Reform of the Copyright Act

PIAC’s submission to the Standing Committee on Canadian Heritage on reform of the Copyright Act

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Rémi Bourgault
Clerk of the Committee
Standing Committee on Canadian Heritage
House of Commons
K1A 0A6
Dear Mr. Bourgault:
In response to the news release of October 6, 2003 indicating that the Standing Committee on Canadian Heritage has been authorized to extend its review of the Copyright Act to 2004 and to receive submissions from individuals and groups, the following is the submission of the Public Interest Advocacy Centre (PIAC), following upon its summary submission of September 15, 2003. PIAC is also a member of the Balanced Copyright Coalition and supports the positions and recommendations made in the Coalition’s submission dated September 15, 2003.
This submission focuses on the relationship between copyright and consumers in light of current federal government initiatives to amend Canada’s copyright legislation, the Copyright Act. PIAC examined the approximately 540 submissions made by individuals in response to the public consultation papers released by Canadian Heritage and Industry Canada in 2001. This analysis forms part of a report it is producing on the consumer’s view of copyright.
The Public Interest Advocacy Centre is a non-profit organisation that provides legal services and research to Canadian consumers and the organizations that represent them. Our work primarily concerns important public services including telecommunications, broadcasting, energy, financial services and public transportation. We represent coalitions of low income or vulnerable consumers before regulatory tribunals such as the Ontario Energy Board and the CRTC. Through the contributions program for non-profit consumer and voluntary organizations of the Office of Consumer Affairs, Industry Canada, we provide research on consumer issues affecting the marketplace, including current research on copyright and consumers.
In our view, assessing copyright reform from the consumer’s perspective is critical because the public’s interest in having access to copyrighted works forms one half of the ‘bargain’ between copyright holders and users.
The consumer’s perspective is also relevant because copyright in the digital era has become an issue that has a direct impact upon consumers. In recent days we have seen copyright holders in the United States file lawsuits against individual personal computer users for copyright infringement as a result of sharing music files on the Internet. Consumers, therefore, have a critical interest in and an important stake in the copyright reforms being considered by the federal government.

The digital age has altered copyright

Copyright law has traditionally focused more on uses by commercial or institutional actors that would affect copyright rather than the way in which individual consumers have used works protected by copyright. The traditional use of copyrighted works by individuals has been ‘consumptive’. Such uses include purchasing a published book or borrowing it from a library, renting a DVD or videocassette of a movie, buying a music compact disc or photocopying an article from a publication for private use or study.
A key change in the relationship between consumers and copyright is the result of the digital era and the ability of consumers to affect the traditional power of copyright over production or reproduction of an original work. Consumers have access to personal computers which give them the ability to access, store and use information in a number of different ways. At the same time, it is the intrinsic nature of the operation of computers that has the potential to alter the traditional relationship in copyright between creators and users.
A computer works by reproducing content in its random access memory. Therefore, any appearance of a work in a computer, could, in theory, be subject to copyright law. As analysts of copyright in the digital era have suggested, using copyright to regulate uses of works by computers marks a fundamental shift in copyright from regulation of multiplication and distribution of works, to regulation of the consumption of a work.
The digital era has also created the opportunity for copyright owners to protect copyrighted works in ways that may prevent consumers from legal access to those works, through technical measures, digital rights management and forms of contract law. All of these forms of protection, many of which are very recent developments, place significant power in the hands of content holders. They allow copyright holders to control uses of works or even access to works. With respect to Digital Rights Management systems (DRMs), they set up terms of use through licensing. These powers place the potential control over copyright in the hands of copyright holders well beyond what currently exists in copyright legislation.

The copyright balance is tilting away from the public interest

Copyright law in Canada as it has developed, has emphasized the need to find an appropriate balance between creators’ rights to benefit from their works and thus be encouraged to create, and the public’s right to have access to those works to encourage the general development of the arts and science. This balancing of rights is described in this often quoted statement from the case of Sayre v. Moore¹:

We must take care to guard against two extremes equally prejudicial: the one that men of ability, who have employed their time for the service of the community may not be deprived of their just merits and reward for their ingenuity and labour; the other that the world may not be deprived of improvements nor the progress of the arts be retarded.²

The Supreme Court recently affirmed the importance of this balancing of rights in Canada’s copyright legislation:

The Copyright Act is usually presented as a balance between promoting the public interest in the encouragement and dissemination of works of the arts and intellect and obtaining a just reward for the creator (or, more accurately, to prevent someone other than the creator from appropriating whatever benefits may be generated). ³

Our concern about the reforms that the government is considering and the current protection measures that are employed by copyright holders is that this careful but importance balance is being tipped in favour of copyright owners.

Fair dealing and the U.S. experience

The comparable provision in the U.S. copyright legislation to the Canadian concept of “fair dealing” is the “fair use” provision. The “fair use” and “fair dealing” provisions have become increasingly important and controversial in the digital era. Despite the apparently more expansive definition of “fair use” in the U.S. legislation, the boundaries of what activities may be considered legal “fair use” have been clearly tested in the digital era by recent U.S. copyright legislation and resulting litigation. This debate revolves around copyright owners’ efforts to protect copyrighted materials in the digital age and whether these protections impinge on or even eliminate “fair use”.
In the U.S. this issue has been raised most recently in relation to the Digital Millennium Copyright Act (DMCA), U.S. legislation enacted to enhance copyright protection in the digital arena. Recent litigation under the DMCA has considered both the extent to which the DMCA eliminates fair use of copyrighted materials and the extent to which protection for the electronic measures put in place by copyright owners, provided in the Act, may be unconstitutional under the free speech clause or First Amendment of the U.S. Constitution.
The U.S. case law is significant for what it says about the relationship between technological measures and legal uses under copyright legislation such as fair use. It shows that technological protection measures can eliminate legal uses under copyright legislation such as fair use. It also shows how legal protections such as fair use may be trumped when technological measures are backed up by legal protections such as those found in the DMCA. In our view, it provides an important warning for the Canadian government as it considers enacting any form of anti-circumvention legislation for the protection of technological measures.
The U.S. copyright reform that produced the Digital Millennium Copyright Act has generated an unprecedented public interest in copyright and a significant public concern about the survivability of legal concepts such as ‘fair use’. The debate it has generated goes to the essence of the question of maintaining the balance between protection and access in copyright.
These issues raise important questions for Canada as it considers copyright legislative changes. Should Canada follow the example of the DMCA? How should it fulfill its treaty obligations concerning digital copyright? Where should the balance between protection and access be drawn? Evaluating these questions requires knowing what constitutes the public interest in Canada’s copyright reform. The response of individual Canadians to the copyright consultation process gives some indication of how the larger public, as a key stakeholder in the copyright debate views these issues.

What consumers have said about copyright reform

Approximately 540 individual submissions of the 700 total submissions (by individuals and organizations) indicated opposition to amendments that would augment the rights of copyright holders over the public or the consumer in the digital environment, whether through a “making available right”, legal protection for technical measures, or legal protection for rights management information.
Many of the submissions also stated their opposition to amendments to the Copyright Act that would bring Canada closer to a DMCA legislative model. Only a handful of responses by individuals indicated support for strengthening copyright protections in the digital age.
The respondents generally expressed concern about technological protection measures eliminating legal uses under copyright such as fair use, as exemplified by this submission:

I believe that in a country such as Canada, no law should favour a given party, but be designed to provide equal, mutually beneficial rights to both the consumer, and the copyright holder. Currently, under US law, the DMCA (which you refer to on the site) has been shown to reduce Fair Use and First Sale rights, which is a staple of US copyright law. Similarly, they will prevent Canadian citizens from exerting any control over the software and media they purchase. I do not believe that these laws will protect corporations and small businesses from so-called “pirates” but will instead increase the demands on the average citizen who simply wants to make use of the product he legally purchased.⁴

They expressed concern about legal protections of technological protection measures upsetting the balance between copyright holders and the public in favour of copyright holders. They also suggested that legal protection of rights management information would produce the same effect in terms of deterring legal uses as technological protection measures.
Strong concerns were expressed about these protections diminishing or eliminating scientific enquiry and free speech values. Some expressed the concern that consumers were left out of the copyright debate:

My suggestion to the Canadian Government is to give more time and exposure to this issue. These changes to the Copyright Act will have a huge impact on consumers. None of the people I talk to are aware that their freedoms and consumer rights are about to undergo a significant change. Many of these changes cater to the needs of digital content publishers, at the expense of consumer interest. I believe that Canada should give digital content some time to mature before attempting to regulate it. When that time comes, it should be through an open forum, equally represented by the copyright stakeholders and consumer advocates. I believe that the voice of the consumer is clearly understated in today’s discussions.⁵

Finally, some submissions implied that the digital age requires a rethinking of the traditional approach to copyright:

Copyright is a careful balance. The fact that works are easier to copy (both legally and illegally) in the online world does not mean that we should automatically assume everyone an infringer. Rights holders should be looking less towards how to prevent users from making copies that may or may not be infringing, and more towards how to adjust their models in order to thrive in a world where physical distribution is expensive, digital distribution is cheap, and information flows freely between all points on the globe.⁶

The vigorousness of individual opposition to enhanced protections for copyright holders in the digital age evidenced by the number of submissions made to the federal government in 2001, suggests the extent to which copyright has moved from its former position at the periphery of public knowledge or concern. It also suggests that the concerns of individual consumers and the public interest side of the copyright balance cannot be ignored and must be carefully considered as the federal government considers copyright reform.

Copyright is a consumer issue

As suggested throughout this submission, the digital age has moved copyright from its former position as the purview of copyright lawyers and the copyright owners, to an issue of wider public interest. The reason for this has to do with the changing importance of the content that forms the subject matter of copyright and the changing relationship of the public to that content.
One of the critical factors underlying the resurgence in importance of copyright is the increased importance of information as an economic driver. The shift in the developed world from industrial-based economies to knowledge-driven economies is a well-documented phenomenon. The concept of a knowledge-based economy is rooted in the increasing importance of human capital as a source of economic growth. Some of the factors influencing this change include:globalization, the effect of technological change on production, and the falling cost and rising efficiency in the transmission, retrieval and analysis of information. These forces are creating a global economy in which knowledge is becoming a critical resource.
This central importance of information has a direct relationship with how that information is made available to the public at large. It means that societies must ensure the widest possible access to and availability of works that may be subject to copyright, for creative, academic and educational purposes.
This increased economic value of information or intellectual property also exacerbates the existing tension between protection and access underlying copyright. As information becomes a more valuable economic resource, the desire on the part of the content industries (or the representatives of the creators of content) to reap the benefits from ownership and control of this information intensifies.
The Internet is directly involved in the economic ascendancy of information. It is the location where much information will be concentrated and disseminated. The Internet is becoming an important focal point of economic and social organization as evidenced by the rise of electronic commerce and the Internet as a source for communication, information and cultural content. The government acknowledged this by stating in its consultation document:

The evolution of a network-based economy is desirable and inevitable as a social, cultural and economic engine.

Important measures of the success of this economy will be the amount of creative content available on-line and the use made of it.⁷

Thus, it is critical that copyright reform addresses digital copyright issues in a way that will ensure the public’s access to and involvement in the network-based economy.
Copyright has also become an issue for consumers because consumers are now directly affected by the legal uncertainties created by the digital age. The digital era has fundamentally altered the relationship between consumers or individual users of ‘content’ and the producers or ‘owners’ of that content:

But as existing works are digitized, with or without authorization, or new works are made available solely in digital format, copyright becomes powerless to cope with the manipulation and movement of intangible electronic streams. Detection and enforcement become difficult, sometimes impossible, and rights that appear on the books are ignored in practice. Access to music, art, literature, and other material in digital form has given users the power to modify these works or data at will, replicate them almost infinitely, and transmit them anywhere in the world to others, who in turn have the same capabilities; and power, once given, will inevitably be used. In this world, every user is a potential re/author and re/distributor of material made available electronically to her.⁸

This change has also placed users/consumers of digital content at legal risk, in a way that could not have been predicted under the initial copyright ‘bargain’ between copyright holders and users.
Recently, copyright holders in the United States filed lawsuits against individual personal computer users for copyright infringement as a result of sharing music files on the Internet.⁹This legal action was specifically allowed by U.S. digital copyright legislation, which does not contain a private copying exemption for musical sound recordings found in the Canadian Copyright Act and which grants broad powers to charge users. However, the uncertainties of the application of existing Canadian law to new musical formats such as file swapping, has led the Canadian recording industry to suggest that similar acts in Canada are also illegal:

None of the suits involve Canadians and the Canadian Recording Industry Association, CRIA, says it has no plans to launch similar legal action here…”Obviously we are watching the process in the U.S. with great interest and we will sort of take a look and see the results it may have and we will make some decisions down the line,” said Brian Robertson, president of the recording association. For now the CRIA will continue sending warning messages to people who download music. “It’s a fairly consumer-friendly message,” Mr. Robertson said. “It advises them of the damage that the process does to the music that they enjoy and to the artists and to the creative process. And, that it is illegal.”¹⁰

Consumers clearly have a critical interest in and an important economic and legal stake in the copyright reforms being considered by the federal government. As a result, the reforms must take into account what the public has already told the government are their concerns and priorities for copyright reform, which include the importance of maintaining the copyright balance in the digital age. The government must also commence the reform process with a clear understanding of the actual state of the balance between protection and access in copyright.
Recommendations for reform of Copyright Act
Our recommendations are guided by a general view that copyright holders already enjoy a significant level of protection in the digital age. Related to this is our concern that contract law is already replacing copyright law in the digital environment.
It is also guided by the view that Canadian copyright reform takes place in an international trade context. There is a need for Canada to balance the increasing economic value of intellectual property in a globalized world with recognition of the importance of copyright as a tool of cultural protection and cultural growth.
It has been argued that copyright holders have three levels of protection available to them: technology, existing copyright law and contract law. The current use of technological protection measures and digital rights management systems gives the rights holder the ability to restrict access and/or control the uses made of a work.¹¹
Existing copyright law provides a further level of protection. As long as the work underlying a digital work meets the requirements for copyright (originality, fixation and connection to Canada or state with which Canada has national treatment) it is protected under the Act.¹²
The third level of protection is contract law, which, when combined with technological protections, raises significant concerns about the viability of existing copyright law. Contract law is a form of copyright protection because it allows copyright holders to set terms of use through licences. The concern arises when licences are incorporated into digital rights management systems. Critics point out that the terms of these contracts, such as the use that may be made of a work, are usually not freely negotiated between the parties:

The use of DRMs can facilitate the automatic ‘negotiation’ of contracts between content providers and users. In this environment, the bargaining power between the content providers and users may well be unequal. The combined use of TPMs and contracts in this manner could therefore lead to unconscionable transactions.¹³

The other concern raised by critics is that these contracts may also override copyright law and important legal uses, such as ‘fair use’:

Where technological constraints substitute for legal constraints, control over the design of information rights is shifted into the hands of private parties, who may or may not honor the public policies that animate public access doctrines such as fair use. Rightsholders can effectively write their own intellectual property statute in computer code.¹⁴

To grant legal protection for technological measures, as provided by the DMCA, would arguably create a fourth level of protection for copyright holders. It is highly questionable whether such level of protection is needed, given the existing three levels of protection and the more significant consequence of effectively trumping existing copyright legislation and legal rights such as ‘fair dealing’ that it preserves.
The following recommendations address those issues identified by the federal government as part of its short-term reform agenda.
The Public Interest is not served by the DMCA Approach to Copyright Reform
The public has clearly indicated their concern about any amendments to the Act that would bring Canada closer to the U.S. approach copyright legislation in the digital era. Approximately 540 individual submissions of the 700 total submissions (by individuals and organizations) to the Federal Government’s consultation process in 2001, indicated opposition to amendments that would augment the rights of copyright holders over the public or the consumer in the digital environment, whether through a “making available right”, legal protection for technical measures, or legal protection for rights management information. Many of the submissions also stated their opposition to amendments to the Copyright Act that would bring Canada closer to a DMCA legislative model.

Legal Protection for Technological Measures Threaten Legal Uses

The digital era has also created the opportunity for copyright owners to electronically protect copyright works in ways that may prevent consumers from legal access to those copyrighted works. The U.S. experience under the DMCA suggests that the “fair use” protections of copyright have been severely tested and jeopardized by the legal protection of technological measures outlined in the DMCA.
There is evidence both that legitimate uses have been curtailed by the enactment of the DMCA and of strong public concern about the negative impact of the legislation. The evidence of real constraints upon the scientific community and the vigour of legislative response following enactment of the DMCA provide strong evidence of concern about the ineffectiveness and inability of such legislation to protect legal uses of copyrighted material. It also provides an important warning for the Canadian government as it considers enacting any form of anti-circumvention legislation for the protection of technological measures or rights management information.
We would urge the government not to proceed with any new legislative amendments to protect technological measures at this time. As the studies recently commissioned by the Department of Canadian Heritage concluded, there isn’t enough empirical evidence about the current use and circumvention of technological protection measures to require a legislative response. We would add that there is also considerable evidence from the American experience to suggest that danger to the public interest and to the legal uses under copyright are the direct result of putting such legal protections in place.

The “Fair Dealing” Provision of the Copyright Act Must be Expanded

Preserving and enhancing existing permitted uses is critical to maintaining and restoring the balance in copyright. The Act should be amended to provide for a general “fair use” right. This would be accomplished by setting out evaluation parameters, similar to the United States “fair use” provision found in the Copyright clause of the U.S. Code, rather than attempting to identify specific uses that should be added to a defined list of permitted uses in Section 29 and 29.1. This would enable a determination by applying consistent principles regardless of the underlying medium at issue or the ongoing technological changes in order to avoid encountering the problem of applicability of “fair dealing” principles to the next generation of transmission technologies.
The Term of Protection for Unpublished Works should not be extended
We urge the government to rescind the provision contained in Bill C-36 that would extend the term of protection for unpublished works.
The Copyright Act contains a provision that sets out the term of copyright for posthumous unpublished works. This provision, based on 1997 amendments to the Act, limits the protection for posthumous unpublished works to 50 years after the death of the author. Where the death of the author occurred more than 50 years prior to the coming into force of this amendment, the Act adds five years to that term of protection. A bill recently introduced by the federal government would extend that term from a period of 14 to 34 years.
The public interest is clearly not served by such an extension. In an information age, there is a need to ensure that works enter the public domain. There is also a significant cultural priority that Canadian works can be easily accessed for research and scholarship. Canadian historians have expressed the concern that extending protection to posthumous works will place significant obstacles upon their work.
Thank you for the opportunity to provide to this committee a fuller elaboration of PIAC’s views regarding reform of the Copyright Act.
Sincerely,
Sue Lott Counsel Public Interest Advocacy Centre 1 Nicholas St., Suite 1204 Ottawa, Ontario K1N 7B7 Tel: (613) 562-4002×23 Fax: (613) 562-0007
1 Sayre v. Moore (1785), 1 East. 36ln, 102 E.R. 139n.
2 Ibid. at 140.
3 Théberge v. Galerie d’Art du Petit Champlain inc., 2002 SCC 34 at para. 30, online: Judgements of the SupremeCourt of Canada
4 Submission regarding the consultation papers by Paul Aubin, online at:
5 Ibid. by Itrat Khan.
6 Ibid. by Ian Goldberg.
7 Industry Canada and Canadian Heritage, Consultation Paper on Digital Copyright Issues at 35.
8 D.Vaver, Copyright Law (Toronto: Irwin Law Inc., 2000) at 295.
9 B. McKenna & P. Waldie, “Lawsuits hit Net music downloaders”, The Globe and Mail (9 September 2003), P.Waldie, “Music industry hails $2,000 win over child” (10 September 2003) A1, A. Harmon “261 Lawsuits Filed onInternet Music Sharing” (9 September 2003).
10 B. McKenna & P. Waldie, Ibid.
11 I. Kerr, A. Maurushat, & C. Tacit, Technical Protection Measures: Part II at 19.
12 Ibid. at 19-20.13 Ibid. at 20.14 D.L. Burk and J.L. Cohen “Fair Use Infrastructure for Rights Management Systems,” 15 Harv. J.L. & Tech. 41 at 51.