Copyright reform stakeholders greet reforms with cautious optimism

Ottawa’s proposals for reforming the Copyright Act to bring it in line with digital realities are being viewed with cautious optimism by Canadian NEW MEDIA sources. The government’s proposals, released March 24, walk a fine line between the heavy-handed U.S.-style Digital Millenium Copyright Act (DMCA) legislation many had feared, and a more laissez faire approach that some industry leaders say has led to a Wild West copyright environment in Canada. It will likely be several months before legislation is put before the House of Commons and its Standing Committee on Canadian Heritage, and some observers worry the carefully crafted March 24 compromise may yet be derailed by both domestic and international forces. The March 24 proposals for reform were issued as a government response to the standing committee’s recommendations for changing the law that were published last May as an interim report (CNM, May 14/04). The committee’s points were intended to give the government direction on how it should ratify two World Intellectual Property Organization (WIPO) treaties that would provide strong protection for copyright holders in a digital environment. Several of the recommendations were contested hotly by public rights groups and academics, as well as by high-powered Internet service providers, which worried that the recommendations would tilt the balance of copyright protection in favour of rightsholders, such as in the music industry. Many of those fears were allayed by this month’s government response, which in many instances watered down the committee’s suggestions. ISPs were relieved that the government proposes codifying the current voluntary system used to police content stored on their servers, rather than adopt the committee’s recommendation of a U.S.-style "notice-and-takedown" regime. Under the American system, ISPs are liable for copyright infringing materials found online if they don’t remove material from their servers upon notice from the copyright holder. If Ottawa’s current proposal holds through the legislative process, Canada will instead adopt a regulated "notice-and-notice" system to deal with potentially infringing material. Under that system, ISPs won’t be held liable for infringement if they pass along notice to their subscriber that a copyright holder has objected to something posted online. Jay Kerr-Wilson, a VP at the Canadian Cable Telecommunications Association (CCTA), tells CNM that the government’s latest proposal in favour of notice-and-notice shows bureaucrats at both Industry Canada and Canadian Heritage have been listening to stakeholder concerns through a lengthy consultation process. He notes: "Obviously the government heard the ISP industry’s concerns about being unable to deal with excessive liability issues and needing to have a measured approach to enforcement, and the results are that they’ve proposed to exempt ISPs from liability for intermediary activities consistent with the Supreme Court (Tariff 22) decision (CNM, July 13/04), and they adopted the notice-and-notice model that the industry has been working on on a voluntary basis – but backed up with obviously statutory requirements. It’s not going to be a voluntary scheme under the government’s proposal. So, we’re playing a role in dealing with copyright infringement using the Internet, but it recognizes the concerns we had about the problems with notice-and-takedown and those sort of options." Details to come ISPs and others likely won’t know the exact shape of that system until the relevant legislation is introduced into the House this spring, and it’s likely the government will use regulations, not the Copyright Act, to determine how it will work. ISPs have role to play Kerr-Wilson’s comments explicitly echo the government’s statement of proposed changes, which for the first time set out Ottawa’s official position that ISPs must be part of the digital piracy problem identified by copyright holders. The government’s statement reads: "The bill will propose that Internet service providers (ISPs) be exempt from copyright liability in relation to their activities solely as intermediaries. This would clarify the liability of ISPs in a manner that helps to ensure that they can continue to provide Canadians with high-quality Internet services at low cost. At the same time, the bill will propose that ISPs be required to play a role in curbing the misuse of their facilities for copyright infringement." That’s music to some copyright holders’ ears. Graham Henderson, president of the Canadian Recording Industry Association (CRIA), tells CNM he’s pleased with the section on ISP liability as a recognition of the recording industry’s longstanding position that service providers bear some responsibility for solving the file-sharing issue. "I looked at that and I thought, well, hallelujah. Thank God. There’s a quid pro quo for being excused from any form of liability. I thought that was fabulous." Music industry gains Overall, Henderson says, he’s very pleased with the government’s proposals. The music industry he represents, in fact, won several crucial victories, even if none were exactly what CRIA has been calling for. A measure was promised by Ottawa, for instance, to introduce legislation making it illegal to crack technological protection measures (TPMs) used to guard copyright material. That protection, as currently envisioned by the government, however, likely won’t extend to non-infringing uses, and is thus weaker than language used in the DMCA. Henderson says he’s not concerned about the details of the proposals for the moment, however. "I felt that the TPM language was really good, and I know there are going to be those who say, you know, that the devil is in the details on this. But this is one of those few cases where I think the opposite may be true. It may be that God is in the details. I’m looking forward to legislation that is going to be balanced and fair. Look, if it needs tweaking then everybody is going to have a fair opportunity to tweak…For me, today’s a day really for celebration and thanks to the government, to the Opposition, to ministers and to officials at Heritage and Industry for getting us this far." Another key victory for the music industry is a proposed new right of making available for performers, and a clarification of the same right as part of authors’ existing communications rights. The right, which would theoretically give performers a new veto over the unauthorized making available of their work – including on file-sharing networks – could be controversial. In 2001, Kerr-Wilson noted to CNM that the layering of new rights upon existing ones could be problematic for ISPs as they launched online music stores (CNM, Nov. 2/01). Times have changed, though, and now he says that with appropriate industry cooperation, there should be fewer problems than originally anticipated. "When we had proposed before that some thought had to be given about how to grant the right of making available to performers and sound recording makers, it was anticipated there might be some difficulty in having all the parties negotiate licences. Clearly with the CSI online music services proceeding before the Copyright Board (for mechanical reproduction rights, CNM, May 14/04), there’s been some difficulty with people working out their issues. Whether the government chooses to recognize a full exclusive making available right for performers or not, I think the industry has to get together and figure out a way to make sort of comprehensive licensing solutions that make sense for creators and users. So, at this point, because we’ve gone so far down the road of online music service sales, I don’t think that the right of making available right for performers is going to be much of an impediment. I think that’s just one more issue that will have to be dealt with." CRIA’s Henderson agrees, saying artists generally bundle their performing rights into their recording contracts, except for some artists, such as Loreena McKennit, who own their own masters. Further, he says the mechanical reproduction brouhaha at the board is a temporary problem. "I think it is a transient problem while tariffs get set, while brothers and sisters figure out which piece of the pie they’re going to get. It’s going to get sorted out. Licensing is going to become increasingly easy and in a year and a half from now we’re going to look back and think: ‘why were we worried about this? Because, actually, it’s easier than it’s ever been.’" Other changes proposed by government include the expected postponement of a blanket licensing scheme that had been recommended by the committee (CNM, March 22/05). Instead, Ottawa has stated that classroom material can be distributed electronically, and that material that is covered by a school’s blanket licence for printed material could also be delivered via digital networks. However, the government stops short of providing an explicit exception in the act for publicly available material in the classroom, as called for by university, college and provincial education authorities. The government’s statement on the subject reads: "This is a complex and contentious issue. The Government believes that it requires further public input and consideration, including with respect to the implications of recent copyright decisions by the courts (notably the recent Supreme Court of Canada decision regarding fair dealing, CCH v. Law Society of Upper Canada ). Accordingly, the bill will not address this issue. Instead, the Government will release a consultation paper on the issue as soon as possible after introducing the bill." Made-in-Canada approach CNM sources generally agree that the compromises Ottawa has proposed are welcome, but that there is reason for caution moving forward. New Democrat MP Charlie Angus says that, "On the whole, Canada dodged a major bullet with what we were expecting to see." The politician, who sits as a new member of the Standing Committee on Canadian Heritage, has in the past several months been sounding an alarm about the impact of DMCA-style legislation in Canada as he sees it (CNM, Jan. 20/05). Noting that the government’s suggestion of a notice-and-notice regime is to his liking, he warns that large rightsholder groups in the U.S. will likely exert pressure to convince Canadian legislators to toughen Ottawa’s stance. "They will be coming after the committee big-time, I think, to push the tide back," he says. Angus says his job on the committee when legislation is brought before it this spring will be to push back against efforts to change the current compromises. "I think we need to come out stronger in the defence of digital culture." He adds that he’s particularly anxious to put an educational use exception for publicly available material back on the agenda. He says the proposal to put a blanket licensing scheme in effect was "outrageous," adding, "placing toll booths in front of students isn’t going to help Canadian artists." No done deals If Angus’ prediction that U.S. rightsholders will attempt to sway the debate holds true, it wouldn’t be the first time in recent years. In the summer of 2002, a carefully crafted compromise bill that would have let nascent Internet retransmitter JumpTV proceed with its business plan fell apart in literally an afternoon as then-minister of Canadian Heritage Sheila Copps laid down the law for the committee examining the bill (CNM, June 14/02). Some CNM sources believe last-minute pressure by large American rightsholders in the film and music industries were responsible for Copps’ override of her bureaucrats’ balancing act. Frequent commentator and copyright law professor Michael Geist agrees that the process likely won’t be without acrimony as legislation goes before the House and the committee, despite the positive ink and comment the government’s proposals have received. Devil in the details Geist tells CNM, "The devil will be in the details on many of these provisions, and particularly on things like anti-circumvention, on the photographer issue, and we’ll have to see precisely what those provisions look like when they’re actually introduced as a bill. But, I think regardless of what the bill looks like, while some people are walking away from the table happy, no one is walking away with everything they wanted. "Sure the recording industry gets a making available right, but we don’t get anti-circumvention provisions that are anywhere near what they are in the United States; and, we get a notice-and-takedown system that is notice-and-notice, which is nowhere near the kind of proposal that industry was calling for. "So, I would be very surprised if there wasn’t intense pressure from all corners, from all sides at the committee stage no matter what the proposal is. Now, I think in a sense that may leave us right where we started with the bill. "It may be that the committee understands that some of this is well-crafted compromises, and to undo one part of this is to have an impact elsewhere, and that it is best to leave it as an entire package rather than playing to one particular industry’s concerns. But, I don’t have any doubt that there will be this intense pressure to push the bill more towards something that is found in the United States as opposed to what is clearly an attempt to craft a Canadian compromise," Geist notes. Legislation is expected to be introduced later this spring.

Copyright reform stakeholders greet reforms with cautious optimism

News | 04/01/2005 5:00 am EST

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