On September 29, 2011 the federal government introduced into Parliament Bill C-11, the Copyright Modernization Act. Canadians have seen a great number of proposals for copyright reform of late: in the last six years, one bill proposed by the Liberals and two proposed by the Conservatives, all died on the order paper. However, with a Conservative majority in Ottawa there is good reason to believe this “fourth time’s the charm”.
This bill is identical to the government’s earlier proposal—Bill C-32, which was introduced in June 2010. For those who have been following the reform process, there are no real surprises—perhaps other than the fact that the government did not tweak any of the controversial provisions found in the previous iteration of the Bill, and specifically those concerning anti-circumvention measures and new fair dealing exceptions. These, and other significant changes, are discussed below.
Expanded Exceptions to Copyright Infringement
The Bill proposes to expand the “fair dealing” provisions currently found in the Copyright Act. While still referred to as “exceptions” and not “user rights”—the crafters of the Bill electing not to adopt the language of the Supreme Court of Canada in CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13—the new provisions would permit the use of copyright-protected material for the purpose of parody or satire. Further, the provisions would also permit the use of copyright-protected materials for education, representing an extension of the existing provisions that provide an exemption for research and private study, criticism, and review.
Previously, critics of the new education exception suggested it would result in students copying whole textbooks, leading to the destruction of the Canadian educational publishing sector and significant losses for trade publishers. In reality, this is highly unlikely. Though the provisions do expand the scope of available fair dealing exceptions, whether a particular use qualifies for the exception still depends on the “fairness” of the use—an analysis whose considerations include the nature of the work itself; the purpose, character, and amount of the use; and the effect of the use on the work, amongst other factors set out by the Supreme Court in CCH.
Additionally, the Bill would make permissible both “time-shifting” and “format shifting”—common household practices that many Canadians would be surprised to learn are illegal acts under the current law—provided certain conditions are met. In particular, Canadians would be permitted to record copyright-protected works for viewing at a later time (time-shifting), provided the works are not kept longer than is reasonably necessary to do so. Canadians would also be permitted to transfer content from one format to another (format-shifting), provided that the original content was legally acquired.
Interestingly, the Bill also creates an exception for non-commercial, user-generated content, known in the popular press as the “YouTube exception”. This provision would allow users to create new content made up of publicly available copyright-protected material (known as “mash-ups”) without infringing copyright. For example, a user could create a home video containing a popular song, and post that video to the internet without fear of a copyright infringement claim. However, the exception would be available only if: attribution is provided (assuming it is reasonable to do so in the context); the individual has reasonable grounds to believe that the underlying work itself is not infringing; and use of the mash-up would not have a substantial adverse effect (whether financial or otherwise) on the exploitation or potential exploitation of the existing work.
The proposed legislation also creates broad new safe harbour exceptions for internet service providers (“ISPs”). In general, the provisions clarify that although ISPs do have a role to play in assisting copyright holders in battling infringement, ultimately, they are not responsible for copyright infringement committed by their customers. Similar to exceptions available to telecommunication service suppliers, under this proposal, ISPs would be protected from liability arising from acts committed by their clients who use the ISPs’ services to infringe copyright. However, if the ISP takes part in the infringing acts, the safe harbour is lost. Similarly, protection is not available for providers whose services are primarily designed to enable acts of copyright infringement, like the services of many torrent providers.
The amendments would also introduce a “notice and notice” system for ISPs: under the system, copyright owners would be able to send a notice alleging copyright infringement to an ISP, who would then be required to forward that notice to its customer, the alleged infringer. If the ISP fails to do so, it could be slapped with statutory damages of between $5,000 and $10,000.
Finally, new exceptions are also provided for infringements of copyright arising out of encryption research, computer and network security assessments, efforts to make computer programs interoperable, and from making back-up copies of software.
Increased Copyright Protections
The proposed legislation introduces new rights for both performers and sound recording makers, who are given the sole right to authorize the making available of, and communication to the public of, their sound recordings over the internet. Performers’ performances (whether fixed or live) would also newly attract moral rights protection.
Photographers, engravers, and portrait makers would also receive new rights. Under the existing copyright regime, the ownership of works created by these artists depends on who had commissioned the work: if commissioned and paid for by a third party, that party is the first owner of copyright in the work. Under the proposed revisions, these artists would receive the same rights currently provided to other authors and artists under the Act, becoming the first owners of copyright in their works regardless of whether such works were commissioned.
Changes to Infringement and Enforcement
The most polarizing provisions of the proposed legislation are found in the section regarding anti-circumvention measures. The Bill proposes making illegal any tampering with technology protection measures—more broadly known as “digital locks”—built into a work.
In one form or another, locks have been placed onto consumer media for years: for example, in 1984 publishers began using technology to frustrate the copying of their movies from videotapes, and many publishers of modern DVDs and MP3s similarly employ digital rights management technologies.
Under the proposals, the Bill would make it illegal for an individual to circumvent, attempt to circumvent, or make available tools that can be used for the purposes of circumventing these locks. Where there is a breach of these provisions, the offender may be subject to nearly all of the remedies otherwise available in situations of infringement. If the breach occurs in a commercial context, the offender is also exposed to possible criminal sanctions—which, in the most grievous circumstances would include fines of up to $1M and a jail sentence of up to five years.
There are a few limited exceptions to the prohibition—pertaining, for example, to circumventions for the purposes of security, privacy, and encryption research, or to meet the needs of people with perceptual disabilities. Notably, however, the exceptions are not practically expected to extend to the fair dealing rights otherwise provided under the Act, nor to the time-shifting and format-shifting rights contemporaneously introduced (discussed above). As a result, critics of the provisions have called for an additional exception, permitting circumvention undertaken for the purposes of exercising rights afforded under the Act—an approach that has been implemented in New Zealand and Switzerland with some success.
On a separate note, the legislation would make it an infringement of copyright for any person to provide an online service primarily designed for the purpose of enabling copyright infringement, like P2P file sharing. A person who is found to have known—or who ought to have known—they are providing such a service, and who is found to have benefited from the provision of said service, would be liable for any copyright infringement that occurred via said service.
Finally, the Bill proposes creating a dichotomy for the application of statutory damages, contingent on whether the infringement is commercial or non-commercial in nature. In the case of non-commercial infringements, the maximum damage award would be $5,000; commercial infringements would carry a $20,000 cap. Commercial infringement minimums would remain at the current $200 amount, while non-commercial infringement would be set at $100.
Under considerable international pressure to reform the Canadian copyright regime—and having experienced the embarrassment of two false starts already—it is likely that the government will push this Bill through Parliament quite quickly. In fact, it is reasonable to expect that Canadians will be living under a new copyright regime early in the new year.
What is less clear, however, is whether the reforms will introduce a “made in Canada” solution that adequately addresses the defects of the existing regime, while effecting a proper balance between the interests of both content creators and users.