Devices, and not the memory within, are digital audio recorders: CPCC

In its 2008-2008 private copying tariff application, the Canadian Private Copying Collective asks for a levy on digital audio recording devices such as MP3 players to be reinstated. The CPCC collected nearly $4 million under such a levy until December 2004, when the Federal Court of Appeal overturned the Copyright Board of Canada’s tariff decision. However, in its 2008-2009 Proposed Tariff Backgrounder – excerpts from which appear below – the CPCC maintains that the appeals court left the door open for its latest tariff application.What are digital audio recorders and why does the CPCC propose a levy on them?In its decision on the 2003-2004 Private Copying Tariff, the Copyright Board referred to iPods and other MP3 players as digital audio recorders. According to the CPCC’s ongoing research, more than 90% of all copying onto digital audio recorders is of pre-recorded music (96% of copying for the most recent six-month period, which ended December 31, 2006).Canadians are also using digital audio recorders more and more for private copying of music, as compared with other blank audio recording media. In 2003/2004, 1% of their most recent music copying used digital audio recorders, but in 2006/2007 this has increased to 29%. How can the CPCC request a levy on digital audio recorders, when the Federal Court of Appeal ruled that such a levy is unacceptable without a change to the Copyright Act?The CPCC applied to the Copyright Board in its proposed 2003-2004 Private Copying Tariff for a levy on the memory embedded in a digital audio recorder. This approach assumed that the hard drive or flash memory incorporated into digital audio recorders was something separate from the digital audio recorder itself and, therefore, that the levy could apply to the embedded memory. The Copyright Board agreed with the CPCC and approved a levy on that basis.Some of the parties affected by the new levy challenged the board’s decision. They argued to the Federal Court of Appeal that the embedded memory in a digital audio recorder is no longer something separate when it is incorporated into a digital audio recorder. As the court itself noted, it was asked to decide "whether a permanently embedded or nonremovable memory, incorporated into a digital audio recorder (MP3 player), retains its identity as an "audio recording medium" and can be levied as such under Part VIII" (Federal Court of Appeal Decision, paragraph 133). The court ruled that "The board erred when it held that it could certify a levy on the memory integrated into a digital audio recorder" (Federal Court of Appeal Decision, paragraph 160, emphasis added).The Federal Court of Appeal was not asked to decide, and did not hear arguments, as to whether a digital audio recorder is itself an audio recording medium as defined in the Copyright Act, that is, a medium onto which sound recordings may be reproduced and that is of a kind ordinarily used by consumers for that purpose. The CPCC believes that this is clearly the case. Advice from the CPCC’s legal counsel, Ogilvy Renault, confirms that there is a sound basis for requesting a levy on digital audio recorders.The CPCC’s current proposal is consistent with the decision of the Federal Court of Appeal. The 2008-2009 proposed levy applies not to internal memory, but to digital audio recorders themselves.What is and what is not a digital audio recorder?The proposed tariff includes a definition of what constitutes a digital audio recorder, which is intended to exclude cellular phones, PDAs (such as Palm Pilots), or personal computers that also have embedded memory and can record and play music. However, the definition is intended to include digital audio recorder that may also have secondary uses, such as calendar or address book functions, radio reception, data storage, etc.For example, iPods would be subject to the tariff because they are designed, manufactured, advertised and primarily used for copying music and are capable of being used to play music, even though they may also be used to store digital images and to copy and play audio-visual files.Aren’t digital audio recorders a device rather than a medium, and therefore not leviable under the Copyright Act?Technology has changed significantly since Parliament created the private copying regime in the Copyright Act. At that time, all of the existing equipment used to copy music was separate from the media onto which the music was copied. The most typical examples then were analogue audio cassettes (tapes) and the analogue recorder and playback equipment used to record onto tapes (tape recorders). It was obvious that no one could copy music onto a tape recorder itself, only onto a tape.In contrast, with digital audio recorders, such as the iPod, the recording, storage and playback functions are no longer separate. Recorded music is copied onto the digital audio recorder itself, rather than onto any separate medium that must be inserted into a separate device. The question the Copyright Board must now decide is whether a digital audio recorder itself is an "audio recording medium" as defined in the private copying provisions of the Copyright Act, which includes Parliament’s direction that an "audio recording medium" should be defined "regardless of its material form".

Devices, and not the memory within, are digital audio recorders: CPCC

Broadcast | February 21, 2007

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