Law Times

LAW TIMES / JULY 28/AUGUST 4, 2008 NEW An online resource tool 1.800.263.3269 Bestcase earlug.indd 1 3/26/08 11:52:01 AM Focus On INTERNET/E-COMMERCE LAW Bill C-61 no surprise Reaction to proposed copyright reforms mixed T BY DEREK HILL For Law Times he reaction to bill C-61, the latest round of pro- posed reforms to Canada's Copyright Act, introduced in the House of Commons in June by Industry Minister Jim Prentice, has varied — from little reaction at all to outrage over the bill's anti-circumvention provisions. The bill has been heavily criti- cized for the lack of public con- sultation on the matter, as well for having given the appearance that it was the result of heavy lob- bying by American media indus- tries to replicate the U.S. Digital Millennium Copyright Act. Nevertheless, it was no surprise. "I think what people had been expecting was in there. People were expecting it would deal with the implementation of the WIPO treaties..." says Barry Sookman of McCarthy Tétrault LLP. Canada signed on to the World Intellectual Property Organization's copyright treaty way back in 1996 and had committed to ratifying it. The treaty's aim was to provide ex- tra protections for copyright, due to advances in information tech- nology, and its most controversial element was that it prohibited circumvention of technological protection measures (also known as TCMs, or digital locks), tools used to protect digital works. In fact, only three years earlier, Can- ada's prior Liberal government's similar proposed copyright re- form bill, C-60, was struck down on a non-confidence motion. The key provisions of bill C-61 include the granting of a new right to consumers (something that most Canadians likely already took for granted): they are now al- lowed to copy various purchased media — books, newspapers, pe- riodicals, photographs, videocas- settes, and music — once for each electronic device they own, such as a computer or iPod. However, making multiple copies or back- ups is forbidden. The bill also permits time- shifting, the recording of tele- vision and/or radio broadcasts for future viewing, again recog- nizing the de facto situation in Canada, as this practice has been going on for years. The controversy, however, be- gins with the fact that bill C-61 also contains an anti-circumven- tion clause making it illegal to break digital locks on copyright- ed material. The fear is that man- ufacturers of CDs, DVDs and distributors of DRM-protected files will simply install TPMs, thus effectively revoking all the newly gained digital rights and making criminals out of those who circumvent them. www.lawtimesnews.com Consumer groups have been outspoken about these provisions and the related fallout in the marketplace. They ar- gue, for example, that cell- phones would be locked down, preventing con- sumers from using their own devices with another provider once their term of service ran out. Un- der the bill, they would be liable for $20,000 in damages for unlocking a cellphone. People caught down- loading music or video files illegally could also be sued for a maximum of $500, but uploading a file to a peer-to-peer network or YouTube could result in lawsuits of $20,000 per file. The most common critique of the bill is that it does not preserve fair dealing in the digital environment, meaning that Canadians circumventing a TPM/digital lock for research, private study, news-reporting, or criticism will violate the law, even if their intended use of the copy- right work is otherwise permitted. "This legislation is in existence around the world, including in the European Union, the United States, and virtually all of Canada's trading partners," says Sookman. "It's been examined and it's been found that it doesn't impact [fair dealing] — in fact, what the evi- dence has shown about this type of legislation, is that it provides an environment which induces cre- ators to create works and distribute works. So it actually provides more works with much more varied models for purchasers, for consum- ers. It actually provides consumers with access to works in different formats that they wouldn't have . . . Contrary to what people are saying, which I think is way, way overblown, it actually is good for consumers and gives consumers things that they want." Sookman cites as an example the fact that music consumers us- ing a service like Rhapsody can is overturning the bal- ance inherent in copy- right in this bill," he says. "Whenever a distributor decides to put in place a digital contract or some kind of digital-content protection, the lack of balance struck by that distributor is the law — it [the bill] actually gives remedies under law to the business model im- posed by the distribu- tor. And there's nothing for consumers in that — that's just stripping rights. Stripping the bal- ance that the act is sup- posed to put in place and replacing it with some- thing that's imposed by corporate middleman." The real problems pay a flat rate, say $9 per month, and listen to an entire library of music, rather than "permanently" downloading a song for 99 cents. "That's a very useful thing that people would pay for — but without technological measures to support that kind of business model it wouldn't be available," he said. "So the fact that rights- holders are able to protect their intellectual property, actually gives users more access to things that they want, but wouldn't oth- erwise be available. "The irony is, that by protect- ing works, consumers get access to a greater number and varied rep- ertoires of works — it's actually the opposite of what everyone's saying. The U.S. government, the U.S. copyright office, who've studied this, have made that find- ing very explicitly," he says. He adds that the anti-circum- vention provisions are "right in line with the international standards throughout Europe, throughout the rest of the world," and notes that the three exceptions to the provisions in bill C-61 did not ex- ist in many countries' legislation, "so we'll be kind of at the leading edge of countries that have those exceptions for consumers." Not everyone agrees. David Fewer, staff counsel at the Cana- dian Internet Policy and Public Interest Clinic, says it's important to remember that the DMCA, the American legislation upon which bill C-61 was apparently based, was the first anti-circum- vention law in the world, and that it made mistakes. "The warts are very well- known," he says. "A number of nations have put in place anti- circumvention legislation post DMCA that have improved on the DMCA, taking different tacks, and why aren't we follow- ing those models? "The big problem," says Few- er, "is the bill has its head in the sand in the digital context. We've got the situation where you can take something off of a CD and put it onto an iPod. But you can't take something off a DVD and put it onto your iPod Video, even though from a consumer's perspective, it's the exact same thing . . . The act has actually specifically said that these acts are illegal, because there's content protection on it," says Fewer. Fewer says consumers have lost a lot on how the bill is structured around anti-circumvention laws. "I don't think enough people are realizing that the government around circumvention are commercial piracy, not consumer use, says Fewer, adding that the laws are no solution to downloading and file-sharing, as such laws in the States actually preceded file- sharing networks and had no impact on slowing their speed or discouraging their use. "I think you've got to look at collective licensing models. Those are solutions that are being proposed in Canada. "What's so odd about this legislation is there's no body of evidence, statistical or eco- nomic, that justifies this law," says Fewer. "Usually we say that copyright law is marketplace framework legislation, it's fixing marketplace failure, you need it to in place to allow the market to function. You can see that in copyright per se, but we have copyright — we've fixed that! These aren't making up for some inability of copyright law to function. Copyright law is func- tioning perfectly fine. We're just saying we need this additional form of right around circumven- tion and there's no policy justi- fication for it at all. There's no evidence supporting it." The next step for the bill is LT second reading. PAGE 9

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