtaining permission to reproduce them. This applies to movies and plays, among other things. The problem is not that people will be disseminating these cultural and artistic works, but that schools, for example, will not be required to pay royalties if they reproduce works. That is the problem.
We have to ensure that everyone in our society has access to culture. Our young people need rapid access to our literary works and their authors, but we must not forget that these are artists whose livelihoods depend on this.
I was reading the latest statistics. In the education sector alone, there are 175 million copies of parts of copyrighted works in schools, CEGEPs and universities. The education sector alone provides $9 million per year to 23 Quebec authors and 1,000 Quebec publishers. People’s economic livelihood depends on publishing and culture. Of course we want our young people to have access to culture, but we must also recognize that our creators have the right to fair compensation.
MP Bernard Bigras was also concerned that even a “fair” dealing for education was no guarantee that authors would not be economically damaged by free uncompensated copying. (Unlike in the US, the effect on the market is not the most important factor in assessing whether a dealing is fair in Canada.) He pointed out that the “notion of fairness is not defined in the bill”. He also pointed out that the term “education” was undefined which “could therefore be defined quite broadly and have a broad scope”.
Private copying levies
The issue of extending the private copying levy to include digital audio recording equipment was raised repeatedly by the NDP and the Bloc including by NDP MP Charlie Angus and Bloc MP Carole Lavallée. However, both Ministers Clement and Moore spoke out against extending the levy. Minister Tony Clement stated that his party opposed an extended levy on DARs such as iPods as being “regressive, unfair and economically destructive.” Minister James Moore expressed the view that it “is an old solution for an old problem and it does not embrace the fact of new media.”
As the Bill moves into committee for further review, I am sure that we will hear much more about these issues — as the parties redouble their best efforts to craft legislation that will meet the needs of all Canadians.
For more information about the Copyright Modernization Act or Bill C-11 or copyright reform, see Change and the Copyright Modernization Act.
 Théberge v. Galerie d’Art du Petit Champlain Inc.,  2 S.C.R. 336.
 See Kirkbi AG v. Ritvik Holdings Inc., 2005 SCC 65.
 See Canadian Private Copying Collective v. Canadian Storage Media Alliance, 2004 FCA 424; also, Private Copying 1999-2000, Copying for Private Use.
 Bell ExpressVu Ltd. Partnership v. Rex, 2002 S.C.C. 42.