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Universities should educate, not police copyright

Sara Bannerman - 8 hours 51 min ago
My op-ed on why universities should focus on educating faculty and students about copyright rather than online copyright enforcement is available on The Conversation here and in various other publications.

The NAFTA E-commerce Chapter: Ensuring the New Chapter Reflects Canadian Priorities

Michael Geist Law RSS Feed - Thu, 2017/08/17 - 09:56

Canadian Foreign Minister Chrystia Freeland outlined Canada’s NAFTA negotiating objectives in talk earlier this week, identifying the need to modernize NAFTA so that “all sectors of our economy can reap the full benefits of the digital revolution.” I posted yesterday on how the IP chapter could be used to level the playing field for innovation. This post discusses how the new e-commerce chapter, which will be the most obvious manifestation of a modernized NAFTA, offers the opportunity to address an increasingly important aspect of modern cross-border commercial activity.

The policy behind an e-commerce chapter should be to facilitate modern, electronic commerce. Canada should be wary of provisions that undermine legitimate public policy interest, including privacy and security. This concern is particularly pronounced with respect to restrictions on data localization and data transfers, both identified by the USTR as issues of concern. Further, Canada should seek higher level privacy protections and e-commerce regulations in NAFTA.

The Implications of NAFTA for Privacy and Security

The U.S. has identified restrictions against local data storage – often called data localization – as one of its objectives. The issue originates from Silicon Valley tech company frustration with a growing number of governments that want local data to remain within their jurisdiction. The reason for data localization requirements typically stem from mounting concerns over U.S. surveillance activities and the power granted to U.S. law enforcement under laws such as the USA Patriot Act.

The combined effect of these U.S. laws is that many users fear that once their information is stored in the U.S., it will be accessible to U.S. authorities without suitable privacy protections or oversight. Since U.S. law provides less privacy protection to foreigners, there is indeed limited legal recourse for Canadian data held in the U.S.  Provinces such as British Columbia and Nova Scotia have enacted laws to keep government information (such as health data) within the country.

In response to the mounting public concerns, leading technology companies such as Microsoft, Amazon, and Google have established or committed to establish Canadian-based computer server facilities that can offer localization of information. These moves follow on the federal government’s 2016 cloud computing strategy that prioritizes privacy and security concerns by mandating that certain data be stored in Canada. The Canadian government should resist efforts within NAFTA to limit the ability of federal or provincial governments to establish legitimate privacy and security safeguards through data localization requirements.

Limitations on data transfer restrictions, which mandate the free flow of information on networks across borders, raises similar concerns. Those rules are important to preserve online freedoms in countries that have a history of cracking down on Internet speech, but in the Canadian context, could restrict the ability to establish privacy safeguards. In fact, should the European Union mandate data transfer restrictions as many experts expect, Canada could find itself between a proverbial privacy rock and a hard place, with the EU requiring restrictions and NAFTA prohibiting them. While the U.S. is seeking a ban on data transfer restrictions, Canada should ensure that privacy and security laws will not be superseded by NAFTA restrictions.

Using NAFTA To Safeguard Privacy Protections

Privacy protections are a key aspect of e-commerce, providing consumers with assurances that their personal information will be appropriately safeguarded. A renegotiated NAFTA should include a high level privacy protection requirement. The starting point for privacy protection in most countries is a national privacy law modeled on the OECD privacy principles. Enforcement measures are frequently handled by privacy or data protection commissioners with some form of enforcement powers as well as additional rules on issues such as mandatory disclosure of security breaches. A privacy requirement that extends beyond voluntary undertakings is essential for Canadians to have the necessary assurances that their information is properly protected and to place Canadian companies on a level playing field with their NAFTA counterparts.

NAFTA should also include mandatory anti-spam legislation as a national requirement. The provisions could specify that the law provide for a binding unsubscribe mechanism and an opt-in consent requirement, consistent with the Canadian anti-spam law. Other e-commerce laws, including consumer protection requirements and electronic contracting provisions, would be suitable for inclusion in an e-commerce chapter.

The post The NAFTA E-commerce Chapter: Ensuring the New Chapter Reflects Canadian Priorities appeared first on Michael Geist.

How Canada Can Use NAFTA’s IP Chapter to Level the Innovation Playing Field

Michael Geist Law RSS Feed - Wed, 2017/08/16 - 09:44

The NAFTA renegotiation gets underway today, days after Canadian Foreign Minister Chrystia Freeland outlined Canada’s NAFTA negotiating objectives. As her first core objective, Freeland identified modernizing NAFTA so that “all sectors of our economy can reap the full benefits of the digital revolution.” Those comments suggest that the IP chapter and a new e-commerce chapter will be top negotiating priorities. I’ll post on the e-commerce chapter tomorrow, but this post highlights my recent CIGI essay on how Canada can use the NAFTA intellectual property chapter to help level the innovation playing field.

While Canada is accustomed to “playing defence” to U.S. IP demands, this round of renegotiation offers the chance to pro-actively ensure that Canadian IP priorities and policies are reflected in the agreement. To place the IP issue in context, over the past five years, Canada has added anti-circumvention laws similar to those found in the U.S., added stronger enforcement measures (including the “enabler” provision for websites that facilitate infringement), enacted anti-counterfeiting laws, extended the term of protection for sound recordings, and engaged in patent and trademark reforms. When added to earlier reforms such as anti-camcording rules and recent court decisions that addressed U.S. concerns about Canadian patent rules, Canada has acquiesced to many IP policy demands from the U.S.

As Canada embarks on a new round of NAFTA talks, it should be recognized that Canada already meets its international IP obligations and has largely addressed previous U.S. demands regarding further reforms. At a broad level, the Canadian negotiating goal should be to retain an appropriate IP balance that fosters creativity and access, while ensuring that there is room for Canadian-specific policies that sit within the flexibilities of the international IP framework.

The full CIGI piece identifies five opportunities: inclusion of balance as an IP objective, a fair use provision, anti-circumvention legislation exceptions, rules on IP abuse and misuse, and rejection of U.S. efforts to extend the term of copyright.

The post How Canada Can Use NAFTA’s IP Chapter to Level the Innovation Playing Field appeared first on Michael Geist.

Good Politics, Bad Policy: Melanie Joly Sends TV Licensing Cancon Decision Back to the CRTC

Michael Geist Law RSS Feed - Tue, 2017/08/15 - 09:56

Canadian Heritage Minister Melanie Joly announced via Twitter yesterday that the government has asked the CRTC to reconsider its TV licensing decision from earlier this year that established a uniform broadcaster spending requirement of 5 percent on programs of national interest (PNI, which includes dramas, documentaries, some children’s programming, and some award shows). The decision, which would lead to a reduction of mandated spending for some broadcasters, sparked a strong lobbying campaign from various cultural groups who claimed the decision would result in hundreds of millions in reduced spending on Canadian content. While the government’s decision should not come as a surprise – siding with the creator groups against the CRTC makes political sense – no one should confuse it with good policy. Indeed, the reality is that the CRTC’s belief that the digital market would create the right incentives for investment is increasingly borne out by recent developments that suggest Canadian broadcasters have few alternatives other than to develop their own original programming.

Reports of the decision have emphasized that CRTC broadcast rulings are rarely sent back by the government for reconsideration, but this particular case was a political no-brainer. The creator groups mobilized effectively and faced practically no opposition. The public had little reason to engage on an insider issue, the broadcasters offered only a tepid response months after the momentum for a reconsideration had been established (Bell, Canada’s largest broadcaster, presumably preferred to use its political capital on the Super Bowl simsub issue), and the CRTC changed chairs weeks after the decision was released making it unlikely the Commission would publicly or privately defend the ruling as the campaign against it unfolded.

Moreover, Joly needed a policy win for the cultural groups. Her digital Cancon policy is set to be unveiled next month and many of the groups applauding this ruling (Joly’s twitter feed is filled with dozens of such tweets) may be left disappointed. Joly launched the digital Cancon consultation in 2016 with talk of an export-led, digitally-relevant policy.  That was the right vision, but she quickly found that many established creator groups were more interested in Netflix taxes, ISP taxes, and digital sales taxes. The government has largely taken those proposals off-the-table (a digital sales tax remains a possibility but revenues would go to Finance, not Heritage), meaning the strategy will likely emphasize promotion, cultural exports, administrative improvements, and long-term legislative reform of communications and copyright. That’s a reasonable formula (short term copyright reform will focus on the Copyright Board, which helps ensure that creators get paid), but it isn’t quite what some groups have in mind.

While the decision to refer the ruling back to the CRTC might make for good politics, it does little to address the issue of the creation and competitiveness of Canadian content in a digital world. As I noted earlier this year, industry data confirms that private broadcasters are relatively minor players when it comes to the financing of Canadian drama. The most recent CMPA report states:

With fiction productions, the largest share of financing came from provincial and federal tax credits; the fiction genre also attracted the most foreign financing among all genres. Children’s and youth productions also derived the largest share of their financing from tax credits, followed by broadcaster licence fees. Distributors also accounted for an important part of the financing picture for the fiction, and children’s and youth genres. In the VAPA and lifestyle and human interest genres, most financing came from broadcaster licence fees.

Indeed, private broadcasters contribute only 9 percent of the financing for fictional programs, less than federal and provincial tax credits, Canadian distributors, foreign financing, and the CMF.  Private broadcasters allocate much of their money toward variety and performing arts as well as “lifestyle and human interest” programming, which including magazine style shows. In other words, financing and the success or failure of Canadian programming such as dramas do not depend upon private broadcaster spending, regardless of where the CRTC sets the mandated percentage.

Moreover, recent events highlight why this is a fight over yesterday’s broadcasting world. The upcoming entry of new streaming services from U.S. giants such as CBS and Disney will continue to reshape the Canadian broadcasting landscape as U.S. content increasingly streams directly to Canadian viewers. Canadian broadcasters may still license those programs since they need to fill their schedules, but the programming will be available on a non-exclusive basis, giving consumers the real choice they have long been denied. The changes are not limited to dramatic programming as the sports world is also undergoing a massive transformation. For example, the exclusive rights to NFL Sunday Ticket now rests with DAZN, which is only available via Internet streaming. The Canadian cable and satellite companies will lose millions in revenue, while consumers can purchase the service for less than half of what they previously paid.

Fighting over mandated Cancon spending does little to address the emerging broadcast world in which consumers have far more choice and are no longer locked into the regulated broadcast system. The CRTC decision was developed with this future in mind as the changes were primarily designed to level the playing field for Canadian broadcasters in a market where success is determined by controlling original content. The CRTC ruling hoped to make it easier for Canadian broadcasters to compete with Netflix and the many other streaming services that operate without mandated content requirements.

The shift away from mandated spending is not a shift away from investment in Cancon, however. Netflix spends millions on production in Canada not because it faces a regulatory requirement (it doesn’t), but rather because the entire package – innovative creators, tax credits, good partners – offers a compelling reason for doing so. Indeed, the data shows that the Canadian industry has thrived in recent years for reasons that have little to do with pre-digital regulations with a huge shift in Canadian television production from domestic funding to foreign investment.

For Canadian broadcasters, the battle over mandated spending is premised on the notion that they will only invest in domestic programming if required to do so. Licensing cheaper foreign programming is understandably attractive, yet as that programming becomes available from multiple sources, the benefits of relying heavily on licensed U.S. content will diminish (and older regulatory rules such as simultaneous substitution will become less and less relevant). That means the long-term success of Canadian broadcasters will depend upon controlling original content that can be delivered through multiple channels and markets. Policy fights over mandated spending therefore miss the point. The market now encourages investment in original programming and it is up to Canadian creators and broadcasters to compete in a global market that offers new opportunities without the security blanket of outdated regulations that once typified the Canadian system.

The post Good Politics, Bad Policy: Melanie Joly Sends TV Licensing Cancon Decision Back to the CRTC appeared first on Michael Geist.

Canadian Government Puts Copyright Board Overhaul on Fast Track With Consultation Launching Tomorrow

Michael Geist Law RSS Feed - Tue, 2017/08/08 - 14:25

The Canadian government is planning the most significant changes to the Copyright Board of Canada in decades with a consultation set to officially launch tomorrow. Given the longstanding concerns with the Board from creators and users alike, the government has decided to place board reform on a fast track that is separate from the broader copyright review scheduled to commence later this year. The consultation, which will outline potential reforms to address delays and case backlogs, will run until late September. Navdeep Bains, the Minister of Innovation, Science and Economic Development, working with Canadian Heritage, hopes to introduce a Copyright Board reform legislative and regulatory package in early 2018.

I spoke earlier today to Bains, who explained that the government believes there needs to be quicker decisions, greater transparency, and an effort to address the current backlog given concerns about ensuring creators are paid and in bringing new innovative service to the Canadian market. The consultation, being held jointly by ISED, Canadian Heritage and the Board, will identify several potential measures to address the board delays including case management processes, establishing new case deadlines, streamlining cases before the board, as well as giving the board more power to advance proceedings, award costs, and limit the ability for parties to delay proceedings.

Bains also believes that increasing the speed of the process could be helped by reducing the number of matters the board hears. One of the most controversial proposals will likely be the possibility of enabling all collectives to enter into voluntary licensing agreements with users. The emphasis on voluntary private agreements would represent a significant shift that could impact the public interest role of the board and might require new oversight from both the board and the Commissioner of Competition as well as mandated public disclosure of private agreements. Moreover, the government is considering extending the timelines of tariffs to reduce the frequency of tariff renewals as well as measures to reduce the uncertainty that comes from retroactive application of tariffs. That might require collectives to file tariffs longer in advance thereby giving the board more time to make a determination before the effective date of the tariff.

The consultation will also raise the prospect of requiring collectives to provide more information about proposed tariffs. This could include:

  • the reasons for filing the proposed tariffs at the particular times they are filed
  • the practical uses or activities that are targeted
  • the types of users known to the collective society that are targeted
  • the proposed royalty rate and its related terms and conditions specific to each use or activity targeted
  • the grounds on which the proposed royalty rates, terms and conditions and effective periods have been determined
  • how the proposed tariffs substantially differ from any previously certified tariffs that the proposed tariffs are sought to renew
  • how the proposed tariffs relate to other certified tariffs, if any
  • how information reported by users pursuant to the proposed tariffs will be used.

Objectors could also be asked to provide additional information about their reasons for objection.

In addition to technical reforms to the board, the government wants to address ongoing transparency concerns. This could include codifying board procedures, making public the criteria considered by the board, and establishing a clear board mandate. The government is also open to new measures to increase public participation in board proceedings to restore confidence and may consider harmonizing the tariff-setting regimes in the Copyright Act. Funding issues or the size of the board are not addressed. Further, changes to the governance of collecting societies is being treated as beyond the scope of the consultation.

The decision to place Copyright Board reform on the fast track raises obvious questions about how it fits within the broader copyright review and innovation agenda. Bains confirmed that the government wants to move more quickly on the board issue than the broader review that will formally begin later this year. He noted that the government wants a “thoughtful, engaged and informed” copyright review that will likely take far longer than the Copyright Board process with a very different timeline. The government is open to addressing other copyright issues, including the ongoing abuses with the notice-and-notice system for Internet providers, in a more timely manner. Bains also acknowledged that there are definite linkages “between the changes and reforms in the Copyright Act, even including the Copyright Board process, which dovetails with the work [the government] is doing on innovation and skills development.”

Given that the issue has been simmering for years, the willingness to reform the board should enjoy general stakeholder support. The broader review of the Copyright Act will likely be far more contentious and wide ranging, with timelines that will require months of hearings to ensure that all stakeholders are given an opportunity to share their views. For now, the government is sending the signal that it recognizes the importance of copyright administration as it embarks on a long-overdue overhaul of the process and transparency of the Copyright Board of Canada.

The post Canadian Government Puts Copyright Board Overhaul on Fast Track With Consultation Launching Tomorrow appeared first on Michael Geist.

The Diminishing Value of Simsub: CBS Streaming Service Coming to Canada Next Year

Michael Geist Law RSS Feed - Tue, 2017/08/08 - 09:28

CBS, one of the major U.S. networks, announced yesterday that it plans to take its All Access video streaming service global starting with the Canadian market next year.  The move will increase consumer choice and once Hulu follows suit (which it eventually will), all the major U.S. broadcasters will be streaming directly to Canadians. Assuming broadcasters such as CBS begin to retain the video streaming rights to their own shows, this means that the Canadian broadcast licensing model that relies heavily on exclusive rights to U.S. programming and simultaneous substitution will rapidly come to an end. While the industry has been focused on the fighting the recent CRTC decision banning simsub from the Super Bowl, U.S. broadcasters are independently eroding the value of simsub, ultimately leaving Canadian broadcasters to bid on less attractive, “non-exclusive” rights.

Bell has long-term licensing arrangements with CBS, but as new shows emerge they may be available to Canadians directly from CBS via its online video service. As more Canadians cut the cord and rely on the Internet for their video content, the value of the simsubbed broadcast will continue to decline with lost exclusivity and shrinking audiences.

None of this should come as a surprise. In 2011, I wrote the following in a piece that noted the growing importance of U.S. direct streaming:

While the use of the Internet to by-pass Canadian broadcasters is still relatively rare – most U.S. programs bundle the broadcast and Internet rights together – the decision to stream the games directly into the Canadian market could soon become the norm. The key determinant will obviously be money. Once U.S. rights holders conclude that it is more profitable to retain the Internet rights so that they can stream their programs online to a global audience and capture the advertising or subscription revenues that come with it, Canadian broadcasters may find that they can only license broadcast rights with the U.S. rights holders competing directly with them via the Internet.

The piece continued by arguing that this would be good news for Canadian content creators:

Canadian broadcasting has therefore involved a trade-off that allows private broadcasters to benefit from cheap, profitable U.S. programming in return for meeting their Canadian content obligations. The Internet is on the verge of disrupting this model by rendering the U.S. programs far less profitable for Canadian broadcasters, since acquiring broadcast-only rights means missing out on the fastest growing piece of advertising pie.

While this sounds like bad news for the creation of Canadian content, it might actually be its savior. Creator groups will likely focus on pressuring the foreign based video streamers to contribute to the creation of Canadian content, but Canadian broadcasters may become the bigger champions as they gradually recognize that owning the full suite of broadcast and Internet rights are essential to commercial success. If those rights cannot be obtained through conventional licensing models from U.S. rights holders, the broadcasters may begin to create their own Canadian content in earnest.

Creator groups have indeed been focused on contribution regimes (most notably with demands for a Netflix tax), but the real benefits will come from market pressures on Canadian broadcasters to create their own content for global licensing alongside streaming services that voluntarily invest in Canadian productions. If that sounds familiar, it is because that is precisely the model supported by former CRTC Chair Jean-Pierre Blais and Canadian Heritage Minister Melanie Joly.

The post The Diminishing Value of Simsub: CBS Streaming Service Coming to Canada Next Year appeared first on Michael Geist.

Canadian Telcos Take Aim At Kodi Addon Site With Shocking Search: True Purpose to “Destroy Livelihood of the Defendant”

Michael Geist Law RSS Feed - Fri, 2017/08/04 - 09:10

Canadian telecom giants Bell, Rogers, and Videotron have escalated their copyright fight against the sale and distribution of Android set-top boxes and websites that facilitate distribution of addons for Kodi software. Kodi boxes – Android set-top boxes pre-loaded with the open source Kodi media player software – have become increasingly popular in recent years. The set-top boxes turn standard televisions into “smart TVs”, enabling users to access their own content and a wide range of video content found online. By all accounts, this includes authorized content such as YouTube, Netflix or other online video providers, as well as unauthorized streaming services that offer access to unlicensed content. The set-top box providers do not make the content available themselves, but rather sell a device preloaded with software that can be used to access both infringing and non-infringing content. In the case of “addon” sites, the sites point to addons or plugins that can be added to the Kodi media player software to make it easier to access online content.

Bell, Videotron, and Rogers became increasingly concerned with the technology last year, claiming that the pre-loaded software on set-top boxes makes it easy to access infringing streaming content. Although the same could be said of most personal computers, they argued that the set-top boxes increase the likelihood of consumers cancelling their cable or satellite service and infringing their copyrights. Given their concerns, the companies asked the federal court to issue an injunction banning several companies from distributing any set-top boxes with pre-loaded software, characterizing the technology as an “existential” threat to their business models. The federal court issued the injunction, ruling that the companies met the legal standard of demonstrating “irreparable harm.”

More recently, the companies used the same strategy to target TVAddons, a Canadian-controlled website. The site contains information on Kodi software as well as addons that can be added to the media player. The case has attracted mounting attention due both to the manner in which the telcos used a civil search warrant (known as an Anton Pillar order) to access the home of Adam Lackman, a Montreal man who owns the site, as well as the copyright issues in the case. Their actions are documented by TorrentFreak, the CBC, and the National Post, which chronicle abusive conduct that included hours of interrogations without the ability to consult a lawyer along with efforts to obtain new evidence (as opposed to preserving existing evidence).

Several weeks after the search, a federal court judge vacated an earlier injunction and ordered the materials seized during the search returned (that order was later stayed by an appellate court). The judge’s findings indicate that the telcos went far beyond acceptable conduct in their efforts to shut down the site:

“It is important to note that the Defendant was not permitted to refuse to answer questions under fear of contempt proceedings, and his counsel was not permitted to clarify the answers to questions. I conclude unhesitatingly that the Defendant was subjected to an examination for discovery without any of the protections normally afforded to litigants in such circumstances.”

Further:

“I find the most egregious part of the questioning to be in the independent solicitor’s affidavit, wherein he deposes that counsel for the Plaintiffs ‘provided Defendant Lackman with some names’ of other people who might be operating similar websites. It appears the Defendant was required to associate that list of 30 names with names, addresses and other data about individuals that might have some knowledge or relationship to those names. The list and the responses of the Defendant are found on three complete pages in the exhibits of the independent solicitor’s affidavit. I conclude that those questions, posed by Plaintiff’s counsel, were solely in furtherance of their investigation and constituted a hunt for further evidence, as opposed to the preservation of then existing evidence.”

The judge then concludes that the Anton Pillar order was purposely designed by counsel:

“to completely shut down the Defendant’s operation. To the Plaintiffs, it mattered not that, by their own estimate, just over 1% of the Add-ons developed by the Defendant were allegedly used to infringe copyright. I therefore conclude that the purpose of the Anton Pillar Order under review was only partly designed to preserve evidence that might be destroyed or that could disappear. I am of the view that its true purpose was to destroy the livelihood of the Defendant, deny him the financial resources to finance a defence to the claim made against him, and to provide an opportunity for discovery of the Defendant in circumstances where none of the procedural safeguards of our civil justice system could be engaged. [emphasis added]”

The federal court findings are incredibly damning, suggesting abusive conduct by representatives for Bell, Rogers, and Videotron.

The copyright questions in the case are still to be determined, but as the federal court judge acknowledged, there are legal arguments on both sides. Canada has some of the world’s toughest anti-piracy legislation, including an “enabler” provision established in 2012 that makes it easier to target sites whose primary purpose is to enable infringement. The provision states:

It is an infringement of copyright for a person, by means of the Internet or another digital network, to provide a service primarily for the purpose of enabling acts of copyright infringement if an actual infringement of copyright occurs by means of the Internet or another digital network as a result of the use of that service.

The factors to be considered include:

(a) whether the person expressly or implicitly marketed or promoted the service as one that could be used to enable acts of copyright infringement;
(b) whether the person had knowledge that the service was used to enable a significant number of acts of copyright infringement;

(c) whether the service has significant uses other than to enable acts of copyright infringement;

(d) the person’s ability, as part of providing the service, to limit acts of copyright infringement, and any action taken by the person to do so;

(e) any benefits the person received as a result of enabling the acts of copyright infringement; and

(f) the economic viability of the provision of the service if it were not used to enable acts of copyright infringement.


In the TVAddons case, evidence will be needed to determine whether the enabler provision applies. The federal court judge already took note that the vast majority of the addons on the site are unrelated to infringing content. In fact, of the 1,500 addons, only 22 – or roughly 1% – were identified as infringing addons. Lackman’s lawyers argue that the site is akin to a search engine, functioning as intermediary to assist in locating content, but not playing a role in communicating it in violation of the Copyright Act.

Rights holders have powerful tools to stop infringing activity in Canada but courts should be cautious about shutting down disruptive technologies that have substantial non-infringing uses. These battles have gone on for decades, dating back to the Sony Betamax and Diamond Rio MP3 player, with established companies seeking to stop new technologies from gaining consumer acceptance. Android boxes, Kodi software and the thousands of addons can be used in many legitimate ways to provide consumers with alternatives to restrictive set-top boxes provided by cable and satellite companies.

In this case, there are challenging legal questions that deserve a full hearing with evidence at trial (Lackman is currently crowdsourcing support for his defence). What seems clear from the federal court judge, however, is that Bell, Rogers, and Videotron hoped to circumvent a trial altogether, obtaining an order designed to shut down the site without the opportunity to apply any of the legal safeguards to which everyone is entitled.

The post Canadian Telcos Take Aim At Kodi Addon Site With Shocking Search: True Purpose to “Destroy Livelihood of the Defendant” appeared first on Michael Geist.

Canada’s NAFTA Council: Political and Industry Boxes Checked But Missing Key Perspectives

Michael Geist Law RSS Feed - Thu, 2017/08/03 - 10:28

The Canadian government unveiled a new NAFTA Advisory Council yesterday as it prepares for trade negotiations that start later this month. The Council advising Minister Chrystia Freeland is an impressive one with broad representation from across the political spectrum and from many industry sectors. Indeed, the council is presumably as much about signalling the government’s priorities and including potential critics as it is about the substance of the negotiations. The committee therefore includes Conservatives (Rona Ambrose and James Moore) and NDP members (Brian Topp), Perry Bellegarde (national chief of the AFN), Hassan Yussuf (President of the Canadian Labour Congress) and a representatives from the automotive, energy, financial, agriculture, entertainment, and entrepreneurial sectors.

While that is a strong, diverse council, it is not fully representative as it is notable as much for who is not included as who is. There is no civil society representative despite years of concern that the public interest is left on the outside of trade negotiations. A new e-commerce chapter is one of the top U.S. priorities for NAFTA, yet there is no e-commerce or privacy expertise, despite the obvious impact on Canadian law. Telecom has been listed as a U.S. priority, but the sector is not on the committee. The environment is a major concern with the renegotiated NAFTA, but there is no representative dedicated to the issue. Trade dispute resolution is one of the most contentious issues, yet expertise is missing there as well. There will always be limits – a council of 20 or 30 would be unwieldy – but the signal of the government’s priorities is unavoidable.

The Trudeau government inherited a trade policy marked by secrecy, encroachment onto domestic regulation, and little ambition to see Canadian policies reflected in the final texts. The TPP’s demise and the re-opening of NAFTA offered the chance for real change by pursuing trade agreements that offer economic gains and remain true to the commitment for an open and transparent government. The NAFTA renegotiation is obviously Canada’s most important trade negotiation. It is disappointing that many key voices have not been included in the government’s leading advisory council, which raises concerns about whether their issues will be priorities as the negotiations unfold.

The post Canada’s NAFTA Council: Political and Industry Boxes Checked But Missing Key Perspectives appeared first on Michael Geist.

Inconsistent Arguments and Questionable Claims: Bell Launches Yet Another Action Over CRTC’s Super Bowl Simsub Ruling

Michael Geist Law RSS Feed - Wed, 2017/08/02 - 10:27

Jean-Pierre Blais’ term as CRTC chair was marked by dramatic changes in how policies were developed and in the substance of the policies themselves. As I wrote on his departure, Blais placed the Internet at the centre of the communications systems and worked to gradually revamp broadcast safeguards in an effort to make the Canadian system more globally competitive. With the appointment of new chair Ian Scott and vice-chair of broadcasting Caroline Simard, the established stakeholders will unsurprisingly test the new leadership to see if a change in approach is on the way. Yesterday, Bell took a major step in that direction as it asked the CRTC to rescind its order banning simultaneous substitution from the Super Bowl broadcast in Canada.

Bell had already filed a legal action, asked the government to intervene in the case, and ramped up lobbying pressure from the U.S., but the government rightly declined to overturn the decision with the case still before the courts. I’ve written extensively about the issue, making the case for why the CRTC got it right (if anything, it did not go far enough as simultaneous substitution has become less relevant as more subscribers cut the cable cord). After the Super Bowl broadcast, I argued that the viewership data largely vindicated the CRTC. Indeed, Bell’s data confirms that it massively over-estimated the impact of the simsub loss. In advance of the broadcast, it forecast a $40 million loss. It now claims an $11 million advertising loss, a fraction of its earlier estimate.

The right thing to do for the CRTC would be to follow the government’s lead, declining to take action while the issue remains before the courts. If it feels compelled to act, a broader review of simultaneous substitution that opens the door to removing the policy altogether would be in order. What it should not do is simply grant Bell’s request. For one thing, it would invite reconsideration of a long list of CRTC decisions, creating considerable regulatory uncertainty. For another, the Bell application is incredibly weak, riddled with inconsistent arguments and questionable claims based in part from commissioned research by Communic@tions Management Inc. Bell’s application and supporting documents throw as much mud at the wall in the hope that something will stick with everything from claiming Canadians don’t care about the issue to suggesting that U.S. ads during the Super Bowl could pose health and financial risks to Canadians.

For example, Bell claims that few Canadians care about U.S. commercials (it argues that “only 0.001% of viewers complained to the Commission about the lack of advertising in Canadian Super Bowl broadcasts”), but also makes the case that millions of Canadians chose to watch the U.S. feed with U.S. commercials rather than its Canadian feed with Canadian commercials. The two arguments are at odds with one another: if no one cared, presumably viewership would not have declined as it did.

Bell also emphasizes that Canadians can easily access the U.S. Super Bowl commercials online. Yet its own research from Nanos also finds that 40% of Canadians were unaware of their availability online before the game. Assuming those numbers are wrong (calling into question the validity of its survey data) – most Canadians can access the commercials online – then Bell’s argument that simsub protects Canadians from U.S. commercials that promote unapproved pharmaceutical products or unregulated financial services is undermined given the ease with which that information can also be accessed online.

Bell’s submission also argues that the policy undermines the Income Tax Act policy that grants deductions for Canadian advertising on Canadian broadcasters (but not advertising on U.S. services) because U.S. services offered lower prices to compensate for the lost tax deduction. Yet that is a function of the market at work, not a failure of Canadian policy.

Bell has an assortment of additional arguments (it promises a curated show of ads for free distribution before the game that ignores the finding that the commercials are integral part of the broadcast and it has previously argued that the CRTC ruling interferes with its contract with the NFL, as if private companies should be entitled to use contract to override regulatory decisions), but the headline story coming out of the Bell submission is that the decision cost the economy a staggering $158 million.

If that sounds implausible, that’s because it is. How does Bell arrive at the claim?  In addition to the $11 million it says it lost in advertising revenue, there are two sources for the economy claims: lost retail and e-commerce revenues and lost television revenues. The lost retail and e-commerce revenues is a classic piece of guesswork:

1.    A 2014 study estimated the value of simsub at $240 million. Since Bell says it lost $11 million on the Super Bowl broadcast, it estimates that the broadcast represents 4.6% of the total value of simsub.
2.    The report looks at the total value of retail sales and argues that if the loss of simsub were to shift sales 2/10th of a percent from Canada to the U.S., that would be a loss of $1.1 billion.
3.    The report also looks at e-commerce sales, estimating that 38% of Canadian purchases come from the U.S.  It then estimates that if the loss of simsub led to a 4% shift to U.S. online sellers, that would result in an additional $1.36 billion loss.
4.    Since it estimates that the Super Bowl broadcast is 4.6% of total simsub, it pegs the lost retail and e-commerce revenues at $113 million.

Note that this is all guesswork with little grounding in actual data, examination of actual advertising, or actual data on consumer purchasing habits.

The estimate on lost television revenues is not much better. It estimates the lost revenue for Canadian conventional television at $472 million (nearly double the lost core value). Bell then doubles that nearly doubled number to account for the “ripple effect”. That puts the loss at $986 million. Once again, it takes 4.6% of that figure to arrive at the figure of $45 million. In other words, the $158 million is the product of near-complete guesswork that Bell should be embarrassed to put forward as a serious claim and that the CRTC should have little trouble dismissing as not credible.

Canadians have long had the choice of multiple feeds for major sporting events, including the Stanley Cup, the World Series, the Olympics, and the World Cup. The Super Bowl, which Bell survey data now says “is only of interest to less than half of Canadians”, was the outlier. The CRTC policy created consistency in approach with a limited advertising impact that was only a fraction of Bell’s dire predictions. There is simply no need for the CRTC to revisit the issue.

The post Inconsistent Arguments and Questionable Claims: Bell Launches Yet Another Action Over CRTC’s Super Bowl Simsub Ruling appeared first on Michael Geist.

Why Fair Dealing is Not Destroying Canadian Publishing

Michael Geist Law RSS Feed - Thu, 2017/07/27 - 09:10

While the copyright world waits for the likely appeal of the Access Copyright v. York University federal court decision (my post on the fair dealing legal errors, Ariel Katz on tariff legal errors), Canadian universities have begun to respond to the decision with many remaining committed to a reasonable policy based on licensing, open access, and fair dealing. Rather than a free-for-all, these approaches include spending hundreds of millions of dollars for access to thousands of copyright works.

This week, Intellectual Property Watch posted a longer piece of mine based on several recent posts and articles. It digs into the data, unpacking the realities behind revenues, guidelines, licensing, and emerging alternatives. The post begins:

For the past few years, publishers around the world have engaged in a sustained campaign to hold up Canada as proof that making fair dealing more flexible for education will hurt publishers. Those efforts rarely tell the whole story: that paid access remains the primary source of materials in Canada, that educational copyright policies in Canada are primarily a function of court decisions not copyright reform (the emphasis on fair dealing came before the 2012 reforms), that global publishers were reporting marketplace challenges that have nothing to do with copyright, that Canadian publishers that supposedly stopped publishing were still in business, that court affidavits from Canadian publishers focus on many concerns other than copyright, and that a study from one Canadian publisher association highlighted issues such as open access and used book sales.

The full piece can be found here.

The post Why Fair Dealing is Not Destroying Canadian Publishing appeared first on Michael Geist.

Google Files Suit in U.S. Court To Block Enforcement of Canadian Global Takedown Order

Michael Geist Law RSS Feed - Tue, 2017/07/25 - 10:51

Last month’s Supreme Court of Canada decision upholding a global takedown order requiring Google to remove search results on an international basis sparked widespread concern from civil liberties and digital rights groups who fear the implications for freedom of expression online (the case was celebrated by IP rights groups who now envision using Canada as the base for global takedowns). My initial post on the decision argued that the Court had failed to grapple with the elephant in the room, namely the broader implications of global takedowns and the likelihood of conflicts:

The Supreme Court of Canada did not address the broader implications of the decision, content to limit its reasoning to the need to address the harm being sustained by a Canadian company, the limited harm or burden to Google, and the ease with which potential conflicts could be addressed by adjusting the global takedown order. In doing so, it invites more global takedowns without requiring those seeking takedowns to identify potential conflicts or assess the implications in other countries.

The prospect of global conflicts has now come to the Equustek case with Google filing suit in a federal court in California asking the court to block enforcement the Canadian order on the grounds that it violates the U.S. constitution and federal laws.

The case is reminiscent of the first big Internet jurisdiction case: the 2000 Yahoo France case in which a French court ordered the removal of certain content and Yahoo sued in U.S. courts to block enforcement of the order. The suit suggests that the Equustek case may run for several more years as the U.S. courts consider whether to stand aside in the face of foreign courts issuing global takedowns that impact what their citizens can access online.

The Google suit states:

Google now turns to this Court, asking it to declare that the rights established by the First Amendment and the Communications Decency Act are not merely theoretical. The Canadian order is repugnant to those rights, and the order violates principles of international comity, particularly since the Canadian plaintiffs never established any violation of their rights under U.S. law. Pursuant to well-established United States law, Google seeks a declaratory judgment that the Canadian court’s order cannot be enforced in the United States and an order enjoining that enforcement.

Google’s suit to block the Canadian order is grounded in three arguments. First, it points to the First Amendment freedom of expression implications of the order, noting that there are many less restrictive options available:

Enforcing the Canadian Order in the United States would violate the First Amendment. The Canadian Order furthers no compelling interest (nor a substantial interest), and is not narrowly tailored to achieve one. The existence of the Datalink websites is, and remains, a matter of public record. Equustek cannot show that it has no alternatives available other than enjoining Google’s search results outside of Canada. Upon information and belief, Equustek has not sought similar delisting injunctions against the world’s other search engines, such as Bing or Yahoo; has not taken action against other third-party websites (such as social media or press websites) displaying links to Datalink websites; has not pursued more targeted remedies against Datalink’s registrars or its webhosts, which could remove Datalink’s websites from the internet entirely; and has not stopped the sale of Datalink’s products through Amazon. Equustek did not even seek to seal the Datalink website addresses themselves before any court.

Second, it argues that the order is inconsistent with the Communications Decency Act, which grants immunity to Internet intermediaries for posting third party content. While the CDA excludes U.S. IP law, Google notes that this is Canadian trade secret law case that does not involve U.S. intellectual property rules.

Third, Google makes the case that the order violates U.S. public policy:

The Canadian Order is further repugnant to United States public policy because it issued an injunction against Google, an innocent non-party, merely for the sake of “convenience.” The non-party injunction standard applied by the Supreme Court of Canada did not come close to satisfying well-settled United States law for imposing injunctions. The Canadian standard only considers “the balance of convenience,” and not the “balance of equities,” and the Canadian court placed the burden on Google, a non-party, to disprove Equustek’s rights in every country outside of Canada, rather on Equustek, the plaintiff in the action, to prove its entitlement to removal of search results in each country in which it sought removal. Moreover, the Canadian standard took no account of the “public interest” at all.

This latest legal turn is precisely what critics of the Supreme Court ruling feared as the prospect of conflicting rulings, protracted litigation, and legal uncertainty becomes a reality. While the Supreme Court’s decision avoided mandating monitoring or assigning liability to intermediaries, by upholding global takedowns without fully addressing the implications (the Court of Justice of the EU was recently asked to do so), it effectively invited other courts to issue conflicting decisions without guidance on how to best resolve the issue.

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Canada’s National IP Strategy: My Submission on Awareness, Administration and Innovation

Michael Geist Law RSS Feed - Thu, 2017/07/20 - 10:19

The Canadian government announced plans for the development of a national IP strategy in this year’s budget. The Ministry of Innovation, Science and Economic Development held a series of roundtables late last month and invited public comment. The comment period closed earlier this week and the submissions should soon be posted online.  My submission is posted below.

Drawing on prior writing and committee appearances (and some overlap with NAFTA issues), the submission focuses on three broad areas: IP awareness, administration and fostering innovation. The innovation piece forms the majority of the submission with discussion of seven issues: knowledge transfer strategies, IP abuse and misuse, fair use/flexible fair dealing, anti-circumvention legislation exceptions, artificial intelligence, crown copyright and copyright term.

National IP Strategy Submission – July 17, 2017

I am a law professor at the University of Ottawa, where I hold the Canada Research Chair in Internet and E-commerce Law. My areas of specialty include digital policy and intellectual property. This response is submitted in my personal capacity reflecting my own views.  I focus on three broad IP strategy issues: awareness, administration, and innovation.

a.    Awareness

Your letter includes several questions focused on the awareness of IP, including issues related to education, advice, access, and inclusivity. I should note that the Centre for Law, Technology and Society at the University of Ottawa (of which I am a member) is actively involved in addressing these concerns. Programs include a wide range of intellectual property law courses, moots, and research opportunities. The Centre also offers a technology law internship program that enables law students to work at law firms, government policy departments, and technology companies. These programs are openly available to hundreds of law students each year.

The prospect of expanding the programming to the wider community – including the development of online education programs – would be worth pursuing and of great interest to the Centre. The government could play an important role in opening opportunities to students and by providing financial support for the development of open educational resources that could be used by interested Canadians.

There is also a need to ensure that IP issues are readily accessible to non-expert Canadians and Canadian businesses. Like many academics, I have worked to make my research and writing openly available and accessible to the public. This has included several books and hundreds of articles and posts on IP that are all openly available under Creative Commons licences. Exploring mechanisms to expand accessible materials should be pursued with academic experts from across Canada and government granting agencies such as the Social Sciences and Humanities Research Council of Canada.

b.    Administration

From an IP administration perspective, reform of the Copyright Board of Canada is much needed. There is no shortage of criticism of the Board. Indeed, in an field that is often sharply divided, disenchantment with Board is sometimes the one thing people seem able to agree upon. The Board was slow to acknowledge and implement the copyright decisions delivered by the Supreme Court of Canada, particularly those involving fair dealing. That has changed in recent months, however, and its decisions are now more reflective of the court’s jurisprudence. The Board’s rulings are and will continue to be challenged, but there is an established system to address appeals. Reform on the substance of decisions is not needed.

Contrast the substantive concerns with the administrative ones, however. How the Board reaches decisions, the costs involved, the timeliness of those decisions, and the ease of participation is very much a matter for review. There is unquestionably a need to develop reasonable timelines for conducting hearings and issuing decisions. Further, the Board needs to actively work to open its proceedings and activities to the broader public. The exclusion of the public stands in sharp contrast to the other boards, tribunals, and agencies that address issues with individual parties but whose decisions have ramifications for a far broader group of stakeholders. Adopting models similar to those used by the Canadian Radio-television and Telecommunications Commission that facilitate funded participation by public interest and civil society groups should be explored.

c.    Innovation

While IP awareness and administration issues are important, the Canadian government should also ensure that Canadian IP laws foster innovation and reflect Canadian policies and values. As part of the 2012 copyright reform process, Canada adopted an innovative approach with respect to reform. Many of these reforms – including protection of user-generated content, an Internet exception for education, and statutory damages limits on non-commercial infringement – are models for inclusive, forward-looking policy development. However, that process still left some issues untouched or unresolved that should be addressed through the development on an IP strategy. This section identifies seven issues: knowledge transfer strategies, IP abuse and misuse, fair use/flexible fair dealing, anti-circumvention legislation exceptions, artificial intelligence, crown copyright, and copyright term.

i.    Knowledge Transfer Strategies

One of the chief concerns with Canada’s IP performance is the transfer of knowledge from the lab to the market with successful commercialization. The notion of “tech transfer” has taken hold in some discussions on how Canada can shift innovative research from Canadian campuses to exciting new commercialization opportunities. However, the real goal is not tech transfer, but knowledge transfer.

Knowledge transfer encompasses a far broader set of policy goals that seek to take the knowledge that emerges from within our labs and classrooms and bring it out to the public – whether for commercialization, better public policies, or a more informed and engaged public. Knowledge transfer certainly includes tech transfer but it also includes research papers, data trials, educational materials, and highly qualified students and personnel. Simply put, if the target is just IP and tech transfer, we miss out of many of the benefits that come from innovative post-secondary research and run the risk of establishing the wrong incentives within our policy frameworks.

Further, the potential emphasis on the U.S. Bayh-Dole approach is misplaced. There is little evidence that the policies governing who owns IP rights have an overriding impact on the success of tech transfer as measured by the volume of patents and licenses.

This should come as little surprise to anyone who has spent time on campuses with academic researchers. The metrics of success in the academic environment – publications, grants, tenure, chairs, successful students – have little correlation with commercialization.  Even for those with commercial interests, those are often achieved through consulting arrangements or other mechanisms where the business expertise is left to business people.

The emphasis on university-based patenting is misplaced. It can have a corrosive effect on universities, who forego important, publicly-funded research in favour of potential licensing or patenting opportunities.  With properly funded institutions, there is no need to chase licensing dollars. Instead, the cutting edge research ends up in the hands of businesses who can better leverage it for commercialization opportunities.  This should not be viewed as lost revenue for universities or their researchers, but rather as a better return on the public’s investment in post-secondary research.

If the currency of academics is publishing – not patents – then the challenge is how to ensure that the published research ends up as broadly distributed as possible. While it has captured limited attention outside of educational circles, the Internet has facilitated the emergence of open access publishing of research, transforming the multi-billion dollar academic publishing industry and making millions of articles freely accessible to a global audience. The move toward open access means that global research is far more accessible to everyone – scientists, researchers, businesses, and the general public.

The three federal research granting institutions – CIHR, NSERC, and SSHRC – have adopted open access mandates that requires recepients of federal funding to make their published work available under open access.

This helps foster greater collaboration between researchers and the business community with improved access leading to commercialization opportunities that might otherwise be missed. Further, openly available articles are already being incorporated into teaching materials, thereby replacing conventional textbooks and removing the need for copyright permissions and fees.

As for government strategies, open access mandates should only be the beginning.  Moving toward open trial data and open book publishing are the next steps in linking significant public funding to enhancing public access to their investment.

ii.    IP abuse and misuse

While some may use the consultation to call for expanded intellectual property rules, the reality is that Canada already meets or exceeds international standards. The more pressing innovation issue is to address the abuse of intellectual property rights that may inhibit companies from innovating or discourage Canadians from taking advantage of the digital market.

The benefits of an anti-IP abuse law could be used to touch on the three main branches on intellectual property: patents, trademarks, and copyright.

Leading technology companies have issued repeated warnings about patent trolling, which refers to instances when companies that had no involvement in the development of a patent seek payments from legitimate companies by relying on dubious patents. Patent trolls have a negative impact on economic growth and innovation with millions spent on unnecessary litigation.
Groups have urged the Canadian government to enact reforms to “limit the ability of non-practicing entities [a euphemism for patent trolls] of exploiting patents to make unreasonable demands of productive companies and prevent crippling damage awards.”

There are no shortage of policy possibilities, including a prohibition against legal demands that are intentionally ambiguous or designed to induce a settlement without considering the merits of the claim. Other reforms could include requiring public disclosure of the demand letters, reforming the Competition Act to give the Competition Bureau the power to target anti-competitive activity by patent trolls, and giving courts the power to issue injunctions to stop patent trolls from forum shopping.

Canadian trademark rules would also benefit from anti-abuse provisions. In 2014, the government quietly overhauled the law by removing longstanding “use” requirements for trademark protection. Legal decisions dating back decades emphasized the importance of use in order to properly register a trademark, since trademark law is primarily designed to protect consumers from marketplace confusion. Without use, there is unlikely to be confusion.

The 2014 reforms dropped the strict requirement for use in a trademark, however, creating considerable concern within the legal community. Canada may see a spike in “trademark trolls”, who could register unused trademarks with plans to pressure legitimate companies to pay up in order to release the trademarks for actual use. Anti-trademark troll rules would block efforts to register unused trademarks for the purposes of re-selling them to businesses seeking to innovate and use them.

Copyright law would also benefit from anti-troll safeguards. Canada’s 2012 digital copyright reforms featured an innovative “notice-and-notice” system designed to balance the interests of copyright holders, the legal obligations of Internet service providers (ISPs), and the privacy rights of Internet users. The law allows copyright owners to send infringement notices to ISPs, who must forward the notifications to their subscribers.

Despite the promise of the notice-and-notice system, it has been misused since it took effect with copyright owners exploiting a loophole in the law by sending settlement demands within the notices. The fix is straight-forward: implement anti-copyright troll regulations that ban the inclusion of settlement demands within the notices and create penalties for those companies that send notices with false or misleading information.

iii.    Innovation and IP: Fair Use/Flexible Fair Dealing

Led by the United States, several countries around the world, including Israel, South Korea, and Singapore, have established fair use provisions within their copyright laws. Fair use does not mean free use – rather, it means that there is a balance that allows certain uses of works without permission so long as the use is fair.  The Supreme Court of Canada has already ruled that Canada’s fair dealing provision must be interpreted in a broad and liberal manner. Yet the law currently includes a limited number of categories (research, private study, criticism, news reporting education, parody, satire, and review) that renders many everyday activities illegal.

The ideal remedy is to make the current list of categories illustrative rather than exhaustive. This can be best achieved by adding the words “such as” to the current provision. This would be a clean, technology-neutral approach, giving Canada the equivalent of a pro-innovative fair use provision but based on the longstanding fair dealing jurisprudence.

iv.    Innovation and IP: Anti-Circumvention Legislation Exceptions

Canadian copyright law’s anti-circumvention provisions are among the most restrictive in the world and badly undermine the traditional copyright balance in the digital world creating unnecessary restrictions on innovation. Canadians can freely exercise their fair dealing rights in the analog world, but the 2012 reforms went far beyond the WIPO treaty requirements by creating unnecessary restrictions on fair dealing in the digital environment. This creates a “fair dealing gap”, where there is a gross mismatch between user rights in the analog world and the digital world. The fair dealing gap should be addressed by establishing a long overdue fair dealing exception for the digital lock rules.

While the Canadian exceptions were narrowly constructed and limited to a handful of circumstances, the U.S. has actually been expanding its digital lock exceptions. It recently introduced exceptions for innovative activities such as automotive security research, repairs, and maintenance, archiving and preserving video games, and for remixing videos from DVDs and Blu-Ray sources.

Canada has the power to introduce new digital lock exceptions, but has yet to do so. During the final stages of the copyright reform process in 2012, the Liberals supported an amendment to expand the digital lock exceptions to cover circumventions for all lawful purposes. As Liberal MP Geoff Regan noted when speaking in support of the change, “what the government seems to want to do is preserve old models and ignore the fact that we have moved into a digital world.” Regan cited comments from software developers, librarians and archivists who all warned of the dangers of overly restrictive digital lock rules.  The IP strategy should address this restrictive approach with long overdue reforms.

Recent Canadian cases illustrate the potential for copyright to be used to stifle innovation. In March 2017,  the Federal Court of Canada ruled on a case involving the sale and distribution of “modchips”, which can be used to circumvent digital controls on video game consoles. Nintendo filed a lawsuit against a modchip retailer in 2016, arguing that the distribution of modchips violated the law, even without any evidence of actual copying.

The federal court agreed, pointing to the 2012 anti-circumvention rules that largely mirror legal restrictions on by-passing copy and access controls found in the United States in awarding $12.7 million in damages. The court adopted an aggressive approach in interpreting the digital lock provisions, while also taking a narrow view of exceptions that were designed to safeguard legitimate reasons to circumvent such as interoperability of computer programs. If followed by other courts, the ruling could similarly restrict the applicability of privacy, security research, and access for the blind exceptions found in the law.

v.    Innovation and IP – Artificial Intelligence

The federal government placed a big bet in this year’s budget on Canada becoming a world leader in artificial intelligence (AI), investing millions of dollars on a national strategy to support research and commercialization. Funding and personnel have been the top policy priorities, yet other barriers to success remain. For example, Canada’s restrictive copyright rules may hamper the ability of companies and researchers to test and ultimately bring new AI services to market.

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.

For example, consider how machines are taught to translate languages. Last year, the United Nations released 800,000 manually translated documents in the six official UN languages (English, French, Spanish, Arabic, Russian, and Chinese) for machine use. By releasing documents containing perfect translations in multiple languages, the data set helps create better automated translation systems. Indeed, official government documents have been an important data source for automated translation since they offer professionally translated materials of identical content.

Yet the downside of relying on these documents is that treaties and diplomatic correspondence rarely mimic everyday speech. Better systems would benefit from a broader range of materials such as translated popular books or television shows. The goal is not to republish or compete with copyright materials, but rather to ensure that researchers and AI companies can mine the text and data for informational analysis purposes.

Canadian courts have ruled that fair dealing – the copyright law’s foundational exception that permits use of materials without the need for prior permission – is a user’s right that should be interpreted in a broad and liberal manner. There are several purposes that would permit some text and data mining activities, notably exceptions for research, education, and private study. However, given Canada’s emphasis on the commercial benefits of AI, the law may not offer sufficient flexibility to safely move from the lab or classroom to the market.

There are two ways to overcome the copyright AI barrier. First, as noted above, 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.

vi.    Innovation and IP: Crown Copyright

Dating back to the 1700s, crown copyright reflects a centuries-old perspective that the government ought to control the public’s ability to use official documents. Today crown copyright extends for fifty years from creation and it requires anyone who wants to use or republish a government report, parliamentary hearing, or other work to first seek permission. While permission is often granted, it is not automatic. The Canadian approach stands in sharp contrast to the situation in the U.S. where the federal government does not hold copyright over work created by an officer or employee as part of that person’s official duties.  Government reports, court cases, and Congressional transcripts can therefore be freely used and published.

The existence of crown copyright affects both the print and audio-visual worlds and is increasingly viewed as a barrier to innovation, including Canadian film making, political advocacy, and educational publishing. The government has established an open licence to address some crown copyright concerns, but a better pro-innovative system would establish a presumption that government materials belong to the public domain to be freely used without prior permission or compensation.

vii.    Innovation and IP: Copyright Term

The term of copyright in Canada is presently life of the author plus an additional 50 years, a term consistent with the international standard set by the Berne Convention. From a policy perspective, the decision to maintain the international standard of life plus 50 years is consistent with the evidence that term extension creates harms by leaving Canadians with an additional 20 years of no new works entering the public domain with virtually no gains in terms of new creativity. In other words, in a policy world in which copyright strives to balance creativity and access, term extension restricts access but does not enhance creativity.

The negative effects of term extension has been confirmed by many economists, including in a study commissioned by then-Industry Canada, which have concluded that extending the term simply does not create an additional incentive for new creativity. Moreover, studies in other countries that have extended term have concluded that it ultimately costs consumers as additional royalties are sent out of the country. Increased costs and reduced access hurts Canadian innovation without commensurate economic or cultural gains. The Canadian IP strategy should retain the commitment to meeting but not exceeding the Berne standard of protection of life of the author plus 50 years.

The post Canada’s National IP Strategy: My Submission on Awareness, Administration and Innovation appeared first on Michael Geist.

My NAFTA Consultation Comments: Promoting Canadian Interests in the IP and E-commerce Chapters

Michael Geist Law RSS Feed - Tue, 2017/07/18 - 11:23

The Canadian government’s deadline for written submissions to the consultation on the renegotiation of the North American Free Trade Agreement closes today (though the government just announced that it will continue to accept comments on its form after the deadline). My submission to the consultation is posted below. I focus on two chapters: intellectual property and the new e-commerce chapter.

The submission begins with three broad comments and recommendations including the need for trade transparency, recognizing the importance of IP and e-commerce (and therefore not easily giving on those issues for gains elsewhere), and the desirability of an explicit commitment to balance as an objective in the IP chapter.

The IP chapter comments also identify three strategic goals: creating a level playing field for innovation (including fair use, anti-circumvention exceptions, and IP abuse safeguards), compliance with international law, and the adoption of an equivalency guiding principle to allow countries to their own policies with similar objectives. The e-commerce chapter comments focus on the need to avoid provisions that undermine privacy and security (including data localization and data transfer rules), inclusion of higher level privacy protection requirements, and retaining the cultural exemption.

NAFTA Consultation Submission – July 18, 2017

I am a law professor at the University of Ottawa, where I hold the Canada Research Chair in Internet and E-commerce Law. My areas of specialty include digital policy and intellectual property. This response is submitted in my personal capacity reflecting my own views.

The focus of my submission is primarily on two chapters: the intellectual property chapter and the potential e-commerce chapter.

General Comments

Before addressing specific policy issues within those chapters, I offer three broader comments and policy recommendations on the NAFTA renegotiation with respect to IP and e-commerce.

i.    Trade Transparency

First, I would emphasize the importance of transparency and public participation throughout the negotiation process. The public backlash against the Trans Pacific Partnership and other recent trade deals points to a process that leaves many feeling excluded and terms that are presented publicly for the first time as final. The real opportunity for the Canadian government is not just to update NAFTA, but to challenge some of the longstanding assumptions about free trade agreements in order to foster greater public confidence in the outcome.

The lack of transparency associated with the TPP – trade talks took place entirely behind closed doors with little public consultation or review of proposed provisions – fostered a culture of mistrust that made it a hard sell around the world. As Canada moves ahead with NAFTA trade talks, there is a need to develop a more open and transparent approach that includes active consultations throughout the negotiation process and more open access to draft text and terms.

ii.    The Importance of IP and E-commerce

The Canadian government has emphasized the importance of intellectual property and e-commerce in a modern economy. Indeed, with national strategic initiatives on both IP and the digital economy, there are few issues that have a tigher link to creating an innovative, successful economy in the 21st century.  Given its importance, I urge the government to ensure that these issues are not lost amidst trade-offs over more conventional trade issues such as agriculture access or the forestry and automotive sectors. All are important sectors, but sacrificing Canadian opportunities in IP and e-commerce in return for benefits in other sectors may result in short-term political gain for longer-term economic pain.

In fact, trade agreements may be a poor place to negotiate these issues, which have traditionally fallen within the purview of international organizations that develop consensus based treaties with broad stakeholder participation. Canada has often done its best work within that multilateral environment. While modern trade deals will often include sections on economic regulation, including IP and e-commerce, requiring countries to meet global standards but shying away from dictating how to meet those standards provides an avenue to ensure an equal playing field consistent with international laws.

iii.    Inclusion of Balance as an Objective

The initial drafts of the TPP included objectives language within the IP chapter that was supportive of expanded objectives that emphasized balance, the public domain, and timely access to affordable medicines. Canada was supportive of this approach. NAFTA should include similar language on maintaining balance across all IP rights, the legitimate interests of users, promoting access to and preserving the public domain, ensuring that IP rights do not create barriers to legitimate trade, and facilitating access to affordable medicines.

The objectives provision may not carry the same weight as positive obligations in the treaty, but they are important, reflecting the goals of the negotiating parties and providing a lens through which all other provisions can be interpreted. Canada and many other countries wanted to ensure that the lens promoted maintaining a balance between rights holders and users on all IP provisions within the TPP. The government should support that approach in NAFTA.

Chapter Specific Comments: Intellectual Property

The NAFTA intellectual property chapter promises to be among the most contentious renegotiation chapters. Canada has enacted major amendments to its IP laws in recent years, but the U.S. is likely to seek further reforms. To place the issue in context, over the past five years, Canada has added anti-circumvention laws similar to those found in the U.S., added stronger enforcement measures (including the “enabler” provision for websites that facilitate infringement), enacted anti-counterfeiting laws, extended the term of protection for sound recordings, and engaged in patent and trademark reforms. When added to earlier reforms such as anti-camcording rules and recent court decisions that addressed U.S. concerns about Canadian patent rules, Canada has acquiesced to many IP policy demands from the U.S.

As Canada heads toward another round of negotiation within the NAFTA, it should be recognized that Canada already meets its international IP obligations and has largely addressed previous U.S. demands regarding further reforms. At a broad level, the Canadian negotiating goal should be to retain an appropriate IP balance that fosters creativity and access, while ensuring that there is room for Canadian-specific policies that sit within the flexibilities of the international IP framework.  In fact, rather than simply “playing defence” to U.S. IP demands, Canada should pro-actively seek to ensure that Canadian IP priorities and policies are reflected in the agreement.

Ensuring that NAFTA’s IP provisions benefit Canadians can be best achieved through three strategic objectives: promoting a level playing field for innovation, mandating compliance with international law, and codifying that protections and safeguards need to be equivalent but not necessarily identical in structure within NAFTA countries. Each strategic objective is discussed further below.

i.    Level Playing Field for Innovation

Canada’s top IP policy objective should be to ensure that there is a level playing field for Canadian business across the North American market. This will require the addition of several provisions to the agreement.

a.    Fair Use/Flexible Fair Dealing

Led by the United States, several countries around the world, including Israel, South Korea, and Singapore, have established fair use provisions within their copyright laws. Fair use does not mean free use – rather, it means that there is a balance that allows certain uses of works without permission so long as the use is fair.  The Supreme Court of Canada has already ruled that Canada’s fair dealing provision must be interpreted in a broad and liberal manner. Yet the law currently includes a limited number of purposes (research, private study, criticism, news reporting education, parody, satire, and review) that renders many everyday activities illegal.

The availability of U.S. fair use represents a significant competitive advantage for U.S. businesses and creators. To ensure a level playing field for innovation, NAFTA IP chapter should require that all parties feature a fair use or fair use equivalent provision.

b.    Anti-Circumvention Legislation Exceptions

Canadian copyright law’s anti-circumvention provisions are among the most restrictive in the world and badly undermine the traditional copyright balance in the digital world creating unnecessary restrictions on innovation. Canadians can freely exercise their fair dealing rights in the analog world, but the 2012 reforms went far beyond the WIPO treaty requirements by creating unnecessary restrictions on fair dealing in the digital environment. This creates a “fair dealing gap”, where there is a gross mismatch between user rights in the analog world and the digital world. The fair dealing gap should be addressed by establishing a long overdue fair dealing exception for the digital lock rules.

While the Canadian exceptions were narrowly constructed and limited to a handful of circumstances, the U.S. has actually been expanding its digital lock exceptions. It recently introduced exceptions for innovative activities such as automotive security research, repairs, and maintenance, archiving and preserving video games, and for remixing videos from DVDs and Blu-Ray sources.

The imbalance in exceptions creates an uneven playing field for innovation and should be remedied within NAFTA. Canada has the power to introduce new digital lock exceptions, but has yet to do so. NAFTA should prescribe statutory minimums for anti-circumvention exceptions, including one for fair use/fair dealing.

c.    IP abuse and misuse

The NAFTA IP chapter should also address the abuse of intellectual property rights that may inhibit companies from innovating or discourage Canadians from taking advantage of the digital market. The benefits of an anti-IP abuse law could be used to touch on the three main branches on intellectual property: patents, trademarks, and copyright.

For example, leading technology companies have issued repeated warnings about patent trolling, which refers to instances when companies that had no involvement in the development of a patent seek payments from legitimate companies by relying on dubious patents. Patent trolls have a negative impact on economic growth and innovation with millions spent on unnecessary litigation.
Canadian companies have faced the daunting prospect of expensive U.S.-based patent litigation that can have a chilling effect on innovation and create barriers to market entry. NAFTA provisions against patent trolling and other IP abuses would benefit the full North American market by creating much needed safeguards against abusive patent behaviour.

ii.    Compliance with International Law

One of the chief concerns with past trade negotiations is the expectation that the U.S. requires other countries to mirror its IP laws, even if those laws extend far beyond international law requirements. A good example of this phenomenon involves anti-circumvention rules.  The U.S. has sought that other countries mirror the Digital Millennium Copyright Act, a statute that establishes requirements that extend far beyond those required by the WIPO Internet treaties. The U.S. objectives for the NAFTA negotiation speak of protection and enforcement rules that are “similar” to U.S. law.

The Canadian approach should be to require NAFTA parties to meet international law, but to retain the full flexibility found within those laws. For example, the term of copyright in Canada is presently life of the author plus an additional 50 years, a term compliant with the international standard set by the Berne Convention. From a policy perspective, the decision to maintain the international standard of life plus 50 years is consistent with the evidence that term extension creates harms by leaving Canadians with an additional 20 years of no new works entering the public domain with virtually no gains in terms of new creativity. In other words, in a policy world in which copyright strives to balance creativity and access, term extension restricts access but does not enhance creativity.

The negative effects of term extension has been confirmed by many economists, including in a study commissioned by then-Industry Canada, which concluded that extending the term simply does not create an additional incentive for new creativity. Moreover, studies in other countries that have extended term have concluded that it ultimately costs consumers as additional royalties are sent out of the country. Increased costs and reduced access hurts Canadian innovation without commensurate economic or cultural gains. Each NAFTA country has a different term of protection. Canada’s position within NAFTA negotiations should be to require all parties to comply with the Berne Convention standard of protection of life of the author plus 50 years, with the non-mandatory option for each party to exceed that term as they see fit.

iii.    Equivalent but not Identical

As the U.S. objectives for the NAFTA negotiations acknowledge, laws may be “similar” if not identical to achieve equivalent objectives. The establishment of an equivalency approach should be a guiding principle in the IP chapter to allow countries to adopt their own policies and regulations consistent with similar objectives.

For example, Canada’s 2012 digital copyright reforms featured an innovative “notice-and-notice” system designed to balance the interests of copyright holders, the legal obligations of Internet service providers (ISPs), and the privacy rights of Internet users. The law allows copyright owners to send infringement notices to ISPs, who must forward the notifications to their subscribers.  There have been problems with the system, but countries (including the U.S. in the TPP) acknowledged that it provides equivalent protection to that found in the U.S. notice-and-takedown system. Given the equivalency, a requirement for a notice-based safe harbour system should be drafted in a sufficiently broad manner to allow these equivalent but different approaches to co-exist.

The same approach should apply to damages and enforcement regimes. Both Canada and the U.S. have tough statutory damages provisions that far exceed those found in most countries. Moreover, Canadian law features a unique “enabler” provision that can be used to target websites that facilitate infringement. The NAFTA standard on enforcement should allow for differing approaches to damages and enforcement within the context of a consistent requirement for balance and effectiveness.

Chapter Specific Comments: E-commerce

The new e-commerce chapter offers the opportunity to update NAFTA to reflect an increasingly important aspect of modern cross-border commercial activity. While the starting point will likely be the TPP chapter, Canada’s negotiating objectives should differ from the TPP in several important ways.

The policy behind an e-commerce chapter should be to facilitate modern, electronic commerce, with three strategic objectives guiding Canada’s position. First, Canada should be wary of provisions that undermine legitimate public policy interest, including privacy and security. This concern is particularly pronounced with respect to restrictions on data localization and data transfers, both identified by the USTR as issues of concern. Second, Canada should seek higher level privacy protections and e-commerce regulations in NAFTA. Third, Canada should preserve its longstanding approach to exempting culture from the ambit of the trade agreement.

i.    Concern with Provisions Undermining Privacy and Security

The restriction against local data storage – often called data localization – originates from Silicon Valley tech company frustration with a growing number of governments that want local data to remain within their jurisdiction. The reason for data localization requirements typically stem from mounting concerns over U.S. surveillance activities and the power granted to U.S. law enforcement under laws such as the USA Patriot Act.

The combined effect of these U.S. laws is that many users fear that once their information is stored in the U.S., it will be accessible to U.S. authorities without suitable privacy protections or oversight. Since U.S. law provides less privacy protection to foreigners, there is indeed limited legal recourse for Canadian data held in the U.S.  Provinces such as British Columbia and Nova Scotia have enacted laws to keep government information (such as health data) within the country.

In response to the mounting public concerns, leading technology companies such as Microsoft, Amazon, and Google have established or committed to establish Canadian-based computer server facilities that can offer localization of information. These moves follow on the federal government’s 2016 cloud computing strategy that prioritizes privacy and security concerns by mandating that certain data be stored in Canada. The Canadian government should resist efforts within NAFTA to limit the ability of federal or provincial governments to establish legitimate privacy and security safeguards through data localization requirements.

Limitations on data transfer restrictions, which mandate the free flow of information on networks across borders, raises similar concerns. Those rules are important to preserve online freedoms in countries that have a history of cracking down on Internet speech, but in the Canadian context, could restrict the ability to establish privacy safeguards. In fact, should the European Union mandate data transfer restrictions as many experts expect, Canada could find itself between a proverbial privacy rock and a hard place, with the EU requiring restrictions and NAFTA prohibiting them. While the U.S. is seeking a ban on data transfer restrictions, Canada should ensure that privacy and security laws will not be superceded by NAFTA restrictions.

ii.    Higher Level Privacy Protections

Privacy protections are a key aspect of e-commerce, providing consumers with assurances that their personal information will be appropriately safeguarded. A renegotiated NAFTA should include a high level privacy protection requirement. The starting point for privacy protection in most countries is a national privacy law modeled on the OECD privacy principles. Enforcement measures are frequently handled by privacy or data protection commissioners with some form of enforcement powers as well as additional rules on issues such as mandatory disclosure of security breaches. A privacy requirement that extends beyond voluntary undertakings is essential for Canadians to have the necessary assurances that their information is properly protected and to place Canadian companies on a level playing field with their NAFTA counterparts.

NAFTA should also include mandatory anti-spam legislation as a national requirement. The provisions could specify that the law provide for a binding unsubscribe mechanism and an opt-in consent requirement, consistent with the Canadian anti-spam law. Other e-commerce laws, including consumer protection requirements and electronic contracting provisions, would be suitable for inclusion in an e-commerce chapter.

iii.    Culture Exemption

While Canadian trade policy has long exempted cultural regulation from trade agreements, the TPP included notable exceptions. One involved restrictions on “discriminatory requirements on services suppliers or investors to make financial contributions for Canadian content development.” The USTR NAFTA priorities raises the prospect of bringing back a similar provision.

The exception may be limited to “discriminatory” requirements, but currently exempt providers (such as online video services) could argue that the imposition any Canadian content contribution payments would be discriminatory against them, because they do not enjoy many of the protections and benefits that go to the Canadian companies that make Cancon contributions as part of a regulatory quid pro quo. This would include development funding, production funding, and multiple windows for achieving Cancon requirements.

Assuming those services argue that any mandated Cancon contribution is discriminatory if they do not also receive the benefits accorded to established broadcasters or broadcast distributors, the NAFTA could effectively ban applying Cancon contributions to exempt entities. Cultural policy is always fraught with difficult policy choices, but those choices should be conducted through domestic processes, not dictated by trade agreements.

The post My NAFTA Consultation Comments: Promoting Canadian Interests in the IP and E-commerce Chapters appeared first on Michael Geist.

Ignoring the Supreme Court: Federal Court Judge Hands Access Copyright Fair Dealing Victory

Michael Geist Law RSS Feed - Thu, 2017/07/13 - 08:01

For the past 13 years, Canadian copyright jurisprudence has followed a consistent trajectory. Starting with the Supreme Court of Canada’s CCH decision in 2004, Canadian courts and tribunals have affirmed the need for balance in copyright and the importance of user’s rights. That approach has been particularly evident in fair dealing cases. Much to the dismay of Access Copyright, from the Supreme Court’s 2012 copyright pentalogy cases (including Alberta v. Access Copyright and SOCAN v. Bell) to the Copyright Board’s rulings on copying in K-12 schools and governments to the Federal Court of Appeal (upholding the Copyright Board’s decisions), the courts have upheld the need for balance and a broad, liberal approach to fair dealing.

Yesterday, however, five years to the day of the release of the Supreme Court’s copyright pentalogy, Access Copyright found a willing taker for its legal arguments. Judge Michael Phelan of the Federal Court of Canada delivered a complete victory for the copyright collective, rejecting York University’s fair dealing approach and concluding that an interim tariff is mandatory and enforceable against the university. The immediate implications of the decision are significant: royalty payments to Access Copyright (that will likely be kept in escrow pending any appeals) and the prospect of other universities re-thinking their current copyright policies. The decision will also have an effect on the copyright review scheduled for later this year. With the court’s decision, there will be little reason to revisit the inclusion of the “education” purpose in fair dealing as it had no discernible impact on the court’s legal analysis.

While Access Copyright is understandably celebrating the outcome, this likely represents only the first step in a longer legal process. As with virtually all significant fair dealing cases, this one is surely headed to the Federal Court of Appeal and possibly the Supreme Court of Canada (Access Copyright would have undoubtedly appealed had the decision gone the other way). In this particular case, there are very strong grounds for appeal. This lengthy post focuses solely on the fair dealing analysis, which frequently diverges or simply ignores Supreme Court jurisprudence (there is important analysis needed on the flawed tariff discussion which also diverts from Supreme Court rulings, but this post is already too long).

The trial judge acknowledges the Supreme Court’s emphasis on user’s rights, but quickly downplays it by restricting the fair dealing analysis. The Supreme Court may have called for a large and liberal interpretation to fair dealing, but the trial judge, fresh off a similarly restrictive approach in United Airlines v. Cooperstock, holds a different view.

At the heart of the fair dealing discussion is the validity of York’s fair dealing guidelines. The Supreme Court in CCH stated the following with respect to fair dealing policies and practices:

is it incumbent on the Law Society to adduce evidence that every patron uses the material provided for in a fair dealing manner or can the Law Society rely on its general practice to establish fair dealing?  I conclude that the latter suffices. Section 29  of the Copyright Act  states that “[f]air dealing for the purpose of research or private study does not infringe copyright.” The language is general.  “Dealing” connotes not individual acts, but a practice or system.  This comports with the purpose of the fair dealing exception, which is to ensure that users are not unduly restricted in their ability to use and disseminate copyrighted works. Persons or institutions relying on the s. 29  fair dealing exception need only prove that their own dealings with copyrighted works were for the purpose of research or private study and were fair.  They may do this either by showing that their own practices and policies were research-based and fair, or by showing that all individual dealings with the materials were in fact research-based and fair.

The trial judge expands this by stating:

The jurisprudence permits the fairness assessment to be done on the basis of individual dealing as well as on the basis of policies and/or practices (CCH at para 63). As was also made clear in CCH, the fairness assessment looks at the text of the policies, the rationale for the policies, and the practical or real dealing by the users of the owners’ works. Both the Guidelines themselves and the practices under the Guidelines must be fair.

In his general comments on the York fair dealing guidelines, he appears to conclude that they were unfair for reasons that have little to do with the six factor test established by the Supreme Court. The trial judge’s reasoning points to multiple locations for copying (something that also occurs in the Alberta case and seems irrelevant), claims that there was enforcement of policies by librarians in CCH but none at York (as if the Treasurer of the Law Society oversaw copying there), single vs. multiple copies (which the Supreme Court had little trouble concluding was acceptable in Alberta), “ad hoc copying vs. systemic copying”, and the impact on publishers (more on that below).

After the general comments, the trial judge proceeds to engage in a more detailed fair dealing analysis, but it is frequently at odds with Supreme Court jurisprudence.  A discussion of the six factors follows below:

i.    Purpose of the Dealing

If any of the six factors should have been a slam dunk for York, it is the purpose of the dealing. In Alberta, the Supreme Court addressed the question of whose purpose is relevant, stating:

fair dealing is a “user’s right”, and the relevant perspective when considering whether the dealing is for an allowable purpose under the first stage of CCH is that of the user (CCH, at paras. 48 and 64).  This does not mean, however, that the copier’s purpose is irrelevant at the fairness stage.  If, as in the “course pack” cases, the copier hides behind the shield of the user’s allowable purpose in order to engage in a separate purpose that tends to make the dealing unfair, that separate purpose will also be relevant to the fairness analysis.

In the case before us, however, there is no such separate purpose on the part of the teacher.  Teachers have no ulterior motive when providing copies to students.  Nor can teachers be characterized as having the completely separate purpose of “instruction”; they are there to facilitate the students’ research and private study.  It seems to me to be axiomatic that most students lack the expertise to find or request the materials required for their own research and private study, and rely on the guidance of their teachers.  They study what they are told to study, and the teacher’s purpose in providing copies is to enable the students to have the material they need for the purpose of studying.  The teacher/copier therefore shares a symbiotic purpose with the student/user who is engaging in research or private study.  Instruction and research/private study are, in the school context, tautological.

The Supreme Court rules that there is no separate purpose for student and teacher.  Yet the trial judge opens his analysis by stating:

In this case, there are two users – the university which is assembling material, copying, and distributing the material as the publisher, and the student who is the end user of the material.

It is as if the Supreme Court Alberta decision did not exist. The court was clear: coursepacks are developed by teachers for their students and the copying that occurs is for the purpose of education, research, and private study.

Incredibly, the trial judge finds that York’s purpose was to facilitate student enrolment through reduced costs:

It is evident that York created the Guidelines and operated under them primarily to obtain for free that which they had previously paid for. One may legitimately ask how such “works for free” could be fair if fairness encompasses more than one person’s unilateral benefit. The goal of the dealing was multifaceted. Education was a principal goal, specifically education for end user. But the goal of the dealing was also, from York’s perspective, to keep enrolment up by keeping student costs down and to use whatever savings there may be in other parts of the university’s operation.

In this case, as in Alberta, the trial judge should have found that there is no separate purpose.  The fair dealing is the students’ users’ right and the purpose clearly permissible. Further, even if focused on York’s purpose, the characterization of it as cost savings to drive enrolment is hard to square with the Supreme Court’s CCH decision, which was comfortable with the fair dealing of commercial copying on behalf the legal profession.

ii.    Character of the Dealing

The character of the dealing involves a quantification of the total amount copied. The trial judge concluded that this was less fair, despite admitting that the data provided by both sides in the case was unreliable.

iii.    Amount of the Dealing

The amount of the dealing was clearly the crucial factor for the trial judge. However, his analysis simply does not comport with the Supreme Court caselaw. For example, he states the following with respect to the aggregate amount of copying and the impact of the fair dealing guidelines:

“It is relevant to consider the aggregate volume of copying by all post-secondary institutions that would be allowed if the Guidelines or similar policies were adopted. There is a problem with the current data because of unreported copying. However, when all such institutions were licensed, they produced 120 million exposures of published works per year in printed coursepacks alone.”

Yet the SCC says the opposite with respect to the relevance of the aggregate amount of copying. In Alberta:

as discussed in the companion case SOCAN v. Bell, the “amount” factor is not a quantitative assessment based on aggregate use, it is an examination of the proportion between the excerpted copy and the entire work, not the overall quantity of what is disseminated.

In the SOCAN case:

SOCAN argued, however, that the proportion of the preview in relation to the length of the whole musical work was not the proper measure, and that the Board should have considered instead the aggregate number of previews that are streamed by consumers.  Since the evidence showed that each user, on average, listened to 10 previews before purchasing a musical work for download, the overall amount of time spent listening to previews was so large that the dealing was unfair.  SOCAN saw this factor as determinative in this case.

There is no doubt that the aggregate quantity of music heard through previews is significant, but SOCAN’s argument conflicts with the Court’s statement in CCH that “amount” means the “quantity of the work taken” (para. 56).  Since fair dealing is a “user’s” right, the “amount of the dealing” factor should be assessed based on the individual use, not the amount of the dealing in the aggregate.  The appropriate measure under this factor is therefore, as the Board noted, the proportion of the excerpt used in relation to the whole work.  That, it seems to me, is consistent with the Court’s approach in CCH, where it considered the Great Library’s dealings by looking at its practices as they related to specific works requested by individual patrons, not at the total number of patrons or pages requested.  The “amount of the dealing” factor should therefore be assessed by looking at how each dealing occurs on an individual level, not on the aggregate use.

Moreover, the trial judge rather remarkably almost entirely discounts the millions of dollars spent by the university on licensing and permissions in considering the amount of the copying. He states:

York has argued that because it has separate licences and permissions, the amount of copying at issue is reduced. However, York has conceded that its evidence on licensing information is inaccurate and its ability to marry up copies with the relevant licence or permission is impossible to rely upon.

The judge engaged in no such analysis of the Access Copyright repertoire, which is suspect given the recent Copyright Board of Canada decision that questioned the repertoire. Yet even beyond the issue of the Access Copyright repertoire, the reasonableness of the guidelines should surely have considered the massive amount of licensed content and the ready availability of openly licensed content.  The judge’s conclusion seem to suggest that even when the copying is expressly permitted without the need for a licence – for example, open access materials – that that permitted copying somehow does not count.  Since the Access Copyright licence only applies where other licences, permissions or exceptions do not, that cannot be correct.

The trial judge was also taken by the possibility of copying multiple chapters out of the same book.  For example, he states:

referring in argument and questioning to Margaret MacMillan’s superb book Paris 1919: Six Months That Changed the World, numerous chapters could individually be segregated for use in different courses, effectively eviscerating the copyright protection on the book.

The trial judge again mistakes who benefits from the copying under fair dealing.  It is the student copying one chapter, not the institution copying multiple chapters on behalf of many students. Further, the trial judge is bothered that:

To the consideration of this form of overcoming copyright must be added the matter of compound copying as demonstrated by Access. Not only are the works copied in whole, but they are also copied multiple times.

Yet the Supreme Court left no doubt: “teachers do not make multiple copies of the class set for their own use, they make them for the use of the students.” Each student is entitled to exercise their fair dealing rights, which are lost under the trial judge’s interpretation of fair dealing.

The trial judge argues that the unfairness is exacerbated by the lack of compliance monitoring:

The unfairness evident in this part of the six-factor exercise is compounded by the absence of any meaningful control over the portions of publications copied or any monitoring of compliance, be it pre- or post-copying, which also serves to render the thresholds largely meaningless.

But in the CCH case the Supreme Court ruled that:

a person does not authorize copyright infringement by authorizing the mere use of equipment (such as photocopiers) that could be used to infringe copyright.  In fact, courts should presume that a person who authorizes an activity does so only so far as it is in accordance with the law.  Although the Court of Appeal assumed that the photocopiers were being used to infringe copyright, I think it is equally plausible that the patrons using the machines were doing so in a lawful manner.

While the CCH discussion involves the availability of photocopiers, the rationale applies in similar fashion. The Supreme Court has never injected a control or monitoring requirement in order to qualify for fair dealing, something that the trial judge seems to do here.

Finally, the trial judge puzzlingly states that “some consideration is to be given to the importance of the work” as part of the amount of the dealing.  He proceeds to conclude that a single chapter is significant to the work. Yet the “nature of the work” fair dealing factor already considers this issue and the overlap into amount is inconsistent with the test established by the Supreme Court.

iv.    Alternatives to the Dealing

Given that the Supreme Court of Canada has ruled that neither the availability of a licence nor the prospect of buying books for every student of every copied work is a realistic alternative, this factor should have easily sided toward fairness. Indeed, the trial judge admits that it should favour York:

While as a general principle this factor favours York and its asserted fairness, the level of fairness is diminished because York has not actively engaged in the consideration or use of alternatives which exist or are in development.

Yet the trial judge downplays the factor by pointing to other alternatives such as licensing chapter or purchasing more books. In other words, after stating that the Supreme Court had ruled that licenses and book purchases are not realistic alternatives, the trial judge argues that not pursuing those alternatives (as well as ones that do not even exist) lessens the fairness of the dealing.

v.    Nature of the Work

The nature of the work speaks to its value and importance and whether it should be widely disseminated. The trial judge emphasizes the value of the works and dismisses the role that fair dealing guidelines play in increasing their dissemination. For the trial judge, fair dealing guidelines are not about dissemination:

The Guidelines are not established to motivate dissemination. There is no evidence that these professional writers and publishers need the Guidelines to assist in the dissemination of their works. Dissemination may improve because under the Guidelines the works are free, but the same can be said of any goods or services that are provided for free.

The Supreme Court ruled in CCH that wider public dissemination is one of the goals of copyright law. Yet the trial judge seemingly rejects the role that fair dealing can play in dissemination of works, counter to the copyright balance articulated by Canada’s highest court.

vi.    Effect of the Dealing on the Work

The effect of the dealing on the work examines the economic impact of the copying. The Supreme Court has been careful to require actual evidence in order to reach a finding on the factor. In CCH it found that no evidence had been tendered:

Another consideration is that no evidence was tendered to show that the market for the publishers’ works had decreased as a result of these copies having been made.  Although the burden of proving fair dealing lies with the Law Society, it lacked access to evidence about the effect of the dealing on the publishers’ markets.

In Alberta, the Supreme Court’s discussion on the same issue:

Access Copyright pointed out that textbook sales had shrunk over 30 percent in 20 years.  However, as noted by the Coalition, there was no evidence that this decline was linked to photocopying done by teachers.  Moreover, it noted that there were several other factors that were likely to have contributed to the decline in sales, such as the adoption of semester teaching, a decrease in registrations, the longer lifespan of textbooks, increased use of the Internet and other electronic tools, and more resource-based learning...

In CCH, the Court concluded that since no evidence had been tendered by the publishers of legal works to show that the market for the works had decreased as a result of the copies made by the Great Library, the detrimental impact had not been demonstrated.  Similarly, other than the bald fact of a decline in sales over 20 years, there is no evidence from Access Copyright demonstrating any link between photocopying short excerpts and the decline in textbook sales.

The limited evidence in this case is apparent from the trial judge’s discussion of the expert evidence. Access Copyright’s own expert (drawing from the PWC report that contains a limitation warning that “we provide no opinion, attestation or other form of assurance with respect to the results of this Assessment” and which admits that “substantial qualitative data regarding the majority of the economic impacts is not yet available”) identified the following factors at work:

The educational publishing industry has historically been large and profitable, but revenues and margins are facing increasing pressure from alternative sources of content.
– The options available for students to obtain materials have increased. Students may buy used, rent or borrow textbooks, purchase electronic versions, or download materials legally and illegally. Students have reduced their total spending on course materials.
– The transition to a digital marketplace presents challenges and opportunities. New participants are interrupting a mature industry which previously enjoyed high barriers to entry.
– Guidance on fair dealing in key court decisions in 2012 led to the development of a series of fair dealing guidelines.

Yet despite the limited evidence and the Supreme Court jurisprudence, the trial judge states:

I agree with Access that in considering the “effect of the dealing” as part of the Court’s overall assessment of fairness, the Court should consider all actual and likely impacts on all original content contributors

Considering “likely” impacts is precisely what the Supreme Court has declined to do. The trial judge ventures beyond actual evidence of harm to “likely” impacts, which is not consistent with prior jurisprudence.

In fact, it would appear that there is only one metric that matters for the trial judge:

under the prior circumstances, the creators and publishers were paid. The loss of revenue to Access is an appropriate surrogate for the nature and quantity of copying and for the negative impacts.

In other words, all the evidence of a changing industry, open access, hundreds of millions on licensing, and transactional licenses do not matter. What matters to the trial judge is that Access Copyright, one of many intermediaries for authors, is generating less revenue. That conclusion is a striking rejection of the Supreme Court’s careful approach to economic evidence in fair dealing cases.

What Comes Next?

As noted above, the case is likely to be appealed as the trial judge’s analysis of fair dealing is inconsistent with Supreme Court of Canada jurisprudence. The Supreme Court’s emphasis on copyright balance, user’s rights, and a large and liberal interpretation to fair dealing, are largely missing from the ruling. In its place, the trial judge injects claims of boosting enrolment as York’s purpose of copying, cites aggregate copying for the amount of the dealing, and relies on “likely” impact for the effect of the copying on the work. None of these positions reflect Canadian copyright law as articulated in the leading decisions.

In addition to an appeal, the case should also have a significant impact on the copyright review scheduled for later this year. The inclusion of “education” as a fair dealing purpose played little role in this decision and with the case likely before the courts, the government has no reason to intervene with premature and unnecessary legislative reforms.

The post Ignoring the Supreme Court: Federal Court Judge Hands Access Copyright Fair Dealing Victory appeared first on Michael Geist.

Toward an Open and Innovative Internet: What Lies Behind Canada’s Net Neutrality Success Story

Michael Geist Law RSS Feed - Wed, 2017/07/12 - 08:31

Today is net neutrality day of action in the United States, a day of advocacy and awareness that brings together hundreds of leading Internet companies and public interest groups. It is an important reminder that the principle of an open, neutral Internet is under threat there due to dramatic shifts in policy driven by the Trump Administration and changes at the Federal Communications Commission. While U.S. rules undoubtedly have an impact on Canada – the viability of new innovative Internet businesses that might enter the Canadian market is linked to rules that ensure that Internet providers do not use their privileged position to favour some applications and services over others – the political and regulatory situation between the two countries is dramatically different.

The Liberal government has been a staunch supporter of net neutrality, regularly citing its importance. For example, Budget 2017 referenced the need to “benefit from an open and innovative Internet” and Innovation, Science and Economic Development Minister Navdeep Bains has emphasized the value of an open Internet in discussing telecom policy. When the Province of Quebec’s unveiled plans to mandate blocking of unlicensed gambling websites, Canadian Heritage Minister Melanie Joly responded by focusing on the need for net neutrality and the equal treatment of Internet content.

The government’s support for net neutrality is consistent with the regulatory framework crafted by the CRTC that features safeguards against unjust discrimination, undue preferences or controlling the content of communications. The foundation of Canadian policy lies in four CRTC decisions that address practices such as managing Internet traffic to limit speeds for some applications or creating pricing plans that “zero rate” certain content that does not count as part of monthly data consumption caps.

The CRTC’s first net neutrality policy response in 2009 on Internet traffic management practices restrict content blocking or slowdowns and require ISPs to disclose how they manage their networks. The issue expanded into zero rating in 2013 when Ben Klass, a graduate student in telecommunications, filed a complaint with the CRTC over how Bell approach to its Mobile TV product. In January 2015, the CRTC released its decision in the case, siding with Klass. The Commission expressed concern that the service “may end up inhibiting the introduction and growth of other mobile TV services accessed over the Internet, which reduces innovation and consumer choice.”

Earlier this year, the CRTC largely completed the process by establishing a framework for examining future zero rating or preferential pricing cases (and rejecting Videotron’s music service plan in an accompanying decision). The Commission concluded that zero rating raises concerns regarding preferences or disadvantages:

differential pricing practices, generally speaking, result in (a) a preference toward certain subscribers over others, (b) a preference toward certain content providers over others, (c) a disadvantage to subscribers who are not eligible for, or interested in, a differential pricing practice offering, and (d) a disadvantage to content providers that are not eligible for, or included in, an offering.

The CRTC noted that differential pricing practices that favour particular services, technology, content would generally negatively affect innovation.  Further, the Commission was mindful of what consumer groups and pro-net neutrality advocates warned about the impact on consumer choice:

The Commission considers that any short-term benefits of differential pricing practices would be greatly outweighed by the negative long-term impacts on consumer choice if ISPs were to act as gatekeepers of content through their use of such practices

The CRTC proceeded to establish a framework that bears considerable similarity to its 2009 ITMP approach. It features a complaints-based mechanism that can lead to an evaluation of whether the differential pricing is compliant with the law. The evaluation criteria involves four issues: agnostic treatment of data, exclusiveness of the offering, impact on Internet openness and innovation, and whether financial compensation is involved.

Soon after the decision, Videotron announced that it would respond in a manner consistent with what net neutrality advocates predicted: it would increase the amount of data available to subscribers of its zero rated music service. That approach reflects the European experience which shows that providers that do not zero rate offer better prices and larger data allowances.

The Canadian net neutrality success story is notable for how the government, regulator, many companies (including more recently larger providers such as Rogers and TekSavvy), and the public have supported net neutrality policies. Yet what lies behind the policies are also the real-world net neutrality threats that have emerged over the past decade. Indeed, claims that the policies are a solution in search of a problem ignore the many incidents that have required regulatory or political intervention. Whether website blocking (Telus’ infamous blocking of the Voices for Change site, Quebec’s online gambling blocking legislation), traffic throttling (including Rogers and World of Warcraft, Xplornet slowing speeds on Google Play store), zero rating plans with potential negative competitive effects (Bell, Videotron), or creator groups musing about prioritizing Cancon on the Internet, defending net neutrality principles has required active monitoring by Internet users and vigilance at the regulator.

Canadians should take pride in the evolution of our regulatory framework but also use net neutrality day of action as a reminder that in a market marked by insufficient competition, the pressure to relax or reverse net neutrality safeguards could resurface, particularly with the upcoming appointment of a new CRTC chair or with the planned reform of the Broadcasting and Telecommunications Acts.

The post Toward an Open and Innovative Internet: What Lies Behind Canada’s Net Neutrality Success Story appeared first on Michael Geist.

now what?

Fair Duty by Meera Nair - Sat, 2017/07/01 - 23:00

The Day is done; candles have been blown out in some quarters, tears continue to be shed in others. 150 years of something–whether it is the lifetime of Canada or a chapter in millennia of a First Nation–has been duly marked/celebrated/decried. Now what?

In terms of copyright, we can expect continued calls for stronger copyright to better support Canadian writers. Ignored will be the detail of copyright deficit–that more control invariably means more Canadian dollars going to non-Canadian entities. Also omitted will be any hint that such calls have been in existence for the entirety of Canadian autonomy with respect to copyright, with no appreciable denting of that deficit to show for it. That copyright alone cannot be the salvation of Canadian culture (assuming that our culture is under threat) will also be absent from discussion.

Perhaps we could set aside copyright for a moment and think about that word: culture. Described by Raymond Williams as one of the most complicated words in the English language, it spans the entirety of our collective lived experiences.

Through the past 150 years, Canada has only too often demonstrated narrow-minded thought. Beginning with an unapologetic objective to rid the country of indigenous people,* followed by the Chinese Head Tax, the Komagata Maru, the internment of Japanese Canadians, the rejection of Jewish refugees, … . The situation for visible minorities improved somewhat in the later 20th century, with racism taking on a slightly more polite tone. (Although, children of colour attending school in the ’70s will likely have evidence to the contrary.) And it is difficult to forget the national indifference to the tragedy of Air India Flight 182 in 1985.

Yet Canada has developed a credible capacity, not merely to mouth the importance of protecting minority rights, but to actively encourage the virtue of diversity. The underlying theme for the last 30 years or so is that we are all in this together and we all do better together. Some pride is warranted; it has been possible to find unity without imposing uniformity. But can this be sustained, or is the best of Canada behind us?

Paula Simons, writing for the Edmonton Journal, reminds us not to rest on our laurels. That systemic racism is still part of our landscape, and extremism is on the rise: “for all our lauded tolerance, this was also the year when six peaceable Canadians, at prayer in a Sainte-Foy neighbourhood mosque, were shot in the back and killed in the midst of their devotions.”

With an eye to building on the effort of our prior angels, to what extent are we aware of our collective history? Is that history within reach of all Canadians? In this regard, copyright cannot be ignored. Two proposals come to  mind; one is already underway, the other I offer as an idea.

1) For years, Amanda Wakaruk (copyright librarian for University of Alberta) has publicized the challenges inherent to maintaining accurate information about Canada as a whole, due to the archaic practice of Crown copyright. In her capacity as a private citizen, she has introduced a petition Fix Crown Copyright:

Decades of stakeholder requests to abolish or at least update the Crown copyright provision in the Copyright Act have been largely ignored. This has resulted in a barrier to the re-use of government publications prepared for and paid for by Canadian taxpayers. For example, the refusal of government departments to allow for the copying of content made freely available on their web sites, and then deleted from those same sites, resulted in the loss of countless digital government works in recent years. (Note that very few government publications continue to be produced in paper.)

Removing copyright protection from government works made available to the public will allow individuals, corporations, and other organizations to make better use of these important resources. It will also allow librarians to continue their role as stewards of government information in a digital world. …

The petition will remain open until 23 September 2017.

2) Volumes of scholarship about Canada are, for the most part, confined to the university community. Painstaking explorations that uncover the past, both its pain and glory, are not easily available to the Canadian reader who wishes to learn more.

For instance, I recently sought two books published by University of Toronto Press: (i) The Man from Halifax: Sir John Thompson, Prime Minister (1985) by P.B. Waite; and (ii) Essays on the Constitution: Aspects of Canadian law and politics (1977) by Frank R. Scott. Both are rich in their contribution to understanding the past, both could be staple reading for anyone interested in the idea and existence of Canada. But neither can be easily purchased (the odd copy may exist in a few select used-bookstores) and both have limited visibility in university libraries.

We cannot fault any publisher for letting production lapse when there is no market. And yet these are quintessentially Canadian books; written by Canadians, issued by a Canadian press, and intended without embarrassment as expressly for Canadian readers. Which raises the question: when such books are no longer actively produced or peddled for sale, can they not be made widely and freely available via an open license?

A requirement of an academic appointment is to engage in scholarly effort; to that end, scholars enjoy publicly funded salaries and research grants. With respect to publication, university presses are eligible for support from the Canada Book Fund. University libraries then pour more money into the purchase of information resources; data collected for 29 university libraries show aggregate spending in 2014-2015 as $305,046,488 (see page 4 here). Between government provision of public money, and university spending thereof, could some funds be set aside to convert old printed books into ebooks?

This does not require a change to the system of copyright–it requires consent from copyright owners of existing content, and, cooperation from institutions  If consent is given, and if institutions would share the necessary costs of labour and money, more Canadian content could reach more Canadian readers.

Copyright maximalists constantly tell us that Canadian culture is near death–that Canadian themed content will cease to be written unless copyright is strengthened. They neglect to point out how much existing Canadian content cannot be read at all.

* Roberta Jamieson, featured on CBC Ideas for 30 June 2017, pulled no punches in her telling of the past 150 years. And yet, offers much optimism for the road ahead.


Federal Court of Appeal Deals Music Labels Major Defeat By Upholding Tariff 8 Internet Streaming Decision

Michael Geist Law RSS Feed - Thu, 2017/06/29 - 10:20

Few Copyright Board of Canada decisions have elicited as much anger from the music industry as the 2014 Tariff 8 decision. The decision relied on commercial radio rates as the barometer, which seemed appropriate given the similarities between Internet streaming services that do not allow users to select specific songs and commercial radio stations that play a regular music rotation. Music Canada and its allies disagreed, launching a major campaign against the decision, which it said resulted in 10 percent of nothing. The industry was particularly upset that the rates were lower than the U.S. (due to international copyright obligations, the Canadian repertoire during the period of the tariff was about the half as large as the U.S. one). The industry appealed the decision with considerable fanfare, promoting the many groups that joined in the action.

In the period since the decision, there have been some notable developments. Internet streaming is now generating huge revenues for the industry with Canada leaping ahead of Australia last year to become the 6th largest music market in the world and SOCAN generating record revenues. Further, Music Canada turned its focus to Copyright Board reform, spurring a short Senate study on the issue and making it one of its top priorities for the upcoming copyright review.

As this was happening, the case before the Federal Court of Appeal remained undecided. That changed yesterday as hours after the Supreme Court released the Equustek decision, the FCA issued its judicial review decision, unanimously dismissing the industry’s arguments and upholding the Copyright Board’s decision as reasonable.

Much of the decision examines the standard of review in cases involving the Copyright Board. The ruling carefully canvasses the requisite standard, the deference owed to the Board, as well as its work and legal analysis. The court strongly affirms the reasonableness of the result, rejecting arguments that it failed to consider some evidence or that it was bound by market rates. As part of its analysis, the court emphasized the need for balance in copyright:

Even before the Supreme Court’s decision in SODRAC, it was well settled that the dual purposes of the Copyright Act – encouraging creativity and providing reasonable access to the fruits of creative endeavour – require careful balancing of user and creator rights.

It then concluded that the Board’s focus on the value of sound recordings – rather than the cost of input – is consistent with that balance (citing one of Parliamentary Secretary David Lametti’s articles written before being elected). It added:

if we protect works for their value and their value is not correlated to their input costs, the purposes of copyright – which are articulated in the principle of balance – do not require those costs to be considered. It was thus reasonably open to the Board to ignore these costs in its analysis.

The decision is not a surprise (I noted there were ample justifications for the outcome when it was released). Moreover, the campaign against the decision caught the attention of former Board chair William Vancise, who told a copyright conference last year:

Let me say that I found it completely unacceptable and totally inappropriate for such an association to lobby the Chairman of the Board, an independent quasi-judicial tribunal- and I am certainly not alone in this view. It showed a lack of respect for the institution. The proper forum for dealing with a decision that Music Canada’s clients don’t like is to take it to judicial review. I can go on at great length on the lobbying efforts of Music Canada but I think you get the picture. The real reason for the outrage is not so much its concern for the purity of the process or consistency in decision-making but rather the fact that Music Canada doesn’t like the tariff. It’s a question of whose ox is being gored.

Having now lost the judicial review and earned sharp criticism from Vancise, the music labels are left with few options other than a long-shot appeal to the Supreme Court and an acceleration of the campaign to overhaul the Board during the 2017 copyright review.

The post Federal Court of Appeal Deals Music Labels Major Defeat By Upholding Tariff 8 Internet Streaming Decision appeared first on Michael Geist.

No Monitoring & No Liability: What the Supreme Court’s Google v. Equustek Decision Does Not Do

Michael Geist Law RSS Feed - Thu, 2017/06/29 - 09:07

The release of the Supreme Court of Canada’s Google v. Equustek decision attracted global attention with many rightly focused on the implications of global takedown orders for freedom of speech online (my post on the case here, Daphne Keller, EFF, Howard Knopf, Techdirt). The decision raises serious concerns as it invites courts around the world to issue global takedown orders that will likely lead to increased incidents of legal conflicts. That could vest enormous power in the hands of intermediaries such as Google, which will either remove links to content that is lawful in some countries or pick and choose among the orders they are willing to follow.

The music industry was unsurprisingly elated at the decision, rushing out a press release welcoming the ruling. Canada is already home to some of the toughest anti-piracy laws in the world including an “enabler provision” that establishes the legal tools to target sites that facilitate infringement. The prospect of global takedown orders of search results could lead to a steady stream of cases before Canadians courts with the industry using the Equustek case to target links to foreign-based sites.

While that is a troubling proposition, the industry has tried to suggest that the decision went even further. The Music Canada press release quotes President and CEO Graham Henderson:

Today’s decision confirms that online service providers cannot turn a blind eye to illegal activity that they facilitate; on the contrary, they have an affirmative duty to take steps to prevent the Internet from becoming a black market.

Yet the Supreme Court said no such thing. In fact, the majority stated precisely the opposite, emphasizing that there was no obligation to monitor content and no liability for facilitating access. The court states at paragraph 49:

The injunction does not require Google to monitor content on the Internet, nor is it a finding of any sort of liability against Google for facilitating access to the impugned websites.

The music industry may have wanted the Supreme Court of Canada to establish an affirmative duty on Google to monitor content, but the ruling is unequivocal that there is no such requirement as a result of the Equustek decision.

The post No Monitoring & No Liability: What the Supreme Court’s Google v. Equustek Decision Does Not Do appeared first on Michael Geist.

Global Internet Takedown Orders Come to Canada: Supreme Court Upholds International Removal of Google Search Results

Michael Geist Law RSS Feed - Wed, 2017/06/28 - 11:10

The Supreme Court of Canada released its much-anticipated Google v. Equustek decision today, upholding the validity of an injunction requiring Google to remove search results on an international basis.  The 7-2 decision (Justices Côté and Rowe dissented, finding that there were alternatives available, the order is ineffective, and expressing concern that the “temporary” injunction was effectively permanent) is not a surprise – last week’s Facebook’s decision suggested a willingness to side with the weaker Canadian litigant against Internet giants – but the decision will ultimately grant Google more power, not less.

Google will obviously abide the ruling, but as I noted last year, what happens if a Chinese court orders it to remove Taiwanese sites from the index? Or if an Iranian court orders it to remove gay and lesbian sites from the index? Since local content laws differ from country to country, there is a great likelihood of conflicts. That leaves two possible problematic outcomes: local courts deciding what others can access online or companies such as Google selectively deciding which rules they wish to follow. The Supreme Court of Canada did not address the broader implications of the decision, content to limit its reasoning to the need to address the harm being sustained by a Canadian company, the limited harm or burden to Google, and the ease with which potential conflicts could be addressed by adjusting the global takedown order. In doing so, it invites more global takedowns without requiring those seeking takedowns to identify potential conflicts or assess the implications in other countries.

This case stems from claims by Equustek, a Canadian company, that another company used its trade secrets to create a competing product and engaged in misleading tactics to trick users into purchasing it. After struggling to get the offending company’s website taken offline, Equustek obtained a British Columbia court order requiring Google to remove the site from its search index. Google voluntarily removed search results for the site from Google.ca search results, but was unwilling to block the sites from its worldwide index. The B.C. court affirmed that the order applied on an international basis, however, issuing what amounted to global takedown order. The case then proceeded to the Supreme Court of Canada.

The Supreme Court’s majority decision was written by Justice Abella, who framed the case as follows:

“The issue in this appeal is whether Google can be ordered, pending a trial, to globally de-index the websites of a company which, in breach of several court orders, is using those websites to unlawfully sell the intellectual property of another company.”

Characterized that way, the outcome to uphold the order is no surprise. As the dissent notes, this is likely a permanent order, not a temporary one. Further, “selling the IP of another company” is an odd way of referencing the sale competing products that used trade secrets.

Justice Abella proceeds to analyze the law of injunctions, but for Internet watchers, the key aspects of the ruling come with the discussion of the Internet implications. The decision acknowledges the challenge of a global Internet order, but concludes that an international takedown is necessary to provide the Canadian company with an effective remedy:

“The problem in this case is occurring online and globally. The Internet has no borders — its natural habitat is global. The only way to ensure that the interlocutory injunction attained its objective was to have it apply where Google operates — globally. As Fenlon J. found, the majority of Datalink’s sales take place outside Canada. If the injunction were restricted to Canada alone or to google.ca, as Google suggests it should have been, the remedy would be deprived of its intended ability to prevent irreparable harm. Purchasers outside Canada could easily continue purchasing from Datalink’s websites, and Canadian purchasers could easily find Datalink’s websites even if those websites were de-indexed on google.ca. Google would still be facilitating Datalink’s breach of the court’s order which had prohibited it from carrying on business on the Internet. There is no equity in ordering an interlocutory injunction which has no realistic prospect of preventing irreparable harm.”

The majority was not persuaded by concerns about potential legal conflicts of a global takedown order, characterizing them as “theoretical” and indicating that it would be unfair to place the onus on Equustek to determine whether the order would be legally permissible in the other countries.

“Google’s argument that a global injunction violates international comity because it is possible that the order could not have been obtained in a foreign jurisdiction, or that to comply with it would result in Google violating the laws of that jurisdiction is, with respect, theoretical. As Fenlon J. noted, “Google acknowledges that most countries will likely recognize intellectual property rights and view the selling of pirated products as a legal wrong”

In the absence of an evidentiary foundation, and given Google’s right to seek a rectifying order, it hardly seems equitable to deny Equustek the extraterritorial scope it needs to make the remedy effective, or even to put the onus on it to demonstrate, country by country, where such an order is legally permissible. We are dealing with the Internet after all, and the balance of convenience test has to take full account of its inevitable extraterritorial reach when injunctive relief is being sought against an entity like Google.”

This is a key aspect of the decision as the court has effectively concluded that those seeking global takedown orders do not need to canvass the laws in other countries to consider the potential for conflicts with their request. In doing so, it places the obligation on intermediaries such as Google and increases the likelihood that those companies will pick and choose among the orders they are willing to follow.

The majority also concludes that responding to a global takedown will not interfere with Google’s neutral character in providing search results nor that it involves a significant inconvenience:

“I have trouble seeing how this interferes with what Google refers to as its content neutral character. The injunction does not require Google to monitor content on the Internet, nor is it a finding of any sort of liability against Google for facilitating access to the impugned websites. As for the balance of convenience, the only obligation the interlocutory injunction creates is for Google to de-index the Datalink websites. The order is, as Fenlon J. observed, “only a slight expansion on the removal of individual URLs, which Google agreed to do voluntarily”. Even if it could be said that the injunction engages freedom of expression issues, this is far outweighed by the need to prevent the irreparable harm that would result from Google’s facilitating Datalink’s breach of court orders.

Google did not suggest that it would be inconvenienced in any material way, or would incur any significant expense, in de-indexing the Datalink websites. It acknowledges, fairly, that it can, and often does, exactly what is being asked of it in this case, that is, alter search results. It does so to avoid generating links to child pornography and websites containing “hate speech”. It also complies with notices it receives under the US Digital Millennium Copyright Act, Pub. L. No. 105-304, 112 Stat. 2680 (1998) to de-index content from its search results that allegedly infringes copyright, and removes websites that are subject to court orders.”

Of course, the inconvenience does not come from the technical side of removing search results, which is indeed trivial. The real inconvenience comes from conflict of laws and the potential for global takedown orders coming from across the planet, thereby opening the door to other countries choosing what Canadians might be able to find in search results. Those issues – along with the need to identify the laws in other countries in order to avoid conflicts – do involve significant inconvenience and expense.

This last paragraph noting that Google already removes links to certain content (hate speech, child pornography, and copyright takedowns) highlights the cumulative effect of court decisions and regulations that individually may seem reasonable but which quickly move toward takedowns of all kinds. In fact, the majority cites the international support for Internet injunctions with global effect as a justification for its own order. The net result is the expectation of all countries and courts that they may issue global takedown orders regardless of the impact on Internet users outside the jurisdiction or on Internet intermediaries.

The dissent rests largely on three issues: the notion that the injunction is effectively permanent, its limited effectiveness, and the availability of alternatives. On the term of the injunction:

“In our view, granting of the Google Order further erodes any remaining incentive for Equustek to proceed with the underlying action. The effects of the Google Order are final in nature. Respectfully, the pending litigation assumed by our colleague Abella J. is a fiction. The Google Order, while interlocutory in form, is final in effect. Thus, it gives Equustek more relief than it sought.”

On effectiveness, the dissent states:

“The most that can be said is that the Google Order might reduce the harm to Equustek which Fenlon J. found “Google is inadvertently facilitating” (para. 152). But it has not been shown that the Google Order is effective in doing so. As Google points out, Datalink’s websites can be found using other search engines, links from other sites, bookmarks, email, social media, printed material, word-of-mouth, or other indirect means. Datalink’s websites are open for business on the Internet whether Google searches list them or not. In our view, this lack of effectiveness suggests restraint in granting the Google Order.”

Finally, on alternatives:

“In our view, Equustek has an alternative remedy in law. Datalink has assets in France. Equustek sought a world-wide Mareva injunction to freeze those assets, but the Court of Appeal for British Columbia urged Equustek to pursue a remedy in French courts: “At present, it appears that the proposed defendants reside in France . . . . The information before the Court is that French courts will assume jurisdiction and entertain an application to freeze the assets in that country” (2016 BCCA 190, 88 B.C.L.R. (5th) 168, at para. 24). We see no reason why Equustek cannot do what the Court of Appeal urged it to do. Equustek could also pursue injunctive relief against the ISPs, as was done in Cartier, in order to enforce the December 2012 Order. In addition, Equustek could initiate contempt proceedings in France or in any other jurisdiction with a link to the illegal websites.”

Internet jurisdiction has always presented an enormous challenge for courts and governments. Courts fear that if they are unable to assert jurisdiction, the Internet risks becoming a proverbial “Wild West” with no applicable law. It is not technically hard to comply with global court orders. The difficulty comes with the effects of the order, since if every court asserts jurisdiction, the online world becomes over-regulated with a myriad of potentially conflicting laws.

When it comes to Internet jurisdiction, exercising restraint and limiting the scope of court orders is likely to increase global respect for the law and the effectiveness of judicial decisions. Yet this decision demonstrates what many have feared: the temptation for courts will be to assert jurisdiction over online activities and leave it to the parties to sort out potential conflicts. In doing so, the Supreme Court of Canada has lent its support to global takedowns and vested more power in Internet intermediaries, who may increasingly emerge as the arbiters of which laws to follow online.

The post Global Internet Takedown Orders Come to Canada: Supreme Court Upholds International Removal of Google Search Results appeared first on Michael Geist.

Why Clicking “I Agree” May No Longer Mean You Agree to Everything

Michael Geist Law RSS Feed - Tue, 2017/06/27 - 16:27

Facebook lost a major legal showdown at the Supreme Court of Canada last week, as the court refused to enforce a forum selection clause included in its standard online contract requiring that legal actions against it be brought in California. In doing so, the court paved the way for a privacy class action lawsuit to proceed in British Columbia under provincial privacy law.

My Globe and Mail op-ed notes that a majority of the court ruled that the unequal bargaining power between consumers and companies such as Facebook meant that the clause should not be enforced. While the ruling can be narrowly interpreted as an affirmation of the importance of privacy rights and as a rebuke to companies that seek to contract out of those rights through forum selection clauses, the decision could have a far more reaching effect, forcing a re-examination of non-negotiated online contracts.

Courts have typically been reluctant to reject forum selection clauses, citing the importance of contractual certainty. The majority noted that there is another issue at play, however. Justice Rosalie Abella asked the question that many Canadians might ask when asked to click “I agree” on the myriad of Internet sites and services that foist lengthy contracts on their users on a take-it-or-leave-it basis:

“What does ‘consent’ mean when the agreement is said to be made by pressing a computer key? Can it realistically be said that the consumer turned his or her mind to all the terms and gave meaningful consent?”

The court’s willingness to question whether it is appropriate to uncritically enforce all the terms contained in online contracts opens the door to rethinking a longstanding e-commerce approach that imposed sophisticated commercial contracting standards on unwary consumers.

In the days before the Internet and digital commerce, consumers rarely entered into formal contracts with large companies when interacting with friends, making copies of photographs to give to family, or purchasing music, videos, or other media. The advent of digital technologies did more than just facilitate social media and new online services. It also brought with it Internet companies that mediated these activities governed by contracts that consumers were required to accept as condition for accessing the service.

The enforceability of these contracts has often been assumed, relying on e-commerce laws that confirmed the validity of the electronic contracting as well as traditional notions of offer and acceptance with consumers implicitly aware that their actions would be governed by the site or service terms of use. Yet these contracts were distinctly different from business-to-business commercial contracts that often involve painstaking negotiation and trade-offs that are well-understood by the parties. Consumers now enter into hundreds of online contracts that no one is expected to read from start to finish.

Indeed, with no ability to alter the terms or negotiate any changes, consumers have little incentive to read the fine print. The only alternative is to reject the service altogether, but for students required to use cloud-based services or digital textbooks, entertainment fans searching for legal alternatives to access content, and individuals wanting to participate in social networks with their peers, there is no genuine choice.

Canada’s highest court has now pulled back the veil on the not-so-secret side of Internet contracting. Far from being limited merely to obscure forum selection clauses, the Facebook ruling could be applied in other circumstances, such as attempts to sideline local consumer protection laws or override fair dealing rights by establishing contractual usage restrictions that run counter to the balance found in Canadian copyright law.

As Justice Abella noted, “when online consumer contracts of adhesion contain terms that unduly impede the ability of consumers to vindicate their rights in domestic courts, particularly their quasi-constitutional or constitutional rights, in my view, public policy concerns outweigh those favouring enforceability of a forum selection clause.”

Last week’s ruling rightly recognizes the dangers of uneven bargaining power in online contracts and the reality that consumers regularly click away their rights. By taking a strong stand against non-negotiated terms that place consumers at a significant disadvantage, the court has forced online companies to reconsider whether their agreements are fully enforceable and emboldened consumers to stand up for their rights.

The post Why Clicking “I Agree” May No Longer Mean You Agree to Everything appeared first on Michael Geist.

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