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Want to Keep Canadian AI Thriving?: Create a Copyright Exception for Informational Analysis

Michael Geist Law RSS Feed - Thu, 2018/10/18 - 09:10

Prime Minister Justin Trudeau met earlier this week with Jean-Francois Gagné, the CEO of Element AI, the Montreal-based applied artificial intelligence lab. Trudeau tweeted that the two men “talked about what Canadians are doing in AI in Montreal & across the country, and how we can keep the industry thriving.”

 

Justin Trudeau tweet, October 15, 2018, https://twitter.com/JustinTrudeau/status/1052026305737347077

Well, since the Prime Minister asked, Element AI recently appeared before the Standing Committee on Industry, Science and Technology as part of the copyright review with a simple ask: create a new copyright exception for information analysis. Element AI was joined by several other technology groups, including ITAC and the Business Software Alliance, who all raised the same issue.

I highlighted the link between copyright and AI in a column last year, calling for a text and data mining exception. The column noted:

Making machines smart – whether engaging in automated translation, big data analytics, or new search capabilities – is dependent upon the data being fed into the system. Machines learn by scanning, reading, listening or viewing human created works. The better the inputs, the better the output and the reduced likelihood that results may be biased or inaccurate.

Copyright law crops up because restrictive rules may limit the data sets that can used for machine learning purposes, resulting in fewer pictures to scan, videos to watch or text to analyze. Given the absence of a clear rule to permit machine learning in Canadian copyright law (often called a text and data mining exception), our legal framework trails behind other countries that have reduced risks associated with using data sets in AI activities.

Element AI describes information analysis as “encompassing the use of processing techniques to obtain and process text, images, sound, video, and other forms of data in order to generate new facts, discover patterns, and analyse relationships.” It notes that current uncertainties in the Canadian Copyright Act limit the ability for Canadian companies to “access a basic, necessary resource to train their algorithms.” The solution? A fair dealing exception for informational analysis:

Recognizing a limited informational analysis fair dealing exception will echo and support research to grow Canada’s IP culture. This exemption can help all players of Canada’s AI ecosystem further test, train and research new innovative techniques, thereby connecting with the clear policy objectives of fostering a culture in Canada of innovation and intellectual property.

The Element AI position is echoed in similar submissions to the committee from the BSA (which includes members such as Apple, Adobe, and Oracle) and Microsoft, both strong advocates for copyright. The BSA warns:

As currently enacted, Canada’s Copyright Act creates uncertainty about the legal implications of key analytical techniques, such as text and data mining and machine learning, that are foundational to the development of AI. Accordingly, to help realize Canada’s strategy for becoming a global leader in AI and to facilitate the many societal benefits of AI, we urge the Committee to recommend the adoption of an express exception to ensure that copying a lawfully accessed work for the purpose of “information analysis” is not infringing.

Microsoft’s brief to the committee
calls for a machine learning exception, noting that many other countries have developed similar exceptions:

Outside of Canada, countries, including Japan, the United States and China, have extended and are expanding legal protections for broad machine learning techniques including text and data mining. Japan recently implemented changes to its copyright laws that significantly expanded and clarified an already forward-looking machine learning exception. The UK permits text and data mining for certain purposes, and is currently exploring broadening its exception as it increasingly recognizes the benefits of machine learning for all users. China, Singapore and Thailand are focused on similar digital copyright reform and have similarly proposed broad and unrestricted machine learning exceptions. Unsurprisingly, these countries are also at the forefront of research involving data analytics and artificial intelligence, including machine learning.

As I argued last year, there are two ways to overcome the AI barrier:

First, Canada could emulate the U.S. fair use model by making the current list of fair dealing purposes illustrative rather than exhaustive. The U.S. exception is open to any purpose, as striking a fair balance depends upon the use of the work, not the purpose of the copying. Since machine learning does not harm the primary purposes of the original work, most text and data mining will qualify as fair use.

Second, other countries have tried to address the issue by creating a specific exception for text and data mining or computer informational analysis. For example, Britain’s exception allows copies of works to be made without permission of the copyright owner for the purposes of automated analytical techniques to analyze text and data for patterns, trends, and other information. The law does not allow contracts to restrict data mining activities, but the exception is limited to non-commercial research.

Canada’s significant investment in AI needs a legal framework that ensure Canadian businesses and researchers are not placed at a global disadvantage. Whether by way of fair use provision or a more targeted informational analysis fair dealing exception, the government’s hopes for Canadian AI leadership is linked to AI-focused copyright reforms.

The post Want to Keep Canadian AI Thriving?: Create a Copyright Exception for Informational Analysis appeared first on Michael Geist.

Does Canadian Privacy Law Apply to Google Search?

Michael Geist Law RSS Feed - Tue, 2018/10/16 - 09:29

Last week, the Privacy Commissioner of Canada filed a reference with the federal court in a case that was billed as settling the “right to be forgotten” issue. Yet a careful read of the application reveals that the case isn’t about the right to be forgotten. Rather, it involves a far more basic issue: is Google’s search engine service subject to PIPEDA, Canada’s private sector privacy law? The case arises due to a right-to-be-forgotten complaint (a complainant wants search results referencing news articles they say are outdated, inaccurate, and disclose sensitive information removed from the Google search index), but the court is not being asked whether the current law includes a right-to-be-forgotten. Instead, the very application of Canadian privacy law to Google search is at stake.

The two questions in the reference are as follows:

1. Does Google LLC (“Google”), in the operation of its search engine service, collect, use or disclose personal information in the course of commercial activities within the meaning of paragraph 4(1)(a) of PIPEDA when it indexes web pages and presents search results in response to searches of an individual’s name?

2. Is the operation of Google’s search engine service excluded from Part 1 of PIPEDA by virtue of paragraph 4(2)(c) of PIPEDA because it involves the collection, use or disclosure of personal information for journalistic, artistic or literary purposes and for no other purpose?

Google maintains that the right to be forgotten would violate the Canadian Charter of Rights and Freedoms, but given the limited scope of the application the court does not need to address the issue. The Privacy Commissioner argues that it first needs certainty on the application of the law to Google search. If it applies, the Commissioner will proceed with a complaint investigation. The application is a bit surprising given that the record before the court is very thin. The Commissioner could presumably have conducted the investigation, reached a finding, and then had the issue raised before the courts with a stronger record and all the issues on the table.

While the issue in the reference may surprise some given that Google’s economic success, federal privacy law is limited to commercial activities and contains several notable exceptions. As I argued when the Privacy Commissioner first raised the right to be forgotten issue in a consultation earlier this year:

there is reason to doubt whether the Personal Information Protection and Electronic Documents Act (PIPEDA) applies to search results. Federal privacy law is limited to commercial activity, yet search results are typically provided at no cost to the user nor the sites being indexed. Indeed, all the activity behind search – indexing content, developing algorithms to identify relevant results, and the display of those results – fall outside a conventional commercial transaction. There may be paid results or other advertising displayed with some search results, but those are arguably secondary to the indexing, ranking, and display of the relevant links.

Moreover, David Fraser unpacked the arguments around the exception for journalistic or literary purposes in this 2016 post, noting:

Search engines are fundamentally journalistic or literary operations, particularly when providing a user with access to news media content. At the same time, they are also providing news media producers with access to readers.

The analysis suggests that the Privacy Commissioner’s reference is no slam dunk. Indeed, there are strong arguments that PIPEDA does not apply to the search indexing and display. The right to be forgotten is problematic for several reasons, but the issue – along with the limited scope of PIPEDA – would be better addressed as part of a long overdue review and update to Canada’s privacy laws.

 

The post Does Canadian Privacy Law Apply to Google Search? appeared first on Michael Geist.

assumptions

Fair Duty by Meera Nair - Sun, 2018/10/14 - 23:10

As of this writing, in the ongoing review of the Copyright Act, 87 briefs have been posted by the Standing Committee on Industry, Science and Technology. Discussion spans a variety of topics; on the volatile issue of the use of fair dealing in post-secondary institutions, there are many submissions from academic institutions, as well as Canadian writers, publishers, and representatives thereof.

Perhaps lost in that crush are students’ voices. Writing on behalf of students across the country, are two organizations: the Canadian Alliance of Student Associations (CASA) and the Undergraduates of Canadian Research-Intensive Universities. Each submission calls on the Government to leave fair dealing unchanged from its present incarnation and practice. The students are clear in their understanding of the exception—that fair dealing is not a veil for free dealing. They also appreciate that fair dealing has the capacity to reduce some of the costs of post-secondary education.

CASA’s submission reminds all that collective licensing costs attributed to post-secondary institutions will ultimately be borne by students:

Post-secondary students are directly impacted by decisions of the Copyright Board … as it is responsible for setting tariffs on copyrighted educational material. While these tariffs are billed to post-secondary institutions, they are sometimes directly passed on to students through ancillary fees … Other times, the tariff fee is paid through [the institution’s] operating budget, which constrains the institution’s ability to provide other critical resources, including updated infrastructure and quality teaching staff, to post-secondary students.

This aspect has not received as much attention as it deserves. That said, the issue of cost was raised to the Standing Committee, but only to quantify the collective license fee as equivalent to “a case of beer per student.” While this may have been an attempt to reassure the Committee that students can bear this cost, the unspoken assumption was that all students rely on excerpts (thus necessitating a fee).

In terms of how students cope with existing fees, Aran Armutlu, chairperson of the BC Federation of Students, recently had this to say:

2nd: Assume every student is going through financial hardship. Every year that passes we are at new record highs with the costs associated w/ attending post-secondary. If there is other quality options that exist that help alleviate those costs, why wouldn’t you use it? 5/5 #OER

— Aran Armutlu (@AranTheArmenian) October 11, 2018

“Assume every student is going through financial hardship.” As assumptions go, this one is more plausible.

A day later, the Scholarly Publishing and Academic Resources Coalition (SPARC) issued promising news with respect to OER:

We did it! #OER has saved students, schools, and parents $1 billion. #OpenEd18 https://t.co/uxY9wu6yu9

— SPARC (@SPARC_NA) October 12, 2018

(Even though OER was still in its infancy in 2013, SPARC had issued a challenge to the educational community: to save $1 billion by 2018.)

Consider the time frame: 2013-2018. Astute Canadians will notice the overlap with the period of time from the last amendments to the Copyright Act, to the start of the present review. To be more explicit—this is part of the backdrop to the figures proffered to the Committee that illustrated declines in copyright-related income by educational publishers.

As SPARC explains, the goal was to document the savings that accrued when a “traditional textbook” (with traditional representing a proprietary, for-cost textbook) was replaced with an OER book. The regions/levels of savings are:

U.S. & Canada Higher Ed: $921,783,169
U.S. & Canada K-12: $45,051,066
International: $38,500,000
Total: $1,005,334,235

Without further details of the Higher Ed savings, we do not know how much of the nearly $922 million dollars is specific to Canadian students. Yet, a reasonable assumption would be that millions of dollars are being saved. This is relevant to any discussion concerning declines in textbook income, or declines in licensing income from excerpts of textbooks.

Committee members could also reasonably assume that post-secondary institutions are slowly, but steadily, addressing the question posed by Mr. Armutlu: “If there are other quality options that exist that help alleviate those costs, why wouldn’t you use it?” The trend to OER is likely to increase.

Granted, at this time, OER substitution is not prevalent at all levels of study across all disciplines. But, SPARC’s data should provoke at least a modicum of curiosity against the claims that fair dealing alone is responsible for the drop in income of copyright owners, and, whether reliance on excerpts applies to the entirety of the Canadian post-secondary student population.

The Full “Culture Exception” That Isn’t: Why Canada Caved on Independent Cultural Policy in the USMCA

Michael Geist Law RSS Feed - Thu, 2018/10/11 - 10:07

In the final weeks of the USMCA negotiations, Canada signalled that a full cultural exception was a non-negotiable issue with Prime Minister Justin Trudeau wading in to emphasize the importance of the issue. While the resulting deal has garnered applause from many culture lobby groups (music, magazines, publishers, ACTRA), the reality is that the government did not obtain a full cultural exception. In fact, after criticizing the Conservatives for accepting exceptions to the cultural exception in the TPP (and making it a key issue in the CPTPP once the U.S. exited the agreement), the Liberal government similarly included two exceptions and agreed to an extension in the term of copyright that will have a far more damaging impact on access to Canadian culture than any proposed USMCA provision.

The TPP featured two exceptions to a general cultural exception that excluded the sector from the ambit of provisions on cross-border trade in services:

Canada reserves the right to adopt or maintain any measure that affects cultural industries and that has the objective of supporting, directly or indirectly, the creation, development or accessibility of Canadian artistic expression or content, except:

a) discriminatory requirements on services suppliers or investors to make financial contributions for Canadian content development; and 

b) measures restricting the access to on-line foreign audiovisual content. 


The first – discriminatory requirements to support Cancon development – raised a legitimate concern about the possibility of mandated Cancon payments by foreign providers. While Canadian groups have actively lobbied to require foreign providers such as Netflix to make payments similar to those paid by Canadian broadcasters and broadcast distributors, they have been less supportive of Netflix benefiting from those Cancon funding mechanisms. Payment mandates without the same benefits would likely (and rightly) be viewed as discriminatory and the TPP would have blocked such an approach. The second exception – restricting access to online video services – would have had no practical policy cost to Canada given its support for net neutrality and the unlikely prospect of supporting blocking foreign services. However, then-Canadian Heritage Minister Melanie Joly insisted that the exceptions had to go, telling an industry audience that “it was a tough battle, but I’m really grateful that it’s a battle we were able to win.”

Despite having set the bar at a full cultural exception, the reality is that the USMCA also includes two exceptions to the exception, both of which use the treaty overrule regulatory decisions of the supposedly independent Canadian Radio-television and Telecommunications Commission. Annex 15-D requires Canada to (1) rescind the CRTC broadcast regulatory policy that stopped the simultaneous substitution policy for Super Bowl broadcasts (ie. the policy that recently allowed Canadians to watch the U.S. feed and U.S. commercials) and (2) enable U.S. home shopping broadcast services – namely QVC – to be authorized for distribution in Canada.

Both exceptions are the direct result of U.S. lobbying. President Donald Trump told a rally last week that the simultaneous substitution issue simply took a two minute phone call with NFL Commissioner Roger Goodell and the QVC decision stems from a 2016 CRTC ruling that denied it distribution authorization in Canada. The Liberal government has typically adopted a hands-off approach on administrative issues such as these ones – particularly when the issue is still before the courts as is the simultaneous substitution policy – but it effectively intervened by caving to U.S. pressure in agreeing to overrule its regulator.

Despite the industry applause, these exceptions are arguably a bigger surrender on the independence of Canadian cultural policy than the TPP envisioned. The TPP included two provisions that had little likelihood of being implemented and merely involved future policy flexibility (industry lawyer Peter Grant argued that they did not change anything at all). Yet the USMCA exceptions strike at the heart of Canada’s ability to make its own cultural policy decisions with the government caving on two issues of concern to U.S. lobby groups.

Why the change in attitude toward the USMCA’s cultural exceptions?

Simply put, Canadian cultural groups were concerned with possible restrictions on mandated Cancon contributions or Netflix blocking, but have few qualms about simultaneous substitution or permitting another shopping network to be distributed in Canada. The claims that a full exception is critical was always hyperbole as groups typically applaud exceptions they like and criticize those they don’t.

In fact, the treaty’s biggest impact on Canadian culture will be the copyright term extension, which will reduce access to Canadian heritage for decades. That means the works of hundreds of Canadian authors, composers, and creators will be locked down until at least 2040. Moreover, with studies indicating that the term extension could add hundreds of millions to education costs, 20 extra years of copyright protection will not come cheaply. The Canadian government treats copyright as both industrial and cultural policy, hence the shared responsibility between ISED and Canadian Heritage. However, culture can’t be said to be off the table when the government agrees to changes to Canadian copyright that will limit severely access to our culture.

Since many cultural groups support the extension, there is no criticism. But make no mistake: the USMCA represents a surrender of the independence of Canadian broadcasting and copyright policy with exceptions to cultural regulation that may be more significant than any found in previous Canadian free trade agreements.

The post The Full “Culture Exception” That Isn’t: Why Canada Caved on Independent Cultural Policy in the USMCA appeared first on Michael Geist.

How Canada Surrendered Policy Flexibility for Data Localization Rules in the USMCA

Michael Geist Law RSS Feed - Wed, 2018/10/10 - 10:50

The digital policy implications of the USMCA have attracted increasing attention as Canadians consider the risks that the agreement could limit future policy flexibility. In particular, the agreement restricts the use of data localization, an increasingly popular legal method for addressing public interest concerns associated with the collection of online information by mandating that data be stored within the local jurisdiction. Restrictions on data localization are not entirely new to Canada, since similar provisions are found in the CPTPP (the successor to the Trans Pacific Partnership). That means that Canada has already agreed to limits on data localization with or without the USMCA. However, the USMCA’s data localization provision differs in a significant way, suggesting that the Canadian government has agreed to an even more restrictive approach than that found in the CPTPP.

The USMCA provision contained at Article 19.12 states:

No Party shall require a covered person to use or locate computing facilities in that Party’s territory as a condition for conducting business in that territory.

There are no further exceptions or limits to the data localization provision in the chapter, though Article 32.1(2) of the USMCA notes that paragraphs a, b, and c of Article XIV of the General Agreement on Trade in Services (GATS) is incorporated into the digital trade chapter. Those paragraphs create exceptions for measures (1) designed to protect public morals or maintain public order; (2) protect human, animal, or plant life or health; and (3) comply with laws and regulations including prevention of deceptive practices, protection of privacy, and safety. Canadian negotiators presumably interpret the GATS provision as providing an opening for privacy protection, thereby allowing BC and Nova Scotia to retain their provincial data localization laws.

By comparison, Article 14.13 of the CPTPP features the same general prohibition and the applicability of the GATS exception, but adds the following additional exception:

Nothing in this Article shall prevent a Party from adopting or maintaining measures inconsistent with paragraph 2 to achieve a legitimate public policy objective, provided that the measure:

(a) is not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on trade; and
(b) does not impose restrictions on the use or location of computing facilities greater than are required to achieve the objective.

In other words, Canada previously agreed to restrictions on data localization rules in the CPTPP but carved out an exception for any legitimate public policy objective (subject to not being applied in a discriminatory manner or beyond that necessary to achieve the objective). The USMCA removes that flexibility, creating a significant limitation on the ability for Canadian governments to safeguard the public interest. Indeed, once implemented, policy measures on data localization will be restricted beyond the limits imposed by the CPTPP and leave Canada vulnerable to a challenge should future governments seek to introduce data localization mandates.

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Why the USMCA Will Enhance Online Free Speech in Canada

Michael Geist Law RSS Feed - Fri, 2018/10/05 - 09:35

Internet free speech is not typically an issue associated with trade agreements, but a somewhat overlooked provision in the newly-minted U.S.-Mexico-Canada Agreement (USMCA) promises to safeguard freedom of expression by encouraging Internet companies to resist pressure to remove content. My Policy Options op-ed notes the USMCA’s Internet safe harbour rule – modelled on U.S. law – remedies a longstanding problem in Canada that left large Internet platforms reluctant to leave third party content such as product reviews, blog posts, and social media commentary online in the face of unsubstantiated complaints.

Once implemented, Internet companies will benefit from assurances they will not face liability for failing to take down third party content or for proactively taking action against content considered harmful or objectionable. While the safe harbour provision does not apply to intellectual property, when combined with the preservation in the deal of the USMCA protects Canada’s notice-and-notice system for copyright, whereby rights holders can file complaints over alleged infringements but there is no takedown procedure for the removal of content. Taken together, the Canadian legal framework will encourage free speech, largely looking to court orders for mandated takedowns of content or good faith efforts by platforms to address harmful content.

The absence of a Canadian safe harbour rule has meant the same companies that require court orders prior to the removal of content for claims originating in the U.S., frequently take down lawful content in Canada based on mere unproven allegations due to fears of legal liability. Further, the absence of safe harbour protections creates a disincentive for both new and established services to use Canada to store data or maintain a local presence.

The Internet safe harbour approach originates from the earliest days of the commercial Internet. In 1996, the United States enacted the Communications Decency Act, legislation designed to address two emerging concerns: the online availability of obscene materials and the liability of Internet services for hosting third party content. The U.S. Supreme Court struck down the obscenity provisions on constitutional grounds, but the safe harbour remained intact and quickly emerged as a cornerstone of U.S. Internet policy.

Indeed, the safe harbour provisions have been characterized as the single most important legal protection for free speech on the Internet. Over the past two decades, every major Internet service – from Google to Amazon to Yelp – has turned to the provision to ensure that courts determine what is lawful and permitted to remain online.

Despite the free speech benefits, the rules can be controversial, particularly since concerns regarding disinformation on social networks is an increasing concern, with policy makers and the public pressuring online providers to more proactively address online harms. The challenge is to balance the benefits of removing illegal or harmful content with the risks of active monitoring of content, upload filters, or other measures that may ultimately curtail free speech online.

The agreement permits implementation of the safe harbour provision in several ways,  stating that “a Party may comply with this Article through its laws, regulations, or application of existing legal doctrines as applied through judicial decisions.” While the U.S. approach involves statutory protections, Canada may initially rely on legal doctrines through judicial decisions.

That could involve refraining from implementing new rules that hold Internet companies liable for third party content on their systems and leaving it to the courts to reject claims that run counter to the safe harbour principle. In doing so, officials would maintain the need for responsible conduct by Internet companies without overbroad monitoring or unwarranted takedowns.

Canada has sought to jumpstart the innovation agenda by prioritizing measures that might attract global Internet giants and facilitate the development of home-grown success stories such as Hootsuite and Spotify. The USMCA safe harbour removes a significant legal barrier to that agenda by reducing liability risks for business and providing Canadians with long-overdue safeguards for Internet free speech.

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Setting the Standard?: How the USMCA Quietly Reshapes Global Digital Trade Agreements

Michael Geist Law RSS Feed - Thu, 2018/10/04 - 09:15

The United States-Mexico-Canada Agreement (USMCA) is more than just an updated version of the North American Free Trade Agreement. With the inclusion of a digital trade chapter, the deal sets a new standard for e-commerce that seems likely to proliferate in similar agreements around the world. My Washington Post op-ed notes that negotiators have touted the benefits of addressing modern forms of commerce, but the reality is that the USMCA digital trade chapter raises many concerns, locking in rules that will hamstring online policies for decades by restricting privacy safeguards and hampering efforts to establish new regulation in the digital environment.

Digital trade provisions are a relatively recent addition to the free trade world, but they have quickly coalesced around a common approach. Starting with the Trans Pacific Partnership (since renamed the Comprehensive and Progressive Agreement for Trans Pacific Partnership with the U.S. exit in 2017), e-commerce or digital trade chapters have cropped up in large agreements such as the USMCA and little known ones such as the recent Singapore-Sri Lanka trade agreement.

The chapters invariably include foundational principles such as certainty in electronic contracting, the validity of electronic signatures, nondiscriminatory treatment of digital services and restrictions on imposing customs duties on digital products transmitted electronically. So long as the provisions foster greater certainty for online trade, the chapters reflect well-established conventions and should be embraced.

The more problematic provisions, however, focus on the rules associated with data, the place where much of the value in digital trade lies. For example, the USMCA includes rules that restrict data localization policies that can be used to require companies to store personal information within the local jurisdiction. Jurisdictions concerned about lost privacy in the online environment have increasingly turned to data localization to ensure their local laws apply. These include the Canadian provinces of British Columbia and Nova Scotia, which have data localization requirements to keep sensitive health information at home that may be jeopardized by the agreement.

The digital trade chapter also bans restrictions on data transfers across borders. That means that countries cannot follow the European model of data protection that uses data transfer restrictions as a way to ensure that the information enjoys adequate legal protections. In fact, with the European Union adopting even higher standard privacy rules earlier this year, countries could find themselves caught in a global privacy battle in which Europe demands limits on data transfers, while the USMCA prohibits them.

The data localization and data transfer rules may erode efforts to safeguard privacy and many other provisions represent a lost opportunity to establish higher standards. Indeed, as the U.S. touts high standard intellectual property protections in its trade agreements, it seemingly opts for low standard digital trade protections.

For example, the USMCA has requirement to maintain anti-spam rules and online consumer protection laws. However, neither provision contains any specificity, meaning the requirements can be met without effective measures. The same is true for personal information protection requirements, which call for a legal framework to protect the personal information of users of digital trade, but buried in a footnote is an acknowledgement that merely enforcing voluntary undertakings of enterprises related to privacy is sufficient to meet the obligation.

The provisions related to net neutrality similarly miss the mark. The USMCA just establishes “principles on access to and use of the Internet for digital trade” with none of the principles coming close to a comprehensive approach to net neutrality and the provision falling well short of well-established laws in Canada.

An imperfect digital trade chapter would ordinarily mean little for global e-commerce. Yet the USMCA chapter builds on the CPTPP and effectively entrenches the approach as the model for digital trade in agreements worldwide. In fact, it seems likely that the same provisions will be used in multi-lateral instruments, including efforts at the World Trade Organization to establish similar e-commerce rules.

In doing so, a chapter that has never been subject to public scrutiny or debate, fails to reflect many global e-commerce norms, and may ultimately restrict policy flexibility on key privacy issues, will have been quietly established as the go-to international approach. Before the USMCA sets the standard to be used around the world for decades, there needs to be a renewed effort to ensure that it meets the needs of a far broader array of businesses, consumers and domestic policy makers.

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The USMCA and Copyright Reform: Who is Writing Canada’s Copyright Law Anyway?

Michael Geist Law RSS Feed - Wed, 2018/10/03 - 09:15

Canada’s year-long copyright review has thus far featured dozens of witnesses from creators such as singer Bryan Adams to telecom giants Bell and Telus. While the review is designed to help Canadian policy makers craft a roadmap for future reforms, the release of the U.S.-Mexico-Canada Agreement (USMCA), the successor to NAFTA, represents a significant detour as it contains a detailed intellectual property rights chapter that effectively cedes many key issues to U.S. trade negotiators.

My Globe and Mail op-ed notes that in the weeks leading up to the conclusion of the trade pact negotiations, most of the attention was focused on supply management and the dairy sector, the threat of tariffs on the automotive industry, and the future of dispute resolution provisions. Yet once the secret text was released just after midnight on Sunday, the mandated reform to Canadian copyright law became more readily apparent.

Leading the way is a requirement to extend the term of copyright protection from the current term of the life of the creator plus 50 years to the life of the creator plus 70 years. The additional 20 years of protection will effectively lock down the public domain in Canada for two decades, with no new copyright expiry on works until 2040 (assuming the agreement takes effect in 2020).

The Liberal government emphasized its commitment to excluding Canadian cultural policy from the ambit of the agreement (which it did subject to an exception for simultaneous substitution of U.S. broadcasting), but extending the term of copyright will have a far greater impact by reducing public access to Canadian cultural heritage. Moreover, with studies indicating that the term extension could add hundreds of millions to education costs, 20 extra years of copyright protection will not come cheaply.

The government has touted a U.S. concession that will allow Canada to retain its notice-and-notice system for allegations of copyright infringement, but that was the only bright spot in a chapter that otherwise restricts future policy flexibility. The limits are particularly noticeable with respect to Canada’s anti-circumvention rules, which provide legal protections for digital locks found on electronic books or DVDs. They will be subject to trade rules that severely limit the ability for policy makers to craft exceptions that ensure reasonable consumer access to the content for which they have paid. Canada previously insisted on the suspension of similar provisions in the Comprehensive and Progressive Trans Pacific Partnership Agreement.

The IP chapter will also require Canada to re-write legislation that was passed only a few years ago. For example, Canada’s anti-counterfeiting measures are destined for change after the USMCA included requirements to grant customs officials the power to seize suspect shipments without a court order, even if the goods are in-transit and not destined to remain in Canada.

While the U.S. has exported some of its most restrictive copyright laws to Canada, its flexible rules that lie at the heart of its innovation policy are nowhere to be found, placing U.S. companies at a distinct advantage over their Canadian counterparts. For example, fair use, a staple of U.S. law, is not included in the USMCA. This creates an uneven playing field, where U.S. companies and creators rely on an open system of exceptions for innovative technological uses (such as text and data mining for artificial intelligence), while Canadians are confined to a limited set of purposes identified in the Copyright Act.

Similarly, U.S. rules that mandate that all government works are freely available fall outside the deal, meaning that Canada may retain its outdated crown copyright model that vests full copyright in government works.

As the copyright review continues, the government will need to reassess its approach in light of the USMCA. First, the scope of the review should be expanded to consider the ramifications of the deal. This should include assessing whether there is room for flexible implementations of the new obligations.

Second, the review recommendations must account for a significant shift in the copyright balance in Canada as a result of the treaty. Rights holders have been lobbying for new rights or more limited exceptions. The USMCA effectively gives rights holders a massive gift with 20 years of additional protection alongside stronger enforcement measures. Restoring the copyright balance will mean rejecting a further distortion of the balance and instead considering expanding copyright exceptions.

Canada’s new trade agreement means that the U.S. will effectively write some of the key provisions in the next copyright law. If Innovation, Science and Economic Development Minister Navdeep Bains is to retain a made-in-Canada approach to copyright, it is time to take back the pen and restore the balance lost in the fine print of the USMCA.

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Application Denied: CRTC Rejects Bell Coalition Website Blocking Proposal

Michael Geist Law RSS Feed - Tue, 2018/10/02 - 11:11

The CRTC this morning rejected the Bell coalition’s website blocking proposal, concluding that the application to establish a new anti-piracy agency and approve site blocking without court oversight falls outside its jurisdiction. Opponents of the site blocking proposal frequently cited concerns with the proposal and the limits of the CRTC’s mandate: my posts discussed how it failed to further and undermined the Telecommunications Act policy objectives, and was inconsistent with the CRTC’s policy direction. Similar comments came from groups such as ISOC Canada, which argued that the applications involved copyright, not telecommunications.

Having reviewed thousands of submissions, the CRTC would appear to agree. The Bell coalition relied heavily on two provisions in the Telecommunications Act to support its application. First, it pointed to section 24 which gives the CRTC the right to impose conditions on service, but the CRTC concluded that including site blocking within that provision created conflicts with the Copyright Act:

the proposed regime requires sections 24 and 24.1 of the Telecommunications Act to be interpreted in a way that creates a direct purposive and contextual conflict with the Copyright Act. Moreover, such an interpretation of the jurisdiction granted to the Commission by the Telecommunications Act runs contrary to the principle of interpreting sections harmoniously with related legislation.

The other section – section 36 – restricts the ability of carriers to control the content of messages without CRTC approval. Yet the Commission rightly noted this is an authorizing power, not a mandated power:

Section 36 of the Telecommunications Act limits the ability of carriers to control the content of messages carried over their networks without prior Commission authorization. While this section gives the Commission the explicit power to authorize an ISP to block a website, the proposed regime would go further and require such blocking pursuant to a Commission order. Because section 36 confers an authorizing power and not a mandatory power, the power to mandate blocking must be found elsewhere and must relate to subject matter that is clearly within the Commission’s jurisdiction under the Telecommunications Act.

The commission also examined whether the proposal fit within the Telecommunications Act policy objectives, finding that it only does so in a very tangential way:

In the Commission’s view, the proposed regime can be said to target the policy objectives in only a tangential way, in the sense that they address a social or economic need. The Supreme Court’s findings with respect to the objectives in the Broadcasting Act are equally applicable to an interpretation of the policy objectives in the Telecommunications Act: “establishing any link, however tenuous, between a proposed regulation and a policy objective in s. 3 of the [Broadcasting] Act is [not] a sufficient test for conferring jurisdiction on the CRTC.

The policy objectives in the Telecommunications Act give the Commission extensive leeway to address social and economic needs broadly. For example, the Commission has addressed issues of public safety (e.g. through 9-1-1 and wireless public alerting regulation) and accessibility (e.g. through video relay service regulation). However, in the case of the proposed regime, which relates at its heart to the enforcement of the Copyright Act in the absence of a specific enforcement mechanism established by Parliament, any link to the policy objectives in the Telecommunications Act is tenuous, such that the Commission cannot support a finding of jurisdiction.

In light of all the above, the Commission determines that it does not have the jurisdiction under the Telecommunications Act to implement the proposed regime and, consequently, it will not consider the merits of implementing the regime. The Commission therefore denies the FairPlay Coalition’s application.

Instead of a ill-advised application to the CRTC, the Commission recommended that the issue be considered in two policy processes: the Copyright Act review and the broadcast-telecom review panel. Those are both better placed to assess the issue and address the myriad of concerns that Bell and its allies largely dismissed: the absence of court orders, implications for freedom of expression, net neutrality, privacy, and competition.

In fact, the issue did arise during Bell’s copyright review appearance last week before the Industry committee. After Bell asked for legislative reforms to make it easier to obtain orders requiring actions from intermediaries such as ISPs, MP David Graham asked whether Bell had tried to use existing rules to obtain a court order. Bell’s Robert Malcolmson avoided the question, citing legal actions involving set-top boxes instead [the correct answer is presumably no]. Moreover, when Graham also noted that a majority of countries with site blocking require a court order, Malcolmson responded by stating “there are a variety of regimes around the world.”

The CRTC’s denial of the site blocking application is an important step toward stopping a dangerous proposal, but Bell will surely continue to pursue its proposal in alternate venues. Interestingly, the USMCA does not include any reference to site blocking or seek to establish such a system. Thousands of Canadians stepped up in the spring to ensure that the Commission was aware of the legal, technical, and policy concerns with site blocking without a court order. In the months ahead, they may need to speak out yet again.

The post Application Denied: CRTC Rejects Bell Coalition Website Blocking Proposal appeared first on Michael Geist.

From Copyright Term to Super Bowl Commercials: Breaking Down the Digital NAFTA Deal

Michael Geist Law RSS Feed - Mon, 2018/10/01 - 07:59

Canada and the U.S. reached agreement late yesterday on a new NAFTA (now renamed the U.S.-Mexico-Canada Agreement or USMCA). While much of the focus is on the dairy industry, dispute resolution, and the auto sector, the agreement will have significant implications for intellectual property, digital policy, and broadcasting. It will take some time to examine all the provisions, but the short-hand version is that Canada has agreed to extend the term of copyright, saved the notice-and-notice system for copyright infringement claims, extended the term of protection for biologics at significant long-term cost to the health care, agreed that Internet companies are not liable for third party content, extended border measures on counterfeiting, and promised to drop the CRTC policy that permitted U.S. commercials to be aired during the Super Bowl broadcast.

With few exceptions, the U.S. adopted a Trans Pacific Partnership+ approach with the TPP provisions plus some additional changes it did not get as part of those negotiations. This is notable since Canadian authorities admitted that the TPP went far beyond any previous Canadian free trade agreement. While the Canadian starting point was presumably the CPTPP,  the revised TPP where Canada successfully argued for the suspension of some of the U.S.-backed provisions, Canada caved on that position as the IP and digital trade chapters largely revert back to the TPP model. The only good news from a Canadian perspective is that this includes a carve out for Canada’s notice-and-notice system, which the U.S. acknowledged in the TPP met the notice-and-takedown standard.

Copyright

The IP chapter opens with balancing language as an objective:

The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations. 

Yet the major copyright change for Canada is the extension in the term of copyright beyond the international standard of life of the author plus 50 years to life of the author plus 70 years. The term of copyright was never going to hold up a major trade agreement and Canada did agree to an extension in the original TPP. However, the cost will be significant, locking down works from the public domain for decades and potentially increasing educational costs by millions of dollars. From a domestic policy perspective, the change should impact the current copyright review as term extension has been one of the top requests from rights holders and areas of concern for users. The extension shifts the copyright balance in Canada and should be factored into future reforms, including the benefits of extending fair dealing to restore the balance.

One area that did not change is the notice-and-notice system as the IP chapter includes an annex (Annex to Section J) that creates an exemption to the notice-and-takedown requirement for any party that, as of the date of the agreement, has a notice-and-notice system. That means that Canada gets to keep notice-and-notice, though Mexico is not able to adopt it in lieu of notice-and-takedown. This will be viewed as a win from a Canadian perspective, though it was an easy giveaway for U.S. negotiators.

The agreement also includes provisions on limitations and exceptions (borrowing from the Berne Convention’s three-step test) and detailed anti-circumvention rules that permit exceptions in limited circumstances. These provisions are open to considerable interpretation that could be invoked as part of future copyright reform efforts.

The agreement also features expanded border measures and anti-counterfeiting requirements. Canada passed anti-counterfeiting legislation several years ago as part of a U.S. requirement for joining the TPP negotiations. That legislation expanded the powers of customs agents with respect to suspected counterfeit products. The U.S. had been pressuring Canada to further extend those provisions to cover in-transit shipments (ie. stop shipments that are not bound for Canada but only passing through on the way to another country). Canada has agreed to provide agents with those powers on in-transit shipments, thereby requiring further reforms to Canadian law.

Biologics

On the patent side, the big change is the extension of data protection for biologics drugs to 10 years. This is a significant increase on the TPP which offered 8 years or 5 years plus other measures to provide a comparable outcome in the market. This was one of the most contentious TPP issues as countries recognized that every additional year potentially adds billions of health care costs. In fact, even U.S. agencies have expressed doubt about the need for long term protections. Coming on the heels of the Canada – EU Trade deal, which effectively extended patent terms, the additional costs for pharmaceuticals in Canada in the long-term will be enormous.

Broadcasting

While a cultural exemption was touted as one of the major Canadian wins, Canada actually did cave to U.S. pressure by agreeing to change its broadcast policy. In 2016, the CRTC changed its policy on simultaneous substitution for the broadcast of the Super Bowl, allowing for the U.S. signal to air in Canada with the commercial intact. Bell, the broadcast rights holder, and the NFL objected with multiple appeals and court cases (including one currently before the Supreme Court of Canada). In Annex 15-D, Canada agreed to rescind the CRTC policy with a requirement that all programs be treated equally. That means that Canada could drop simultaneous substitution altogether, but not for an individual program. The same annex also includes a commitment to authorize U.S. home shopping program services.

Digital Trade

The digital trade chapter largely mirrors the one found in the TPP. That means that there are provisions on prohibiting customs duties, facilitating electronic transactions, anti-spam measures, and very weak language on having domestic privacy and consumer protection rules. The USMCA does not include a stand-alone net neutrality provision as found in the TPP.

The two most important features of the chapter involve (i) data localization and transfer and (ii) safe harbours for Internet companies. Data localization has emerged as an increasingly popular legal method for providing some additional assurances about the privacy protection for personal information. Although heavily criticized by those who fear that it harms the free flow of information, requirements that personal information be stored within the local jurisdiction is an unsurprising reaction to concerns about the lost privacy protections if the data is stored elsewhere. The USMCA restricts the ability for a country to impose data localization rules, which could have an impact on future privacy reforms. Similarly, the data transfer provisions limit the ability to restrict data transfers across borders, which could become a challenge should the EU require restrictions to meet its privacy standards. Canada effectively agreed to similar provisions in the TPP and their inclusion in this agreement is unsurprising.

Internet safe harbours did not make it into the TPP and is a welcome addition to the USMCA. The provision states:

no Party shall adopt or maintain measures that treat a supplier or user of an interactive computer service as an information content provider in determining liability for harms related to information stored, processed, transmitted, distributed, or made available by the service, except to the extent the supplier or user has, in whole or in part, created, or developed the information.

In other words, Internet companies are not liable for the content of their users. While this does not require the creation of a legislative safe harbour, it restricts the ability for a country to create a system premised on liability for Internet companies. Moreover, the same provision excludes liability for actions taken by Internet companies to remove harmful or objectionable content on a voluntary basis.

Cross-Border Shipments

The agreement also raises the minimum threshold for cross-border shipments that will not be subject to customs duties and taxes. The Canadian limit has long been at $20, much to the frustration of cross-border shoppers. The new limits for Canada will be C$150 for customs duties and C$40 for taxes.

There will no doubt be much more to review in the fine print of the agreement, but the first look at the deal suggests that Canada caved on many issues, identifying notice-and-notice as a priority ask. From a political perspective, since many of digital USMCA provisions were found in the TPP that was negotiated by the Conservative government, it is unlikely the Conservatives will oppose those concessions. The USMCA will result in significant reforms to Canadian copyright law, which should be factored into the current copyright review given the shift in copyright balance toward rights holders with decades of additional protections.

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Canadian Music Group Calls For Copyright Tax on Broadband Data Use

Michael Geist Law RSS Feed - Fri, 2018/09/28 - 09:10

The hearings into Canadian copyright have resumed at both the Industry and Canadian Heritage committees with witnesses making the case for a wide range of reforms. While Bryan Adams received the lion share of attention last week for his proposal to assist creators with quicker reversion of their rights, another proposal from the Screen Composers Guild of Canada (SCGC) deserves some scrutiny as an illustration of how many groups want new taxes or fees imposed on Internet services and technologies. I’ve written in the past about the music industry’s call for a tax on iPhones and other devices as well as its proposal for a $40 million per year taxpayer handout in until an iPhone tax can be implemented. This week the SCGC introduced a new proposal that would subject broadband data use to a copyright tax.

Members of the SCGC write the musical scores for films and television. They are paid for this work, but argue that the potential for additional public performance royalties have diminished as viewing has shifted to streaming services. Their proposed solution is establish a mandated copyright tax on all broadband data use in Canada. The group proposes that the first 15 GB of use should be tax free, suggesting that the free use will cover emails and other basic uses. For everything above that amount, the copyright tax on data would apply:

We envision a new “internet-light ISP service” that could form the exchange of revenue that we refer to as the SCGC Copyright Model (SCGC-CM). It would allow home internet users fifteen gigabytes of unlevied data per-month, enabling ample room for email, commerce and downloading, but beyond that, a copyright levy could be collected and re-mitted to a collective for distribution to copyright holders.

At committee, the group expanded on the argument:

An ISP subscription levy that would provide a minimum or provide a basic 15 gigabytes of data per Canadian household a month that would be unlevied. Lots of room for households to be able to do Internet transactions, business, share photos, download a few things, emails, no problem. But my own personal experience is that in my family, when you’re downloading and consuming over 15 gigabytes of data a month, you’re likely streaming Spotify. You’re likely streaming YouTube. You’re likely streaming Netflix. So we think because the FANG companies will not give us access to the numbers that they have, we have to apply a broad-based levy. They’re forcing us to.

The proposal is faulty on many grounds. First, increasing Internet costs will have undoubtedly have an impact on access, particularly for low-income Canadians. Second, the notion that use above 15 GB surely involves video or audio streaming misunderstands how many use the Internet today, whether for real-time gaming, online video discussions, software development, and a myriad of other activities. Third, the SCGC proposal would represent double-payment by consumers, who would pay to access the content on services such as Spotify and Netflix and pay for the transmission of the same content with the ill-advised copyright tax on broadband data.

The post Canadian Music Group Calls For Copyright Tax on Broadband Data Use appeared first on Michael Geist.

a different perspective

Fair Duty by Meera Nair - Mon, 2018/09/24 - 21:18

On 12 September 2018, the Edmonton Journal published an article of mine in print and online editions, where I emphasize the role of exceptions in the growth of billion-dollar media and content industries. Below is the original, longer form, of that article.

As the summer recess ends, Members of Parliament are returning to Ottawa to resume the business of the nation, including a review of the Copyright Act. Judging from transcripts of meetings held last spring, tensions run high among stakeholders. The general dispute is one of control versus legitimate unauthorized uses, education being a particularly thorny issue.

Transcripts of similar meetings from the 1980s, 1990s, and the 2000s, reveal that relations between educational institutions and copyright owners have always been strained. Institutions cite statutes that position copyright as a means of encouraging learning, while owners swear by the rights of the author. Both perspectives have roots in history. The Anglo-American common-law tradition placed the control of copyright, with measures of unauthorized use, as integral to developing publishing sectors. Whereas the civil-law tradition led by France argued that intellectual effort was nothing less than a living part of its creator and must be protected as such.

Yet both themes were relevant on both sides of the Atlantic. Differences were only a matter of timing. Nation-states eager to build their publishing sectors favored lesser control in the name of copyright. After creative assets were amassed, those same states offered holier-than-thou pronouncements about copyright. However, in neither tradition were authors, or students, central players in the various statutes.

Despite this, the figure of the starving author is the principal exhibit during any discussion of copyright. It appeared in 1710—when copyright attained a legal persona—and returned with each copyright expansion thereafter. If, 308 years later, authors are still starving, perhaps it is time to acknowledge that copyright alone cannot assure prosperity for an author. First and foremost, an author needs readers.

For Canadian authors, this challenge is not new. Even without competitors—beginning with Charles Dickens and continuing well past Harper Lee—Canada’s population was not enough to sustain Canadian authors. Even increasing the control exerted through copyright and holding students as a captive market cannot guarantee returns to Canadian authors. Particularly as foreign educational and research-oriented publications dominate the material read in post-secondary institutions.

As MPs wrestle with this review, they might consider a different perspective concerning the system of copyright—that it is not merely about what we read, view or listen to, but how we read, view and listen. Media development is enabled not by copyright, but by exceptions to copyright. Those uncontrolled spaces, where content is unprotected, allows new media to thrive, legitimately, to the benefit of a country’s economic and creative growth.

For instance, in the early twentieth-century, player pianos were in vogue. That success is directly attributable to a copyright law that did not protect music represented and conveyed through mechanical means. According to historian Harvey Roehl, in 1923 the player piano industry produced over 347,000 pianos and achieved over $100 million in sales. (In today’s American dollars, approximately $1.5 billion.) People feared that the technology would spell the death of music, but the new market for piano rolls spurred original composition. The leading player-piano manufacturers were eager to represent popular composers, selling not only their existing works, but also music composed expressly for piano-roll distribution (George Gershwin’s tale is legendary).

Another media technology worth remembering is the video cassette recorder. American film executives fought tooth-and-nail to have it killed; but in 1984, the United States’ Supreme Court ruled that the equipment was lawful. By the 1990s, the film industry was praising the new markets made available by the technology. Consumers were eager to pay for personal copies of favorite movies, which led to increased production of new films. Drawing from data compiled by the U.S. Department of Commerce and the U.S. International Trade Commission, in 1992 earnings via direct-sale to North American consumers reached $2.5 billion and in 1993 earnings from global markets were approximately $5 billion. All this out of a technology that Jack Valenti, then-president of the Motion Pictures Association of America, had likened to the Boston Strangler a decade earlier.

With respect to contemporary technology, MPs might find U.K. research to be helpful. In 2010, then-Prime Minister David Cameron ordered a review of their intellectual property law to enhance innovation and creativity in the digital age. In the ensuing report, the lead investigator Ian Hargreaves wrote: “Could it be true that laws designed more than three centuries ago with the express purpose of creating economic incentives for innovation by protecting creators’ rights are today obstructing innovation and economic growth? The short answer is: yes.” A year later, Hargreaves explained that Cameron had been particularly interested in the role exceptions had played in the development of search engines, namely Google.

This past summer, social media were buzzing in anticipation: would Google become the first trillion-dollar company? (Strictly speaking, it would have been Alphabet, parent company of Google, who could claim that title.) Apple emerged the winner; regardless, lawmakers should not forget that Alphabet exists because of Google and employs nearly 90,000 people worldwide. Of course, billion-dollar media industries with plentiful jobs do not arise solely from flexible exceptions within the system of copyright. But such industries could not arise without them.

Opponents of exceptions will criticize any amendment that appears to favour industries over authors. MPs might find strength of resolve through the work of Nick Mount, a professor of English at the University of Toronto, who is respected by authors and educators alike. In his landmark book, Arrival—the Story of CanLit, Mount illustrates that general economic prosperity enabled CanLit to reach the success we see today, and concludes by saying Canada “is producing many more writers and many more books than ever before.”

For those interested, further reading:

James Boyle (who served as an expert adviser for the British Review) on the Hargreaves Report: “Copyright is supposed to make, not to break, markets. Yet the Review found that innovative digital businesses were strangling in the tangled web of licensing copyright has created.  As technologies have developed, copyright has created right after right to deal with them, each jealously guarded by its own collection society. Pity the poor entrepreneur who wants to create a new legal business and finds that technological happenstance means multiple rights are involved. This is good for no one (except the middle-men.)”

Stephen Advokat, A new era for Hollywood, Chicago Tribune, 3 January 1986.

Fred von Lohmann, “Fair Use as Innovation Policy,” Berkeley Technology Law Journal (2008). “This article contends that copyright law’s historical tolerance for such copying as a fair use has served as an important element of both copyright and innovation policy. This is because, to the extent it permits private copying, fair use creates incentives for technology companies to build innovative new products that enable such copying. Far from being an unfair “subsidy” from copyright owners to technology innovators, this aspect of fair use has yielded complementary technologies that enhance the value of copyrighted works.”

The Internet is not an ATM: My Appearance at the Senate Transport and Communications Committee on Broadcast and Telecom Reform

Michael Geist Law RSS Feed - Fri, 2018/09/21 - 09:15

Earlier this week, I appeared before the Senate Standing Committee on Transportation and Communications alongside Carleton professor Dwayne Winseck to discuss broadcast and telecom reform. The Senate study, which largely mirrors the government’s broadcast and telecommunications reform panel, is expected to run into 2019 with a broad mandate that covers everything from affordable access to net neutrality. The discussion was similarly wide ranging with discussion on the failings of the CRTC, the lack of telecom competition, and on the need for real data in assessing the impact of the Internet on the cultural sector.

My opening statement focused on the danger of treating the Internet as equivalent to the broadcast system, the realities of how the Canadian cultural sector is succeeding online, and how policy makers ought to respond the changing landscape for communications in Canada. It is posted below.

Appearance before the Senate Standing Committee on Transport and Communications, September 18, 2018

Good morning. My name is Michael Geist.  I am a law professor at the University of Ottawa, where I hold the Canada Research Chair in Internet and E-commerce Law, and I am a member of the Centre for Law, Technology, and Society. My areas of speciality include digital policy, intellectual property, privacy and the Internet. I appear in a personal capacity representing only my own views.

This committee’s study places the spotlight on an exceptionally important question: as the Internet increasingly serves as the foundation for telecommunications, broadcasting, commerce, and culture, what reforms are needed to the current communications laws and regulations? As you no doubt know, this issue is also at the heart of a current broadcast-telecom review commissioned by ISED and Canadian Heritage. I think both efforts will be valuable and I hope that there are ways to ensure synergies between them.

My opening remarks will focus on three issues: the danger of treating the Internet as equivalent to the broadcast system, the realities of how the Canadian cultural sector is succeeding online, and how policy makers ought to respond the changing landscape for communications in Canada.

1.    The Danger of Treating the Internet as Equivalent to the Broadcast System

With the remarkable popularity of services such as Netflix and YouTube, there is a widely held view that the internet has largely replaced the conventional broadcast system. Industry data suggests the business of broadcasters and broadcast distributors such as cable and satellite companies won’t end anytime soon, but it is undeniable that a growing number of Canadians access broadcast content through the internet. Yet while it may be true that the broadcasting system is (or will soon be) the internet, the internet is not the broadcasting system. Indeed, any decision to treat the internet as indistinguishable from broadcast for regulatory purposes would send us down a deeply troubling path that is likely to result in less competition, increased consumer costs, and dubious regulation.

For example, the CRTC recently issued a report maintaining that internet access is “almost wholly driven by demand for audio and video content.” However, its own data contradicted that conclusion since it also noted that 75 per cent of wireless internet traffic is not audio or video. The reality is that internet use is about far more than streaming videos or listening to music. Those are obviously popular activities, but numerous studies point to the fact that they are not nearly as popular as communicating through messaging and social networks, electronic commerce, internet banking, or searching for news, weather, and other information.

Why is this important?

There are several significant problems with viewing the internet through the prism of a broadcasting system. Most notably, the approach leads to the view that if (a) we regulate broadcast and (b) broadcast is now the internet, then (c) we must now regulate the internet. However, given that the internet is much more than just broadcast, such efforts would by definition regulate far more than the broadcasting sector. This is not to say that there should be no Internet related regulation.  Of course there should. However, targeted regulation is not the same as regulating the Internet as if it were the broadcast system.

2.    The realities of how the Canadian cultural sector is succeeding online

Some of the impetus for communications law reform in Canada stems from concerns that existing regulations are failing to adequately support the Canadian cultural sector and that the Internet places its future at risk. Yet the data points to a very different reality, namely that much of the sector is experiencing unprecedented growth in the Internet era without the need for a regulatory overhaul.

For example, the days of worrying whether consumers would pay for music are largely over with the Canadian music market growing much faster than the world average, streaming revenues more than doubling in 2017, the Canadian digital share of revenues of 63 per cent exceeding the global average of 50 per cent, and Canada leaping past Australia to become the 6th largest music market in the world.

In fact, since the 2012 copyright reforms, music collective SOCAN’s Internet streaming revenues have grown more than tenfold. Last year it reached nearly $50 million annually. By comparison, in 2013, Internet streaming revenues were just over $3 million.

The success story is particularly notable with respect to film and television production in Canada. According to the latest data from the Canadian Media Producers Association, the total value of the Canadian film and television sector exceeded $8 billion last year, over a billion more than has been recorded in any year over the past decade. In fact, last year everything increased: Canadian television, Canadian feature film, foreign location and service production, and broadcaster in-house production.

Canadian content production hit an all-time high last year at $3.3 billion, rising by 16.1%. Notably, the increased expenditures do not come from broadcasters. In fact, the private broadcasters now contribute only 11% of the total financing for English-language television production. Their contribution is nearly half of what it was just three years ago in an industry that is growing. Yet despite the private broadcaster decline, money is pouring into the sector from distributors, who see benefits of global markets, and foreign financing, which has grown by almost $200 million in the past four years. It should be noted, however, that the sector remains heavily supported by the public, with federal and provincial tax credits now accounting for almost 30% of financing.
The increase in foreign investment in production in Canada is staggering. When Netflix began investing in original content in 2013, total foreign investment, including foreign location and service production, Canadian theatrical, and Canadian television. was $2.2 billion. That number has doubled in the last five years, now standing at nearly $4.7 billion. While much of that stems from foreign location and service production that supports thousands of jobs, foreign investment in Canadian television production has also almost doubled in the last five years, In sum, the data confirms that there has never been more money invested in film and television production in Canada and far from representing a threat, the digital environment has provided new opportunities for Canadians to thrive.

3.    What Next for Broadcasting and Telecommunications Legislation?

Given the risks of treating the Internet as the broadcasting system and the success of the cultural sector in Canada, what next for broadcasting and telecommunications legislation?

I’ll quickly point to five issues to consider. First, ensure affordable access for all. As the committee works through its study, it must keep in mind that all of these benefits of the Internet depend on all Canadians having affordable access. The imposition of new taxes or fees for Internet access will invariably mean that Canadians will pay more for those services. With a quarter of low income Canadians still without access – often due to affordability concerns – and Canada with some of the highest wireless prices in the world, imposing new costs would risk increasing the digital divide.

Second, maintain a level playing field through strong net neutrality rules. Existing rules have been interpreted to include net neutrality, but we would still benefit from an unequivocal legislative direction to support and enforce net neutrality. Some commentators have raised the possibility that Canadian cultural policy might benefit from zero rating Canadian content. In other words, rather than rely on net neutrality rules to ensure that Canadian content benefits from a level playing field, perhaps it would be even better to tilt the rules in favour of Cancon by mandating that domestic content not count against monthly data caps. Canadian content can compete with the best in the world and our regulatory rules should ensure a level playing field to allow it to complete fairly with content from around the world.

Third, Canadian broadcasting and telecommunications law must keep pace with the changing digital environment. Rules that grant the CRTC the power to determine which channels may operate in Canada should be repealed. Instead, the Commission should concentrate on consumer protection and marketplace competition. The consumer protection issues include regulations maintaining maximum consumer choice through pick-and-pay models, truth in advertising on communications services, and tough action against deceptive practices.

Fourth, we should reject new fees or taxes on Internet access and services. An Internet or ISP tax is largely premised on the argument that ISPs and Internet companies owe their revenues to the cultural content accessed by subscribers and they should therefore be required to contribute to the system much like broadcasters and broadcast distributors. As previously discussed, however, is that Internet use is about far more than streaming videos or listening to music. Governments can (and do) support the creation of Canadian content through grants, tax credits, and other subsidies, but foisting support on a monthly internet or wireless bill stretches the definition of the conventional broadcast system beyond recognition.

Fifth, we should reject calls for website or content blocking. Recent proposals  along those lines to the CRTC have been disproportionate, harmful, inconsistent with international standards, and violate Canadian norms. Indeed, website blocking would bring major costs and negative implications for freedom of expression, net neutrality, affordable and competitive consumer Internet access, and the balanced enforcement of intellectual property rights.

I look forward to your questions.

The post The Internet is not an ATM: My Appearance at the Senate Transport and Communications Committee on Broadcast and Telecom Reform appeared first on Michael Geist.

Cuts Like a Knife: Bryan Adams Calls for Stronger Protections Against One-Sided Record Label Contracts

Michael Geist Law RSS Feed - Thu, 2018/09/20 - 09:13

Canadian artist Bryan Adams placed copyright in the spotlight on Tuesday, appearing before the Canadian Heritage committee to make his case for copyright reform. Adams attracted widespread media coverage, though the big music industry groups such as Music Canada were conspicuously silent with not even a tweet to mark the appearance. Why the cold shoulder from the Canadian music industry to one of Canada’s best known artists? The obvious answer is that Adams sang from a far different songbook than the industry lobby groups. While those groups have been pushing for copyright term extension and a so-called “value gap” that bears little reality to Canadian law, Adams expressed artist frustration with the industry and one-sided contracts, noting that “I don’t even want to start naming the names of people who have had their copyright whisked from underneath their feet from contracts that they’ve signed as youngsters.”

His proposed reform stems from Section 14(1) of the Copyright Act, which provides for the reversion of copyrights to a creator’s heirs 25 years after their death. The provision is designed to address concerns that creators are often the weaker party when they enter into agreements with publishers or record labels. The reversion provision seeks to remedy the bargaining imbalance by reverting the rights many years later. As Adams pointed out, however, creators never experience the benefit of reversion since it applies decades after their death. Adams instead proposed that the reversion take effect 25 years after the copyright is first assigned to the company:

25 years is plenty of time for copyright to be exploited by an assignee. The second point was that an author or composer can see a further potential financial benefit of their work in their lifetime, and reinvest in new creation. It won’t happen by having reversion. It’s an incentive. This is the single and probably the most efficient subsidy to Canadian creators at no additional costs to the taxpayers at all.

Adams’ pitch opens the door to an important conversation on copyright policy in Canada. First, by calling for a shorter copyright term for reversion in contractual agreements, he reminded policy makers that extending the term of copyright for years after the creator has died does little for them. Indeed, the industry push for copyright term extension of up to 70 years after death does not create new incentives to create or give creators what they need today. If the government is consider amendments to copyright terms, it would do far better to examine shortening the term of copyright reversion as Adams suggests, rather than locking down the public domain by extending general copyright term in a manner that leaves creators with little value or incentive today.

Second, Adams’ concern is fundamentally about the unfair bargaining power that frequently exists between creators and music labels, publishers, or other corporate copyright interests. The reversion approach is one mechanism to address the copyright imbalance, though shortening the term raises its own set of concerns, including the likelihood that publishers and labels will look for other ways to generate revenues from the artists over a shorter period of time. My colleague Professor Jeremy de Beer has identified other mechanisms that could be used to strengthen the bargaining power of artists when confronted with one-sided deals from record labels and publishers.

Third, the problem with copyright and unfair contracts is not limited to one-sided deals with record labels. The interaction between copyright and contracts can create challenges in many areas, including efforts by publishers to limit fair dealing rights through contract, contractual limits on authors to use their own works as they see fit, and the use of contracts and digital locks to leave consumers with few rights when their digital purchases are rendered inaccessible.

There has long been a need to ensure that copyright policies are not overriden by unfair contracts, ideally through legislative amendment that restrict the ability to contract out of fundamental creator and user rights. With his high profile appearance before the Heritage Committee, Adams has provided an important reminder that copyright lobby groups do not speak for all creators and redirected the copyright conversation toward some of the copyright concerns that the industry has been reluctant to address.

The post Cuts Like a Knife: Bryan Adams Calls for Stronger Protections Against One-Sided Record Label Contracts appeared first on Michael Geist.

Supreme Court of Canada on Copyright Notices: Identification of IP Address “Not Conclusive of Guilt”

Michael Geist Law RSS Feed - Tue, 2018/09/18 - 09:15

The initial emphasis on last week’s Supreme Court of Canada’s copyright notice decision has focused on how Internet providers can pass along the specific costs associated with subscriber disclosures beyond those required for the notice-and-notice system to rights holders. The ruling rightly restores the notice system back to its intended approach, but it is not the only takeaway with implications for the recent flurry of file sharing lawsuits. While there has been a huge number of claims filed in Canada (with some surprisingly large settlements), the Supreme Court acknowledged important limitations in notice claims, noting that merely being associated with an IP address is not conclusive of guilt.

The full quote from the majority:

It must be borne in mind that being associated with an IP address that is the subject of a notice under s. 41.26(1)(a) is not conclusive of guilt.  As I have explained, the person to whom an IP address belonged at the time of an alleged infringement may not be the same person who has shared copyrighted content online. It is also possible that an error on the part of a copyright owner would result in the incorrect identification of an IP address as having been the source of online copyright infringement. Requiring an ISP to identify by name and physical address the person to whom the pertinent IP address belonged would, therefore, not only alter the balance which Parliament struck in legislating the notice and notice regime, but do so to the detriment of the privacy interests of persons, including innocent persons, receiving notice.

The passage is critically important since it lends support to many notice recipients who maintain that they have been misidentified or the notice has been sent in error. While some may feel that they have little alternative but to settle, the Supreme Court’s language sends a reminder that IP address alone may be insufficient evidence to support a claim of copyright infringement. Those that fight back against overly aggressive notices may find the claims dropped. Alternatively, contesting a claim would require copyright owners to tender more evidence than just an allegation supported by an identifiable IP address.

Moreover, the finding reinforces the need for the government to act by stopping the inclusion of settlement demands within copyright notices. The system was never intended to be used to send legal claims and pressure recipients to settle unproven infringement allegations. Indeed, with the court recognizing the privacy interests at stake and that an IP address alone is not conclusive of guilt, the decision increases the pressure on government to address the inappropriate conduct by rights holders who are using the system to pressure thousands of Canadians into paying hundreds of dollars despite the obvious limitations associated with their claims.

The post Supreme Court of Canada on Copyright Notices: Identification of IP Address “Not Conclusive of Guilt” appeared first on Michael Geist.

Notice the Difference?: Supreme Court Rules ISPs Can Be Compensated for Copyright Costs

Michael Geist Law RSS Feed - Mon, 2018/09/17 - 09:46

Policy makers have long struggled to strike a fair balance in crafting rules to address allegations of copyright infringement on the Internet. Copyright owners want to stop infringement and the right to pursue damages, Internet subscribers want their privacy and freedom of expression rights preserved in the face of unproven allegations, and Internet providers want to maintain their neutrality by resolving the disputes expeditiously and inexpensively.

My Globe and Mail op-ed notes that the Canadian system for online infringement was formally established in 2012 and came into effect in 2015. The so-called “notice-and-notice” approach grants rights holders the ability to send notifications of alleged infringement to Internet providers, who are required by law to forward the notices to the relevant subscriber and to preserve the data in the event of future legal action. The system does not prevent rights holders from pursuing additional legal remedies, but Internet providers cannot reveal the identity of their subscribers without a court order.

While the system has proven helpful in educating users on the boundaries of copyright, some rights holders have used it as a launching pad for further lawsuits. In fact, thousands of lawsuits have now been filed, with rights holders seeking to piggyback on the notice-and-notice system by obtaining the necessary subscriber information directly from Internet providers at no further cost.

The question of costs lies at the heart of an important Supreme Court of Canada copyright ruling released on Friday. Voltage Pictures sought subscriber information from Rogers Communications for the purposes of pursuing individual lawsuits. When Rogers advised that it wanted compensation of $100 per hour for the costs associated with fulfilling the request, Voltage responded that Internet providers could not pass along their costs since the notice-and-notice system already required them to identify subscribers and preserve the data without compensation.

The particular incident may have involved only a few hundred dollars, but the broader principle had the potential to dramatically alter the Canadian approach. If Internet providers were required to disclose subscriber information without passing along the costs, Canadian courts faced the prospect of an avalanche of lawsuits and Internet providers might be dissuaded from carefully ensuring that the privacy of their subscribers was properly protected.

The Supreme Court understood the broader implications of the case, ruling that Internet providers can pass along the specific costs associated with subscriber disclosures beyond those required for the notice-and-notice system. Indeed, the court recognized the importance of accurate data to safeguard against reputational harm and wrongful lawsuits.

While the ruling rightly restores the notice system back to its intended approach, there is still more work to be done to ensure that the balance the government sought to achieve between rights holders, subscribers, and Internet providers is maintained.

First, the Canadian approach recognizes that with great rights come great responsibilities for Internet providers. For these guardians of highly sensitive personal information, including the browsing habits, social contacts, and location data for millions of Canadians, disclosing subscriber information as part of a litigation process raises significant privacy issues.

The courts have determined that there may be situations where disclosure is appropriate, but doing so requires ensuring that the data is accurate and only revealed for specific, limited purposes. Friday’s ruling reinforces that Internet providers will be compensated for the costs associated with meeting those obligations. It now falls to them to ensure they exercise care and caution for any subscriber disclosures.

Second, the government must ensure that the notice-and-notice remains in place, despite considerable pressure from the United States to change it as part of the NAFTA renegotiations. The U.S. would like Canada to adopt its notice-and-takedown system, which encourages the removal of content online without a court review or order. But that approach that raises freedom of expression risks since it may raise instances of removing lawful content. The U.S. previously acknowledged during the Trans Pacific Partnership negotiations that the Canadian system provided an equivalent deterrent against online infringement. Despite renewed U.S. trade pressures, undoing the Canadian copyright balance should be taken off the table.

Third, assuming that notice-and-notice survives the NAFTA renegotiation, Innovation, Science and Economic Development Minister Navdeep Bains should follow through with a prior commitment to fix the loopholes in the Canadian approach. The system was designed to educate Canadians and avoid expensive litigation, but in the Rogers case, hundreds of thousands of notices that include settlement demands, and a steady stream of class action claims filed against individuals suggest that the system needs tinkering.

The government previously indicated that long-overdue changes prohibiting the inclusion of settlement demands in notices would be forthcoming. Now that the Supreme Court has settled the question of costs, it falls to the government to complete the job of addressing the shortcomings of a system designed to fairly balance the rights of all stakeholders.

The post Notice the Difference?: Supreme Court Rules ISPs Can Be Compensated for Copyright Costs appeared first on Michael Geist.

Compromising on Culture?: Why a Blanket Culture Exception in NAFTA is Unnecessary

Michael Geist Law RSS Feed - Thu, 2018/09/13 - 10:56

As the NAFTA negotiations continue to inch along, one of the remaining contentious issues is the inclusion of a full cultural exception that would largely exclude the Canadian culture industries from the ambit of the agreement. The government has not been shy about speaking out against compromising on culture, noting the perceived risks of provisions that might permit foreign ownership of media organizations. Indeed, the culture issue has attracted considerable attention, with coverage pointing to media ownership rules and simultaneous substitution policies as hot button concerns. Yet as cultural groups cheer on the government’s insistence that cultural policy should be taken off the NAFTA table, the reality is that there remains plenty of room for compromise. This post focuses on three of the biggest issues: foreign ownership, simultaneous substitution, and the TPP culture exceptions.

Foreign Ownership of Media Organizations

For Prime Minister Justin Trudeau, the worst case scenario is the prospect of U.S. networks taking over the Canadian market. Last week, he stated “it is inconceivable to any Canadian that an American network might buy Canadian media affiliates, whether it is a newspaper or television stations or TV networks.” Yet beyond the fact that Canadian networks often act as little more than U.S. affiliates by retransmitting their programs with Canadian commercials and that networks such as Fox News are already available on Canadian cable television packages, the fears associated with foreign ownership of broadcasters are largely overblown as the connection between Canadian broadcasting ownership and Canadian culture is tenuous at best. In fact, those arguing that foreign ownership imperils Canadian content and culture with lost regulation are often the same groups who maintain that foreign online video services such as Netflix should be fully regulated in Canada.

Canadian law currently features both foreign ownership restrictions and content requirements. The foreign ownership rules generally limit licensees to 20 percent foreign ownership (up to 33 percent for a holding company). This covers all types of broadcasters including television, radio, and broadcast distributors. Many observers appear to assume that Canadian ownership and content requirements go hand-in-hand, fearing that a foreign owned broadcaster would be less likely to comply with Canadian content requirements. Yet there is little reason to believe this to be so.

The Canadian Radio-television and Telecommunications Commission’s active involvement in setting Canadian content requirements is a direct result of Canadian-owned broadcasters regularly seeking to limit the amount of Canadian content they are required to broadcast. Producing original Canadian content is simply more expensive than licensing foreign (largely U.S.) content. These fiscal realities – and the regulations that have arisen as a response – remain true regardless of the nationality of the broadcaster.

Foreign owned businesses face Canadian-specific regulations all the time – provincial regulations, tax laws, environmental rules, or financial reporting – and there is little evidence that Canadian businesses are more likely to comply with the law than foreign operators.  
Cultural businesses may raise particular sensitivities, but broadcasters that are dependent upon licensing from a national regulator can ill-afford to put that licence at risk by violating its terms or national law.

In fact, a review of other developed countries reveals that many have eliminated foreign ownership restrictions in their broadcasting sector but retain local content requirements. For example, Australia has no foreign ownership restrictions on broadcasters (Canwest was once the majority owner of one of its television networks), yet employs a wide range of local content requirements. The same is true in many European countries – Germany has eliminated foreign ownership restrictions but retains daily regional programming requirements, Ireland has no foreign ownership restrictions but establishes programming requirements for each broadcast licensee, and the Czech Republic has dropped its foreign ownership restrictions but relies on broadcasting licences to mandate local programming.  In other words, opening the door to greater foreign ownership of media assets does not mean that Cancon regulations will be lost in the process.

Simultaneous Substitution

The issues associated with culture and NAFTA is not limited to foreign ownership. The U.S. has also oddly been arguing both for and against simultaneous substitution, arguing for it in the context of the Super Bowl broadcast and against it with respect to compensation for U.S. stations situated near the border. Canada is unlikely to change simultaneous substitution via a trade deal, but the policy is nevertheless steadily declining in importance.

The growth of specialty channels, which now represent a far bigger slice of the broadcasting revenue pie than conventional channels, heralded the decreasing importance of simultaneous substitution with fewer programs substituted and subscription revenue surpassing conventional television advertising revenue. Moreover, consumers gaining increasing control over what they watch and when they watch it contribute to its declining importance. Recording television shows or watching them on demand eliminates the simultaneous substitution issue. Sports leagues now package their seasons for full streaming and many watch streamed versions of shows directly from broadcasters or through services like Netflix, Amazon and CraveTV. With the arrival of even more streaming options – including U.S. broadcasters such as CBS – simultaneous substitution matters less and less every year.

Not only has the relevance of simultaneous substitution declined in recent years, but the policy has arguably harmed the long-term success of the Canadian system. It effectively trades some additional revenue for loss of control over the Canadian programming schedule and turns the Canadian system into a country-wide U.S. affiliate with hundreds of millions of dollars spent on the rights to non-Canadian programming. The CRTC recognized several years ago that eliminating simultaneous substitution altogether would still create a shock to the system. Limiting the elimination to the Super Bowl had the practical benefit of starting to move the industry off the addiction to U.S. programming and toward competition rather than regulatory protection. The Canadian policy will continue to evolve (including through the courts), but resolving the issue through NAFTA makes little sense since the U.S. is arguing both for and against the practice.

TPP Culture Provisions

While these issues have captured the headlines, the more obvious target for the U.S. are the provisions found in the TPP, which were sidelined by Canadian officials once the U.S. dropped out in side letters with the remaining TPP countries. The TPP provision stated:

Canada reserves the right to adopt or maintain any measure that affects cultural industries and that has the objective of supporting, directly or indirectly, the creation, development or accessibility of Canadian artistic expression or content, except:

a) discriminatory requirements on services suppliers or investors to make financial contributions for Canadian content development; and 

b) measures restricting the access to on-line foreign audiovisual content. 


In other words, the full culture exception was limited in two ways that could resurface as part of the NAFTA negotiations. Canada’s starting position is that it opposes any exceptions to a full cultural exception, but neither TPP exception were bad policy on their own (whether any of this belongs in a trade deal is open to debate, however).

The first – a ban on discriminatory requirements to support Cancon development – raises a legitimate concern about the possibility of mandated Cancon payments by foreign providers. While Canadian groups have actively lobbied to require foreign providers such as Netflix to make payments similar to those paid by Canadian broadcasters and broadcast distributors, they have been less supportive of Netflix benefiting from those Cancon funding mechanisms. Payment mandates without the same benefits would likely (and rightly) be viewed as discriminatory. The TPP would have blocked such an approach. The government maintains it opposes a Netflix tax. While there is a healthy debate about whether there should be mandated payments (I’ve written here about the uneven playing field that grants significant advantages to Canadians), asking for equal treatment should be a mandated payment system be established seems fair.

The second exception – a ban on instituting restrictions to foreign online video services such as Netflix – would be a non-starter in Canada. Given its commitment to net neutrality – the principle of treating all content and applications equally – the government is unlikely to require Internet providers to block access to foreign services. Yet in the name of the cultural exception, the Canadian government is arguing that it cannot even agree to a no-blocking mandate. Reversing on that issue – as with several others – would have no practical policy cost to Canada, would allow Canada to focus on other digital policy issues such as copyright term (which would have a far more significant impact on access to Canadian culture), and would not put Canadian culture or identity at risk.

The post Compromising on Culture?: Why a Blanket Culture Exception in NAFTA is Unnecessary appeared first on Michael Geist.

V.S. Naipaul and copyright

Fair Duty by Meera Nair - Wed, 2018/09/05 - 22:18

Following V.S. Naipaul’s death (1932-2018), I picked up his books again. They had been within reach throughout my life, yet I had never been too eager to read them. Naipaul’s views about India had not sat well; a seeming hostility heightened by an adoration of Britain. That Imperial overlords had sent his grandfather from India, to serve as an indentured labourer for estate owners in the West Indies, made it even more baffling.

Whereas my maternal grandfather, in joint opposition to both his caste-conscious family and British divine right claimants, had performed his own version of Quit India by moving to casteless Burma (Myanmar). He maintained a lifelong, faithful adherence to the Gandhian vision of an independent, secular India, one that aspired to equality for all, regardless of caste or gender. From that familial background, Nobel Prize notwithstanding, the sharpness of Naipaul’s pen was too alien for my tastes.

But the man was dead now, reading a book seemed the least I could do. A House for Mr. Biswas beckoned, a 1961 paperback edition brought out by Penguin Books. I glanced at the front matter, searching for that preliminary content which might influence how a reader approaches an author’s work.

In the words of literary theorist Gérard Genette, this is the realm of the paratext; that “vestibule,” where, before stepping inside the text, a reader is presented with information that might secure “a better reception for the text.” A paratext might include a preface (those guiding words in a detached voice), or the not-so-subtle extolling of past success (the lavish praise received in the wake of an author’s earlier works).

And then there are paratexts that carry a hue of legality.

Accustomed as I am to seeing maximalist copyright paratexts—those strident notices that, in violation of copyright law, prohibit any and all copying—this paratext was different:

Copyright © V.S. Naipaul
This book is sold subject to the condition that it shall not, by way of trade or otherwise, be lent, re-sold, hired out, or otherwise circulated without the publisher’s prior consent in any form of binding or cover other than that in which it is published and without a similar condition including this condition being imposed on the subsequent publisher (emphasis mine).

The reader was only urged to be aware that unauthorized books might be in circulation. Penguin Books likely hoped that readers would apply the market force necessary to keep rival publishers in line, but the reader is largely left alone.

Appealing to readers to maintain markets was not new, even in 1961.

Robert Spoo, an authority in both law and literature, has written extensively about courtesy paratexts, those notices used by nineteenth century American publishers to illustrate that their dealings with British books were with the consent of the British author. At that time, American copyright law did not extend to protecting foreign works; freely using British writing was a legitimate option, available to the entire American publishing industry. To manage the temptation of undercutting one another, to avoid a race-to-the-bottom in the pricing of reprints, larger American publishing houses agreed not to poach authors’ works, once a particular house had secured the author’s consent.

Consent was usually obtained with a courtesy payment from the American publisher to the British copyright-owner. While British authors and publishers fumed at their lack of control in this system, a Royal Commission on copyright carried out by the British Government (1876-1878) confirmed that many British authors and publishers profited handsomely through these arrangements (though at Canada’s expense, i.e., see here or here.)

However, these gentlemen’s agreements were not always respected, particularly when the writer was popular with American readers. A few words from the author could confer some respectability upon the publisher in the eyes of the market, and increase the likelihood of holding that market. Within Spoo’s work are examples, exhibiting a range of tone from the humble words of Robert Browning to the distinctly legal’esque language of Charles Dickens.

Returning to the Naipaul collection, a paperback copy of India, A Million Mutinies Now (a Minerva edition dating to 1990), reveals the same paratext as found in Mr. Biswas. However, a Viking Penguin hardcover offering of the same book, of the same year, extolls this:

Copyright © V.S. Naipaul, 1990
Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form, or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the above publisher of this book.

It is bizarre even to suggest that the lengthy prohibition of reproduction etc., could limit the rights under copyright—given that the notice exceeds what copyright provides under law.

But this nonsensical statement makes some sense if it is read, not as prohibition to readers, but as a warning to would-be pirate publishers. The notice tells prospective resellers that the road to Million Mutinies must go through not only Viking, but Naipaul as well. From that, a reader could assume that Naipaul did not hand over all the meaningful aspects of copyright (control over reproduction etc.) to Viking.

Continuing my Naipaulian-guided exploration of copyright-paratexts; a 2011 edition of A Way in the World  (issued by Picador), begins by scrupulously noting that the book was published in 1994 by William Heinemann, in 1995 by Minerva, and then in 2001 by Vintage (Random House). It ends with the prohibition on circulation in any other form of binding or cover.

In between, the author surfaces; Naipaul’s claim of copyright for the book in 1994, and in the preface in 2011, are explicit. Curiously though, while claiming copyright required no justification, claiming authorship did: “The right of V.S. Naipaul to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988.”

The remainder of the copyright-paratext takes on a biblical tone of crime and punishment:

All rights reserved. No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form, or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the above publisher of this book. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages.

The overreach on the scope of copyright is astounding. Limitations/exceptions to copyright are always an option. So said Canada’s former Chief Justice Beverley Mclachlin in 2004: “Fair dealing is always available.”

All copyright statutes of countries participating in international treaties, will have sanctioned some degree of unauthorized use of copyrighted work. The Marrakesh Treaty (created in 2013 to support perceptually disabled people) comes to mind, but even the Berne Convention (created in 1886 ostensibly to better support authors) does not omit unauthorized uses.

Even without international prodding, countries may amend their exceptions to ensure that a system purporting to support authors has the capacity to fulfill that expectation. Canada’s best adjustment may well be S29.21.

In terms of the criminality of unauthorized use, in Canada such remedies generally pertain to commercial malfeasance; i.e., sale of the work without consent. Arguably, this paratext speaks only in terms of “may be liable” but in the hypersensitive copyright-age we live in, such a notice is enough to scare off any teacher or student from exercising fair dealing. I wonder if authors are aware of the misrepresentation of the law that is presented in their names.

Furthermore, how often do authors retain their copyright? How often do they retain it in more than name only? Does having a copyright actually translate into royalties when books are sold? What happens when books fall out of print; do the rights revert to the author? Are authors (and their estates) aware of explicit statutory provisions for reversion of rights? (Rebecca Giblin’s work, particularly the Authors Interest Project, probes these questions.)

Naipaul seemed to be aware of the importance of copyright; from his earliest publications (by André Deutsch Limited) on, Naipaul consistently declared his copyright and renewed it as necessary. That command of copyright continued even where he was not the sole author. The copyright paratext in the published correspondence between Naipaul and his family, entitled Letters Between a Father and a Son (Little, Brown and Company, 1999), tells a story of its own:

Copyright © V. S. Naipaul 1999
The moral right of the author has been asserted.

The moral right of the author is startling to say the least. There are five authors in this collection: Naipaul, his sister Kamla, their father and mother–Seepersad Naipaul and Droapatie Capildeo–and Gillon Aitken (editor of the collection and author of the introduction). Granted, V.S. Naipaul’s letters form the majority of the book, and his parents were dead at the time of publication. However, all authors ought to have been entitled to recognition and reservation of rights with respect to their own original work.

Perhaps these matters were discussed, explained, and executed with consent from the living parties.

Back to Mr. Biswas.

Is Copyright Term Extension Still in Play in the New NAFTA?

Michael Geist Law RSS Feed - Tue, 2018/09/04 - 14:16

As Canadian NAFTA negotiations continue in the aftermath of a U.S.-Mexico agreement on a trade deal, the inclusion of a mandated copyright term remains a bit of mystery. The U.S. has long been focused on getting Canada to extend the term of copyright beyond the international treaty standard of life of the author plus 50 years and seems likely to want to do so here. If so, the cost will be significant, locking down works from the public domain for decades and potentially increasing educational costs by millions of dollars. The U.S. fact sheets on the deal have undergone regular changes which suggests that the issue may still be in play. The original fact sheet issued last week described the copyright term provision as follows:

Extend the minimum copyright term to 75 years for works like song performances and ensure that works such as digital music, movies, and books can be protected through current technologies such as technological protection measures and rights management information.

The provision appeared to involve works-for-hire or song performances, but not a full copyright term extension beyond the international treaty standard. Two days later, the U.S. issued an updated fact sheet that included a full copyright term extension:

Set a minimum standard of 75 years of copyright term for sound recordings and other works calculated by date of publication, and life plus 70 years for works calculated based on the life of the author.

While that description remained online for several days, it disappeared over the weekend. The current version goes back to the original fact sheet with no reference to a general copyright term extension. The back-and-forth suggests that the issue may still be at play as the Canadian negotiations continue with Canada rightly opposing term extension in the updated agreement.

The post Is Copyright Term Extension Still in Play in the New NAFTA? appeared first on Michael Geist.

Crunch Time in the NAFTA Negotiations: What’s at Play for Canada on Digital Policy

Michael Geist Law RSS Feed - Thu, 2018/08/30 - 09:10

As the NAFTA negotiations hit a possible home stretch this week, the focal point has been primarily on issues such as dispute resolution, the dairy sector, and the auto industry. However, the digital policy issues will have huge implications for Canada and the outline of the agreement between the U.S. and Mexico suggests that Canada is facing considerable pressure to agree to changes to our copyright, patent, IP enforcement, and digital policy rules, contrary to our preferred negotiation approach.

The U.S. appears to be pushing for a TPP+ approach – the TPP provisions plus some additional changes it did not get as part of those negotiations. This is notable since Canadian authorities admitted that the TPP went far beyond any previous Canadian free trade agreement. The Canadian starting point is presumably the CPTPP,  the revised TPP where Canada successfully argued for the suspension of some of the U.S.-backed provisions. This post outlines five of the biggest issues that are likely at play, though many others such as de minimis rules for shipments that affect online commerce will be closely watched and could ultimately require future reforms.

1.    Copyright term

The outline of the U.S.-Mexico agreement indicates that copyright term was included in the deal, but its scope remains a bit of a mystery. The outline states:

Extend the minimum copyright term to 75 years for works like song performances and ensure that works such as digital music, movies, and books can be protected through current technologies such as technological protection measures and rights management information.

That does not sound like a full copyright term extension beyond the international treaty standard of life of the author plus 50 years. The TPP included a life plus 70 years requirement and both the U.S. and Mexico meet or exceed that number. Canada remains at life plus 50. The U.S.-Mexico agreement may involve works-for-hire or song performances. Regardless, the U.S. has long been focused on pressuring Canada to extend the term of copyright and seems likely to want to do so here. If so, the cost will be significant, locking down works from the public domain for decades and potentially increasing educational costs by millions of dollars.

2.    Notice-and-Takedown for ISPs

The U.S.-Mexico agreement outline references a requirement for a notice-and-takedown system consistent with U.S. law:

Establish a notice-and-takedown system for copyright safe harbors for Internet service providers (ISPs) that provides protection for IP and predictability for legitimate technology enterprises who do not directly benefit from the infringement, consistent with United States law.

There was a similar requirement in the TPP, but that agreement included an acknowledgement that Canada’s notice-and-notice system met that standard. Canada will presumably argue that the same approach should apply, though these negotiations give the U.S. the opportunity to revisit that concession.

3.    Biologics Protections

The U.S.-Mexico agreement outline references a requirement for ten years of data protection for biologics drugs:

Includes 10 years of data protection for biologic drugs and expanded scope of products eligible for protection

This is a significant increase on the TPP which offered 8 years or 5 years plus other measures to provide a comparable outcome in the market. This was one of the most contentious TPP issues as countries recognized that every additional year potentially adds billions of health care costs. In fact, even U.S. agencies have expressed doubt about the need for long term protections. Coming on the heels of the Canada – EU Trade deal, which effectively extended patent terms through restoration, the additional costs for pharmaceuticals in Canada would be enormous to a country that already has some of the highest prices in the world.

4.    Anti-Counterfeiting Border Measures

The U.S.-Mexico agreement outline references strong border measures against counterfeiting as a key achievement, including:

Enforcement authorities must be able to stop goods that are suspected of being pirated or counterfeited at all areas of entry and exit.

Canada passed anti-counterfeiting legislation several years ago as part of a U.S. requirement for joining the TPP negotiations. That legislation expanded the powers of customs agents with respect to suspected counterfeit products. The U.S. has been pressuring Canada to further extend those provisions to cover in-transit shipments (ie. stop shipments that are not bound for Canada but only passing through on the way to another country) and will presumably interpret this provision as requiring changes to Canadian law.

5.    Digital Trade Chapter

The digital trade chapter in the new NAFTA appears to be very similar to the one found in the TPP.  The outline states:

The new Digital Trade chapter will:
•    Prohibit customs duties and other discriminatory measures from being applied to digital products distributed electronically (e-books, videos, music, software, games, etc.).
•    Ensure that data can be transferred cross-border, and that limits on where data can be stored and processed are minimized, thereby enhancing and protecting the global digital ecosystem.
•    Ensure that suppliers are not restricted in their use of electronic authentication or electronic signatures, thereby facilitating digital transactions.
•    Guarantee that enforceable consumer protections, including for privacy and unsolicited communications apply to the digital marketplace.
•    Limit governments’ ability to require disclosure of proprietary computer source code and algorithms, to better protect the competitiveness of digital suppliers.
•    Promote collaboration in tackling cybersecurity challenges while seeking to promote industry best practices to keep networks and services secure.
•    Promote open access to government-generated public data, to enhance innovative use in commercial applications and services.
•    Limit the civil liability of Internet platforms for third-party content that such platforms host or process, outside of the realm intellectual property enforcement, thereby enhancing the economic viability of these engines of growth that depend on user interaction and user content.

While several of these provisions are easily met by Canada – privacy, anti-spam rules, electronic signatures, cybersecurity, government open access among them – this chapter will still raise several issues. First, the good news is that there is a provision for safe harbours for Internet platform liability, a key missing issue from Canada’s Internet law framework. This will create important Internet speech safeguards without which Canada has been at a competitive disadvantage.

Second, the data transfer and localization rules will raise concerns, particularly if they limit the applicability of Canadian policies such as privacy protection. The inclusion of the provision is unsurprising, but the detailed language will matter.

Third, prohibition on “other discriminatory measures” on digital products distributed electronically goes to the heart of the cultural exemption Canada obtained in the CPTPP. The U.S. has pushed for a broad provision (for example, no discriminatory limitations on foreign online video services) and appears to have obtained one with its agreement with Mexico.

The post Crunch Time in the NAFTA Negotiations: What’s at Play for Canada on Digital Policy appeared first on Michael Geist.

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