My C-32 opening remarks

The following were my opening remarks to the Parliamentary Committee studying Bill C-32 made earlier today.

I would like to thank the committee for inviting me to appear today to provide input on Bill C-32.

Before starting my remarks, I would like to give you some background about myself.  I am not telling you all of these things to boast, but because I understand some have expressed concern that I have one or two clients affected by this legislation and that is the only view shaping my perspective. This is not the case. I am lawyer who specializes in this area and have worked and taught about it for many years.

  • I am a partner with the law firm McCarthy Tétrault and am the co-chair of its tech law group.
  • I am an adjunct professor at Osgoode Hall Law School where I teach IP law.
  • I am the author of 5 books. These include the leading Canadian 5 volume treatise on Computer, Internet and E-Commerce Law.
  • I am a member of numerous IP committees, associations and organizations.
  • I have also been involved in copyright matters for creators, users, and intermediaries spanning decades of practice. I have appeared in three of the precedent setting Supreme court copyright cases including CCH which modernized fair dealing in Canada and Tariff 22 which examined the liability of ISPs where I appeared for the ISPs opposite to SOCAN.

I am here today in my personal capacity and not representing any clients.

The government in introducing this bill made it clear that it was to enable Canada to have copyright legislation that would benefit the Canadian marketplace, to create framework laws and to enable Canada to be leader in digital economy, in line with all of its major trading partners. I support these objectives.

There are, however, areas where the Bill will have unintended consequences that are inconsistent with those objectives. I am hopeful to be of assistance to members of this committee in understanding these issues, many of which are technical.

In the limited time I have, I am not able to address all of the issues associated with the bill. But, I will provide a few illustrative examples of where technical problems need to be fixed.

Enabling Infringement (Provision of Services), s.27(2.3)

The government has said that the bill will give copyright owners “stronger legal tools to go after online pirate sites that facilitate copyright infringement.

As Minister Clement has stated, the bill goes after the bad guys, the “wealth destroyers”.

To address the problem the Bill has a new section called “Enabling Infringement. s27(2.3)

A technical problemis that as drafted, the section is likely ineffective because it only applies to services that are “designed primarily to enable acts of infringement”. They are designed to facilitate the sharing of information and files.

But, most file sharing sites including peer-to peer BitTorrent sites and pirate hosting sites are not “designed primarily” to enable acts of infringement.

There are two other technical  problems:

The government’s intention is that ISPs should be “exempt from liability when they act strictly as intermediaries. But, C-32 is intended to “ensure that those who enable infringement will not benefit from the ISP exceptions”.

However, the drafting does not make this clear. Only 2 out of the 4 ISP exceptions expressly say this.

Based on the differences in wording, a court might well conclude that a pirate hosting site host gets an ISP exception even when it is liable for enablement. This could not be anyone’s intent.

Lastly, the bill exempts commercial enablers-the wealth destroyers- from being liable for statutory damages, even when they facilitate infringement for a commercial purpose.

Non-Commercial User-Generated Content Exception (s.29.21)

The bill also contains a new exception that would let individuals take existing content and use it to create “user generated content”.

The intent is to permit an individual to use content to make a home video or create “mash-ups” of video clips.

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.

There are other technical issues with the Bill that also need addressing.

I would like to thank the committee again for inviting me to appear. I look forward to answering any questions you may have about my remarks or the bill.

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

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