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

Michael Geist Law RSS Feed - 11 hours 30 min ago

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.

The post Google Files Suit in U.S. Court To Block Enforcement of Canadian Global Takedown Order appeared first on Michael Geist.

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.

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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.

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Supreme Court Rules Facebook Can’t Contract Out of B.C. Privacy Law

Michael Geist Law RSS Feed - Fri, 2017/06/23 - 11:02

The Supreme Court of Canada issued a landmark decision this morning on the enforceability of forum selection clauses in online contracts, rejecting Facebook’s effort to block a privacy class action lawsuit in British Columbia on the grounds that its own contract specified that legal actions be brought in California. A divided court ruled that the unequal bargaining power between consumers and companies such as Facebook – combined with the importance of privacy rights – meant that the clause should not be enforced and that the lawsuit should proceed in Canada.

The decision represents a clear recognition that courts should not be quick to allow companies to contract out of important rights by ousting local laws through forum selection clauses. More broadly, the terms found within non-negotiated take-it-or-leave it clickwrap contracts should not always be enforced by the courts, particularly where important rights or remedies might be lost by doing so. While forum selection clauses are an obvious mechanism for restricting rights, the reasoning might also be applied to other online contractual terms that seek to override important laws and protections. These could include contractual terms that seek to override copyright user rights such as fair dealing or local consumer safeguards.

The background of the case involves a privacy class action lawsuit over a Facebook “sponsored stories” program that no longer exists. The trial judge noted that the heart of the case is whether online terms and conditions override domestic legal protections (in this case, the B.C. Privacy Act). The trial court judge ruled that the terms did not, citing provisions in the B.C. Privacy Act that confer exclusive jurisdiction on the B.C. Supreme Court. The B.C. Court of Appeal rejected both the analysis of the BC Privacy Act and the broader public policy considerations of whether online terms should trump local law. The appeal court ruled that the Facebook terms were “valid, clear, and enforceable”. It then fell to the plaintiff to demonstrate why the court should decline to enforce the forum selection clause. The court cited as a possible example evidence that the case could not be heard in the California court (which would have the effect of creating a limitation of liability for Facebook). Without such evidence, the court ruled that the Facebook terms were binding. Moreover, it rejected the argument that the B.C. Privacy Act is intended to trump valid contracts.

The Supreme Court of Canada ruling overrules the B.C. Court of Appeal, holding that the forum selection clause was enforceable. The majority ruling comes from two written decisions:
Justices Karakatsanis, Wagner and Gascon writing one set of reasons and Justice Abella the other.

The Karakatsanis, Wagner and Gascon ruling emphasizes the uneven bargaining power between the parties:

The grossly uneven bargaining power between the parties and the importance of adjudicating quasi-constitutional privacy rights in the province are reasons of public policy that are compelling, and when considered together, are decisive in this case.

While supporters of online contracts frequently cite the need for certainty, the court notes that there may be other factors to consider (happily citing directly from the CIPPIC intervention):

Irrespective of the formal validity of the contract, the consumer context may provide strong reasons not to enforce forum selection clauses. For example, the unequal bargaining power of the parties and the rights that a consumer relinquishes under the contract, without any opportunity to negotiate, may provide compelling reasons for a court to exercise its discretion to deny a stay of proceedings, depending on the other circumstances of the case. And as one of the interveners argues, instead of supporting certainty and security, forum selection clauses in consumer contracts may do ‘the opposite for the millions of ordinary people who would not foresee or expect its implications and cannot be deemed to have undertaken sophisticated analysis of foreign legal systems prior to opening an online account’ (Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic Factum).

The majority concludes that Douez met the burden of establishing that there is strong cause not to enforce the forum selection clause. The reasons include unequal bargaining power and the importance of privacy as a quasi-constitutional right. On unequal bargaining power, they cite my colleague Marina Pavlović in stating:

Despite Facebook’s claim otherwise, it is clear from the evidence that there was gross inequality of bargaining power between the parties. Ms. Douez’s claim involves an online contract of adhesion formed between an individual and a multi-billion dollar corporation. The evidence on the record is that Facebook reported almost $4.28 billion in revenue in 2012 through advertising on its social media platform. It is in contractual relationships with 1.8 million British Columbian residents, approximately forty percent of the province’s population. Ms. Douez is one of these individuals. Relatedly, individual consumers in this context are faced with little choice but to accept Facebook’s terms of use. Facebook asserts that Ms. Douez could have simply rejected Facebook’s terms. But as the academic commentary makes clear, in today’s digital marketplace, transactions between businesses and consumers are generally covered by non-negotiable standard form contracts presented to consumers on a “take-it-or-leave-it” basis (Pavlović, at p. 392).

On privacy, the court discusses its importance as a quasi-constitutional right and is particularly sensitive the privacy challenges that arise from the Internet:

Canadian courts have a greater interest in adjudicating cases impinging on constitutional and quasi-constitutional rights because these rights play an essential role in a free and democratic society and embody key Canadian values. There is an inherent public good in Canadian courts deciding these types of claims. Through adjudication, courts establish norms and interpret the rights enjoyed by all Canadians.

At issue in this case is Ms. Douez’s statutory privacy right. Privacy legislation has been accorded quasi-constitutional status. This Court has emphasized the importance of privacy – and its role in protecting one’s physical and moral autonomy – on multiple occasions. As the chambers judge noted, the growth of the Internet, virtually timeless with pervasive reach, has exacerbated the potential harm that may flow from incursions to a person’s privacy interests. In this context, it is especially important that such harms do not go without remedy.

The majority adds that there are additional factors that weigh toward non-enforcement, including the interests of justice (it wasn’t clear that a California court, which was designated in the Facebook clause, would even hear the case) and the convenience and costs associated with litigating there.

Justice Abella joined the majority with reasons that adopted an even stronger position against the enforceability of the Facebook contract. While Justices Karakatsanis, Wagner and Gascon ruled that the clause is enforceable under contractual doctrine but that Douez met the burden of showing strong cause that it should not be enforced, Justice Abella concluded that it was not enforceable at the first step of inquiry, emphasizing the non-negotiated nature of online contracts.  She states:

I accept that certainty and predictability generally favour the enforcement at common law of contractual terms, but it is important to put this forum selection clause in its contractual context. We are dealing here with an online consumer contract of adhesion. Unlike Pompey, there is virtually no opportunity on the part of the consumer to negotiate the terms of the clause. To become a member of Facebook, one must accept all the terms stipulated in the terms of use. No bargaining, no choice, no adjustments.

Justice Abella then asks the question that many consumers may ask in the context of online contracts:

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?

Her conclusion:

In general, then, 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.

Justice Abella’s analysis then turns to the importance of privacy and the “grossly uneven bargaining power” in concluding that the forum selection clause in the Facebook agreement is unenforceable as a “classic case of unconscionability.”

There is a dissent from Chief Justice McLachlin and Justices Moldaver and Côté.  They emphasize the importance of forum selection clauses, arguing that the default should be that they are enforceable, particularly in the online environment (citing an article I wrote many years ago about the challenges of Internet jurisdiction). They note that many companies large and small rely on the clauses and that :

The overwhelming weight of international jurisprudence shows that, far from being a subterfuge to deny access to justice, forum selection clauses are vital to international order, fairness and comity.

The dissent also argues that there was no evidence of the state of California law nor of the hardship in litigating there.

With the majority ruling against the enforceability of the forum selection clause, the court has demonstrated their discomfort with non-negotiated online terms that place consumers at a significant disadvantage and may result in a loss of rights. While forum selection clauses are an obvious manifestation of that, the reasoning might also be applied to other online contractual terms that seek to override important laws and protections. These could include contractual terms that seek to override copyright user rights or local consumer safeguards. The decision will undoubtedly have a significant impact on online contracting in Canada, forcing many online companies to reconsider whether their agreements are fully enforceable and emboldening consumers to stand up for their rights.

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U.S. Lobby Groups Take Aim At Canadian Copyright Law in NAFTA Comments: No Balance, No Fair Use, & No Cultural Exception

Michael Geist Law RSS Feed - Thu, 2017/06/22 - 09:07

The U.S. just completed its consultation on negotiating objectives in the upcoming NAFTA re-negotiations (the Canadian consultation is open until July 18, 2017). There are well over a thousand comments, but a review of the lobby groups who pay attention to copyright reveals that they hope to use the talks to make significant changes to Canadian copyright law. This was expected – I touched on the trade dimension of domestic reforms in my recent Policy Options piece on the 2017 copyright review – but the extent to which many groups want to toss aside foundational elements of Canadian copyright law may still surprise.

For example, the Copyright Alliance, which represents a wide array of lobby group associations and Hollywood type interests, rejects the inclusion of balance as an objective in copyright law. It notes that the TPP included a balance provision and warns against something similar in NAFTA. Ironically, the TPP provision was non-enforceable, stating only:

Each Party shall endeavour to achieve an appropriate balance in its copyright and related rights system, among other things by means of limitations or exceptions that are consistent with Article 18.65 (Limitations and Exceptions), including those for the digital environment, giving due consideration to legitimate purposes such as, but not limited to: criticism; comment; news reporting; teaching, scholarship, research, and other similar purposes; and facilitating access to published works for persons who are blind, visually impaired or otherwise print disabled.

As many commentators noted, the “shall endeavour” requirement was very weak. Further, the actual legitimate purposes are hardly controversial as few argue against the basic exceptions identified in the TPP text. Yet despite the weak language and minimalist approach to balance, even that is too much for the Copyright Alliance, which states that it is “very skeptical about this type of language in a trade agreement.” The Copyright Alliance is less skeptical about including copyright term extension, digital lock protections, and requiring intermediary cooperation with rights holders in order to qualify for safe harbours.

While some IP stakeholders such as the Business Software Association are supportive of safe harbours, most others hope to use NAFTA to require significant reforms to the U.S. process and then impose those changes on Canada and Mexico. For example, the RIAA wants Canada to drop the notice-and-notice system and it wants reform of the U.S. notice-and-takedown system as the North America-wide standard. The MPAA similarly cautions against simply using the DMCA as the standard for intermediary liability.

The MPAA also takes aim at Canadian cultural protections, arguing that cultural safeguards should be removed from NAFTA. It states:

The NAFTA is the only U.S. trade agreement currently in force that includes a cultural carveout.  Such a carveout is inconsistent with the principles of free and fair trade. Cultural promotion and open markets are compatible and complementary. MPAA is committed to the promotion and protection of cultural diversity and firmly believes that NAFTA parties in the modernization negotiations can effectively rely on the flexibilities built into free trade agreements, including permissible support programs, to promote their cultural interests.

Canada has long maintained the need for a cultural exception in its trade agreements and while the TPP opened the door to exceptions, the MPAA wants it eliminated altogether.

The MPAA also wants Canada to extend the term of copyright to life of the author plus 70 years from the current standard found in the Berne Convention of life of the author plus 50 years. It argues that the “extension of the term of protection for copyrighted works has a direct benefit to the creators of these works, as well as consumers.” It does not mention that the creators are long since dead, that consumers face higher prices with term extension, and that the change would lock-down the Canadian public domain for two decades.

The U.S. lobby groups generally favour exporting U.S. rules to Canada, but not when it comes to fair use. Many innovative countries have adopted fair use (South Korea, Singapore, Israel among them), but the RIAA argues that only the U.S. should have it. Its submission states:

[E]fforts to export the American fair use exception are particularly troubling. In the United States, the fair use doctrine stems from the First Amendment of the U.S. Constitution and codified 150 years of American common law precedent. The American fair use doctrine is therefore unique to the United States. Fundamentally, fair use creates uncertainty out of the U.S. context. The fair use doctrine provides for open-ended exceptions, setting out principles which should be considered by the courts when determining whether a use of copyright material is “fair” under our system and, therefore, permitted. The inherent uncertainty of the scope of fair use creates an uneasy and complicated relationship to the first requirement of the three-step-test, which is limited to “certain special cases”. That is particularly true when fair use is implemented outside U.S. context and history and without the benefit of the 150 years of case law on which U.S. fair use is based.

Interestingly, Drake, one of Canada’s best known recording artists, recently used a fair use argument in U.S. courts to defeat a lawsuit over sampling. It would be particularly troubling if Canadian artists and creators could only rely on U.S. law to defend their creativity. Fair use is an approach that works for all – creators, users, and innovators. For the RIAA to argue that fair use rights should be denied to artists under Canadian law points to the hypocrisy of their submission and why Canadian negotiators need to adopt a strong position defending the domestic copyright balance.

The post U.S. Lobby Groups Take Aim At Canadian Copyright Law in NAFTA Comments: No Balance, No Fair Use, & No Cultural Exception appeared first on Michael Geist.

Five Eyes Wide Open: How Bill C-59 Mixes Oversight with Expansive Cyber-Security Powers

Michael Geist Law RSS Feed - Wed, 2017/06/21 - 09:17

Four years ago, Edward Snowden shocked the world with a series of surveillance disclosures that forced many to rethink basic assumptions about the privacy of online activities in light of NSA actions. In the years that have followed, we have learned much more about the role of other countries – including Canada – in similar activities (often in partnership with the NSA). The legality and oversight over these cyber-related programs fell into a murky area, with legal challenges over metadata programs, court decisions that questioned whether Canadian agencies were offside the law, the hurriedly drafted Bill C-51 that sparked widespread criticism, and concern over the oversight and review process that many viewed as inadequate.

Yesterday, the Liberal government unveiled Bill C-59, the first genuine attempt to overhaul Canadian surveillance and security law in decades. The bill is large and complicated, requiring months of study to fully assess its implications (reactions from Forcese/Roach, BCCLA, CBC, Wark, Amnesty). At first glance, however, it addresses some of the core criticisms of the Conservatives’ Bill C-51 and a legal framework that had struggled to keep pace with emerging technologies. Leading the way is an oversight super-structure that replaces the previous silo approach that often left commissioners with inadequate resources and legal powers. The government has promised to spend millions of dollars to give the new oversight structure the resources it needs alongside legal powers that grant better and more effective review of Canadian activities.

Bill C-59 also places some CSE activities under quasi-judicial control for the first time in its history. A newly created Intelligence Commissioner (a former judge) must authorize some Communications Security Establishment activities as “reasonable” before CSE can undertake these activities, establishing meaningful independent oversight over a set of activities that were previously at the discretion of the Minister of National Defence. The new quasi-judicial control could use some tweaking, however, since it is limited by its secrecy (the body only provides its reasoning to the government and the new intelligence oversight agency) and the absence of appeal mechanisms.

Better oversight alone does not effectively address the privacy-security balance, however. The bill goes beyond fixing longstanding oversight shortcomings by also seeking to address some of the hot button concerns that emerged from C-51. The bill seeks to scale back on disruption powers, narrow the terrorism propaganda provision, and alter the much-criticized provisions that might have been applied to public protests. It does not, however, address the serious concerns about information sharing within government that create a “total information awareness” approach. The failure to fix information sharing isn’t a huge surprise – the Liberals were supportive of it during the C-51 discussion – but it is nevertheless a disappointment that leaves a major privacy concern largely intact.

The bill also notably avoids diving back into the lawful access debate. The government’s consultation paper last year placed the issue back on the agenda, raising the possibility of new disclosure warrants and new rules on encryption. Bill C-59 does not touch those issues, suggesting that the government, law enforcement, and civil society continue to struggle to find common ground that would both address law enforcement concerns and remain consistent with the Supreme Court of Canada’s Spencer decision. Lawful access is far from dead – a bill may still be forthcoming – but it remains on the back burner for now.

Yet the aspect of the bill that may require the most careful study is the reshaping of the mandate and powers of the CSE and the expansion of CSIS activities online. The CSE has been at the forefront of cyber-related issues from an operational perspective, but the mandate identified in the National Defence Act required a broad interpretation to make all of its cyber-security activities fit. The mandate states:

The mandate of the Communications Security Establishment is

(a) to acquire and use information from the global information infrastructure for the purpose of providing foreign intelligence, in accordance with Government of Canada intelligence priorities;

 (b) to provide advice, guidance and services to help ensure the protection of electronic information and of information infrastructures of importance to the Government of Canada; and

(c) to provide technical and operational assistance to federal law enforcement and security agencies in the performance of their lawful duties.

Further, the current mandate limits the geographic scope of CSE activities:

Activities carried out under paragraphs (1)(a) and (b)
(a) shall not be directed at Canadians or any person in Canada; and

(b) shall be subject to measures to protect the privacy of Canadians in the use and retention of intercepted information.

Bill C-59 explicitly confirms that the CSE is a cyber agency wielding both offensive and defensive powers and granting it the ability to operate in Canada. This may embolden the CSE to engage in foreign government hacking, access information from domestic Internet companies, and disrupt communication activities.

The new mandate identifies five broad activities: foreign intelligence, cyber-security and information assurance, defensive cyber operations, active cyber operations, and technical and operational assistance. Given that foreign intelligence and technical/operational assistance are holdovers from the prior mandate, the new mandate reinterprets advice, guidance and service to include offensive and defensive cyber operations along with cyber-security.

The active cyber operations should capture particular attention since it signals Canada’s willingness to actively engage in hacking activities globally:

The active cyber operations aspect of the Establishment’s mandate is to carry out activities on or through the global information infrastructure to degrade, disrupt, influence, respond to or interfere with the capabilities, intentions or activities of a foreign individual, state, organization or terrorist group as they relate to international affairs, defence or security.

Bill C-59 limits these cyber operations by providing that they “must not be directed at a Canadian or at any person in Canada.” CSE’s historical defensive operations remain limited because they “must not be directed at any portion of the global information infrastructure that is in Canada”, require Ministerial authorization, and approval from the newly created Intelligence Commissioner. Its newly recognized offensive cyber-operations face similar limitations. However, these limitations do not apply in all circumstances, including activities involving acquiring or analyzing publicly available data or cybersecurity, software, and systems testing.

The challenge of the bill will be to sort through the implications of these provisions. In recent years, there have been many disclosures about Canadian involvement in surveillance activities such as the surveillance of airport wifi or uploads and downloads to Internet storage sites. Would the new provisions explicitly permit such activities?  Consider the combination of an expansive definition of infrastructure and a full mandate to acquire, use, analyze, retain or disclose infrastructure information for purposes such as research and development, testing systems, or cyber-security activities. The definition of infrastructure includes:

(a) any functional component, physical or logical, of the global information infrastructure; or
(b) events that occur during the interaction between two or more devices that provide services on a network – not including end-point devices that are linked to individual users – or between an individual and a machine, if the interaction is about only a functional component of the global information infrastructure. 

It does not include information that could be linked to an identifiable person.

This would appear to open the door to active participation in widespread network surveillance activities and the acquisition of network traffic for the purposes of analysis, testing, retention, or disclosure. These activities would not require authorization. With ministerial and Intelligence Commissioner authorization, the CSE can be authorized to hack into the network, install or distribute anything on the network, and do anything to remain covert. It may be even be authorized to carry “unselected” foreign intelligence acquisition – the same mass surveillance the NSA has been criticized for – so long as these activities are not directed at Canadians. There are some limitations on authorizations, which can last for up to one year. Extensions of the ministerial authorization is not subject to authorization by the new Intelligence Commissioner. The CSE or government’s view of an identifiable person is uncertain, raising questions about whether key digital identifiers such as IP addresses are identifiable in their view.

Not to be overlooked is the significant expansion of CSE’s domestic cybersecurity defence mandate. The agency can now acquire Canada data and interact with designated Canadian infrastructure or electronic information for the purpose of cyber-defence (designated “cybersecurity and information assurance” activities), granting the agency a significant new role in domestic private sector cybersecurity. The Minister and Intelligence Commissioner must authorize such activities before CSE can engage in them.

However, under Bill C-59, CSE is also granted near limitless discretion to evaluate any system for vulnerabilities (including private sector Canadian systems or systems with extensive Canadian data) under its cybersecurity mandate. No authorization is required from either the Minister or the Intelligence Commissioner to carry out such activities, although presumably CSE would still be limited by wiretapping and anti-hacking protections in the Criminal Code when accessing domestic systems without explicit authorization.

The CSIS provisions expand the collection of datasets that may also have significant cyber-implications. The bill states that CSIS may only collect a dataset if it is publicly available, belongs to an approved class, or predominantly relates to non-Canadians who are outside Canada.  This third category on datasets relating predominantly to non-Canadians would seemingly cover major social media and search datasets from the U.S. that include millions of Canadians but do not relate predominantly to Canada. This new scheme comprises a somewhat more tailored attempt to resurrect CSIS metadata program the Federal Court recently shut down as “unnecessary.”

Proponents will argue that these cyber-related provisions simply reflect the reality of global communications today and participation in international networks such as Five Eyes. However, Canada’s participation in these networks and the embrace of a more muscular cyber-security strategy should be done with our eyes wide open, recognizing that with explicit authorization for offensive hacking of foreign governments and massive network data collection, Canada is now an active participant in the network disruption and surveillance programs whose revelation shocked many only a few years ago.

The post Five Eyes Wide Open: How Bill C-59 Mixes Oversight with Expansive Cyber-Security Powers appeared first on Michael Geist.

Why the Government’s ATI Reform Bill is a Promise Broken: Proactive Disclosure ≠ Access to Information

Michael Geist Law RSS Feed - Tue, 2017/06/20 - 09:10

When political parties find themselves in opposition, promising to fix the access to information system invariably seems like a good idea. The public is often skeptical about whether the government is transparent and when combined with a woefully outdated Access to Information Act, reform provides a ripe target. Stephen Harper’s Conservatives promised a long list of access to information reforms before taking power, most of which were never acted upon. Justin Trudeau’s Liberals made similar promises when in opposition, unveiling a 32-point plan in June 2015 that pledged a fair and open government backed by access to information reform.

The government introduced Bill C-58 yesterday, the bill promoted as fulfilling its commitment on access to information reform. Discouragingly, it fails to do so. The bill does include some notable improvements, including implementing order making power for the Information Commissioner and establishing a requirement to justify, with written reasons, why information is redacted. However, the bill does not live up to the campaign promise nor does it fully address longstanding concerns with the law.

The bill substitutes a commitment to bring the Prime Minister and government ministers under the Access to Information Act with a promise of “proactive disclosure.” Proactive disclosure, a reference to an open-by-default approach for certain ministerial information such as mandate letters and briefing books, is not a substitute for access to information. In 2014, I critiqued the Conservatives’ open government initiative, noting:

An open government plan that only addresses the information that government wants to make available, rather than all of the information to which the public is entitled, is not an open plan.

Bill C-58 seeks to conflate access to information with proactive disclosure, treating the information the government wants to make available as the equivalent to the information to which the public is entitled and may want to access. In fact, the bill effectively renames the Access to Information Act with a new long title:

An Act to extend the present laws of Canada that provide access to information under the control of the Government of Canada and to provide for the proactive publication of certain information

The decision to embed proactive disclosure within the title of the act and treat it as an equivalent part of the access to information system represents a dangerous watering down of the legislation and opens the door to shifting more and more information toward government determining what the public is able to see rather than responding to public requests for information. The Standing Committee on Access to Information, Privacy and Ethics 2016 report included several recommendations related to proactive disclosure, but those were framed primarily as open government and open information policies.

The problems with the bill do not end there. It creates the prospect of refusing to respond to requests that are considered vexatious or in bad faith and it resurfaces the possibility of bringing back user fees beyond the $5 application fee. There may be justifiable policy reasons for these provisions (the ETHI committee recommended the refuse to process requests in such circumstances in its 2016 report. It also called for the elimination of the $5 fee), but the government has not fostered trust with this bill and its plan for access to information.

The bill also fails to pick up on several key recommendations that have surfaced over the years. It does nothing to address overbroad exceptions that often result in redacted information, blank pages throughout the request or lengthy delays. It also does not adopt one of the ETHI committee’s most important recommendations: a general public interest override. The recommendation stated:

That in the first phase of the reform of the Access to Information Act, the Act be amended to include a general public interest override, applicable to all non-mandatory exemptions, with a requirement to consider the following, non-exhaustive list of factors:

Open Government objectives;

  • environmental, health or public safety implications;
  • whether the information reveals human rights abuses or would safeguard the right to life, liberty or security of the person.

The general public interest override can cut both ways, sometimes leading to more disclosure, sometimes less. However, many access to information laws include the analysis to ensure that the public interest in factored into the decision determining what information is released. The federal law does not do so and the bill is silent on the issue.

The government and Treasury Board President Scott Brison may respond that the bill also creates a mandatory five-year review, so further reforms could be adopted during the regular reviews in the future. Yet the mandatory five-year reviews are no guarantees of reform – the PIPEDA five-year review has failed to create a regular process for legislative updates – and are no substitute for a bill that fails to fully addresses longstanding problems with the law or live up to campaign commitments to fix the system.

The post Why the Government’s ATI Reform Bill is a Promise Broken: Proactive Disclosure ≠ Access to Information appeared first on Michael Geist.

Saving Private Media: The Good, the Bad, and the Terrible From the Latest Canadian Proposals

Michael Geist Law RSS Feed - Mon, 2017/06/19 - 10:08

Canadian Heritage Minister Melanie Joly does not plan to release her digital culture policy plan until September, but the pressure to address the financial challenges faced by media organizations increased last week with the Standing Committee on Canadian Heritage report (the same report that recommended an Internet tax that was swiftly rejected by Prime Minister Trudeau) and a proposal from News Media Canada that seeks hundreds of millions in annual government support. The recommendations don’t end there: copyright reform, tax changes, and amendments to government advertising policies are all part of the proposals to provide support to Canadian media organizations.

Andrew Coyne’s must-read column persuasively argues against a media bailout, noting the dangers of permanent government funding of an otherwise independent media. He rightly argues that if funding is established, it isn’t going away as government will be reluctant to allow funded media organizations to fail.  Further, Ken Whyte, former editor-in-chief of the National Post, openly acknowledges in a Twitter stream the constraints that come from criticizing government when funding or regulation is at stake.

The News Media Canada proposal adopts the approach that if you’re going to ask for something, you might as well ask big. The organization argues that “the news media industry in Canada is under threat from competitors with bigger reach and development budgets but no real stakes in Canadian democracy.” Its solution is to ask Canadian taxpayers to hand over hundreds of millions of dollars per year to cover the cost of doing business by rebating 35 cents of every dollar spent on journalism up to $175 million per year. There is an additional proposed fund for “business innovation” that would chip in $90 million per year. The funding is limited to established entities (must have at least a 12 month publishing cycle), limited by subject matter covered, and limited by ownership and location of editorial work.

These proposals are similar, though not identical, to the Canadian Heritage committee recommendations (and also echo the Public Policy Forum’s Shattered Mirror report).  The committee’s recommendations included:

  • amend sections 19 (newspapers), 19.01 (periodicals) and 19.1 (broadcasters) of the Income Tax Act to allow deduction of digital advertising on Canadian-owned platforms.
  • introduce a tax credit to compensate print media companies for a portion of their capital and labour investments in digital media. This would be a temporary five-year measure.
  • level the playing field among industries publishing Canadian news, on all platforms, by ensuring that foreign news aggregators, which publish Canadian news and sell advertising, directed to Canadians, are subject to the same tax obligations as Canadian providers.
  • change the Canada Periodical Fund to make daily and free community newspapers eligible and offer greater support for the online distribution of magazines and newspapers;
  • set aside a part of the revenue from the 600 MHz auction to support locally reflective news and programming.
  • require CBC/Radio-Canada to eliminate advertising from its digital news platforms.
  • change the definition of a registered charity in the Income Tax Act to include not-for-profit media or foundation.

While the proposals will all be lumped together as a plan to “save the media”, there is the good, the bad, and the terrible.

The Good

The good include efforts to support non-for-profit foundations or charities that support investigative journalism (as is found in the U.S.), setting aside revenue from spectrum auctions for digital purposes (everyone wants a crack at this money and the government should commit to plowing the revenues back into all things digital – access, literacy, culture, and media), making CBC an ad-free digital news competitor (thereby removing a taxpayer-supported competitor), and levying sales taxes on foreign digital services (this is also an issue with Netflix). None of these changes affect the independence of Canadian media and they might help support independent journalism and address some competition concerns.

The Bad

The bad are the proposals that simply misread the digital advertising market. For example, News Media Canada wants to ban government advertising on foreign owned sites or services. Government advertising isn’t a subsidy program, however. If government invests in advertising, it must surely be to inform Canadians in the most effective way possible. If that means advertising on foreign owned sites, so be it.

The various proposals also hope to make foreign digital advertising more expensive by playing with the tax deduction eligibility. The goal is presumably to push advertisers away from foreign sites and services or away from digital advertising altogether. Yet digital advertising is a function of the audience. Given that more and more people are shifting their viewing and media consumption habits from offline to digital, advertisers are unsurprisingly following their audience. A change in the tax code will not result in a shift to less effective advertising venues. Rather, it will simply make the digital advertising more expensive and leave Canadian business less competitive in the digital marketplace.

The attempts to distinguish between foreign and domestic digital advertising is also far more complicated that the reports suggest. Many advertisers don’t know where their ads will appear and ad networks do not typically distinguish between the ownership or residency of the sites themselves. In fact, the changes would ultimately make it more difficult for small and medium sized business to reach Canadian audiences since they could not easily use existing digital ad networks.

Further, digital advertising with companies such as Google typically involves a revenue share between Google and the site where the advertising appears. In other words, the advertising often appears on the same Canadian sites that the reports want to support. That revenue initially goes to Google, which then sends a portion back to the site or media organization. For that form of advertising, Google is simply matching advertisers and websites, while collecting a commission for providing the service.  If advertising through the Google or Facebook network alone were enough to disqualify the advertising from tax deductions, Canadian sites would be harmed in the process.

The Terrible

While those are the bad, the proposals also contain some terrible proposals. The government bailout plans should be a non-starter for the reasons articulated by Coyne. Some media organizations are certainly struggling with new competitors and the shift to digital, but turning the media into a state-supported industry imperils an independent media. Moreover, the proposals invariably favour struggling incumbents over upstart digital operations that are an increasingly important presence in the marketplace.

Further, looking to Canadian copyright reform as a solution (as found in the Shattered Mirror report and raised by News Media Canada) would cause considerable harm to freedom of expression and the practice of news reporting with little likelihood of economic benefits. There are at least two kinds of activities at issue. First, there are sites that largely re-write original reporting and run the alternative version of a story on their site with their own advertising. This may be the reference in the report to bloggers using materials without permission. For this form of use, fair dealing is not implicated at all.  Copyright law is designed to protect specific expression, but rightly recognizes that ideas and facts should not be controlled by a single entity. To change the law would grant a single rights holder exclusivity over reporting, effectively limiting the ability of the press to do its job.

Second, there are sites that aggregate content and link back to the original story.  This has generated frustration among some media organizations, who fear that users rely on intermediaries and social networks to decide what to read. It is true that aggregators typically rely upon fair dealing (or fair use) to generate snippets or short summaries of the articles. Yet left unsaid is that fair dealing is exceptionally important for journalists and efforts to restrict it would harm the practice of news reporting. Indeed, news reporting is included as one of the purposes of fair dealing to ensure that copyright is not used to stop important journalism. Claims that fair dealing is a detriment to journalism fails to understand that newspapers are themselves active users of fair dealing. If the media were required to seek permission each time it quoted from another work, expression would be curtailed and costs to produce original reporting would increase.

The post Saving Private Media: The Good, the Bad, and the Terrible From the Latest Canadian Proposals appeared first on Michael Geist.

Why the Government Was Right to Swiftly Ditch the Ill-Advised Internet Tax

Michael Geist Law RSS Feed - Fri, 2017/06/16 - 10:01

Politicians are sometimes said to struggle with “developing policy at Internet speed,” but Thursday the government gave new meaning to the words. My Globe and Mail op-ed notes that as Liberal MPs were presenting the much-anticipated Standing Committee on Canadian Heritage report on media that included a recommendation for a 5-per-cent tax on broadband access, Prime Minister Justin Trudeau and Canadian Heritage Minister Mélanie Joly were assuring Canadians that the government had no intention of accepting the committee’s proposal.

Ms. Joly left the door open to an Internet tax last year through her national consultation on Canadian content in a digital world, steadfastly refusing to take a firm position on the issue. The committee report effectively ended the debate as the immediate criticism of the ill-advised policy measure means that an Internet tax has about as much future as a dial-up modem.

The prospect of an Internet tax should have never reached the recommendation stage, however, as the committee put it in the policy window without any meaningful analysis or effort to grapple with its repercussions.

Committee chair Hedy Fry oddly claimed that the committee had not recommended an Internet tax at all. While she was right about no Netflix tax (the media coverage unfortunately conflated Netflix and broadband taxes), the committee report leaves little doubt that there is a call for a broadband tax.  Recommendation 12 states:

The Committee recommends to expand the current 5% levy for Canadian content production on broadcasting distribution undertakings to broadband distribution.

There is not much ambiguity there and the Prime Minister rightly killed the proposal before it could get out of the news conference. That said, there is much in the committee report that is worthy of consideration including the application of sales taxes to digital services and the use of spectrum revenues to support Canadian content. I’ll take a look at the remaining proposals in a follow-up post next week.

The post Why the Government Was Right to Swiftly Ditch the Ill-Advised Internet Tax appeared first on Michael Geist.

Against Affordable Access: Why the Heritage Committee Plan for an Internet Tax is Terrible Policy

Michael Geist Law RSS Feed - Thu, 2017/06/15 - 09:17

The Standing Committee on Canadian Heritage is reportedly set to release its much-anticipated study on the future of media today with a recommendation for a new 5% tax on broadband services to fund Canadian media and the creation of Cancon. The Globe reports that the Conservative MPs on the committee oppose the recommendation. I raised concerns about the possibility of new digital taxes last fall, fearing that Canadian Heritage Minister Melanie Joly would implement them as part of her review of Cancon in a digital world and noting that the Ontario government appeared supportive of the approach. Joly has yet to outline her plans which are scheduled for release in September, but has refused to rule out Internet taxes and regulation. I will update this post once the full report is released, but based on the Globe report it must be stated that an Internet tax to fund Canadian content is a terrible policy choice with exceptionally harmful effects on the poorest and most vulnerable households in Canada. [Update 11:45 am: Within minutes of the report’s release, Prime Minister Justin Trudeau rejected the Internet tax recommendation.]

An Internet tax would be a terrible policy choice even if the evidence did not indicate that foreign funding for Canadian television production is largely replacing declining funding from Canadian broadcasters and broadcast distributors. Despite claims of impeding doom, the reality is that $2.6 billion was spent last year on Canadian television production with support from licensing fees, tax credits and many other sources. The rise of foreign funding, which coincides with major investments from Netflix in original content, now exceeds virtually all other sources of funding, growing from 10% of financing in 2013-14 to 18% in 2015-16.  Rather than searching for new sources of mandated funding, the creative community is experiencing significant growth in new sources of funding that largely offset declines from mandated contributions.

An Internet tax would also be a terrible policy even if it complied with the law. However, as the Broadcasting Act is currently drafted, it does not. As the committee surely knows, an Internet tax is inconsistent with the Broadcasting Act, since the Supreme Court of Canada ruled in 2012 that ISPs are not “broadcast undertakings” for the purposes of that statute. As the court summary of the decision notes:

When providing access to the Internet, which is the only function of ISPs placed in issue by the reference question, they take no part in the selection, origination, or packaging of content.  The term “broadcasting undertaking” does not contemplate an entity with no role to play in contributing to the Act’s policy objectives.

In other words, the government cannot mandate that ISPs contribute to broadcasting objectives without changing the law.

An Internet tax would also be a terrible policy choice even if the public did not already contribute billions of dollars toward the creation of Canadian content at a time when there are market incentives for broadcasters to invest in original content production. The CMPA’s Profile 2016 reports that over a billion dollars was contributed from public sources including the public broadcaster, federal and provincial tax credits, and the Canadian Media Fund. In fact, CRTC Chair Jean-Pierre Blais’ noted in a speech this week that Canadian taxpayers and subscribers have invested over $20 billion over the past five years in the Canadian media content and broadcasting sectors.

An Internet tax would be a terrible policy choice even if the committee’s attempt to limit the tax to “broadband” services rather than slower connections were a good idea. It is not. The CRTC has established a target for all Canadians to have access to real broadband – 50 Mbps download and 10 Mbps upload. That target was roundly applauded as a necessary step in ensuring equality of access to critical communications services. Creating a two-tier Internet by taxing faster speeds would create anti-innovation incentives and consign poorer Canadians to slow, if any, access.

An Internet tax is a terrible policy choice for these myriad of reasons, but most importantly it is a terrible policy choice for the harm it will cause to affordable Internet access. The committee heard from many media and creator groups, but heard little about the cost of Internet access and what an Internet tax would mean for the digital divide (I appeared before the committee in October 2016). Had they studied access costs, they would learned that the CRTC’s annual report on communications in Canada found that Canadian broadband prices are higher than many comparable countries. Moreover, they might have listened to Navdeep Bains, the Innovation, Science and Economic Development Minister, who last week acknowledged the broadband affordability problem:

Low-income Canadians spend a higher share of their household income on cellphone and Internet bills than high-income Canadians. So it’s not surprising that only 6 out of 10 low-income households in Canada have Internet service.  By contrast, virtually all households that earn $125,000 annually have it. 

This digital divide is unacceptable. It represents a real barrier to continued prosperity for Canadians. Every child who’s unable to do school assignments or download music online is one less consumer of your products and services. Each one of these children is potentially one less software developer for your industry – and one less job creator for our country.
We need every Canadian to be innovation ready- ready to spot opportunities, imagine possibilities, discover new ideas, start new businesses and create new jobs. All Canadians need access to high-speed Internet, regardless of their income level or postal code. Until we bridge this digital divide, Canadians will not reach their full potential.

Simply put, there is no way around the fact that an Internet tax would make access less affordable, expanding the digital divide by placing Internet connectivity beyond the financial reach of more low-income Canadians. The tax would be particularly damaging in indigenous communities.

An Internet tax is largely premised on the argument that ISPs and Internet companies owe their revenues to the cultural content accessed by subscribers and they should therefore be required to contribute to the system much like broadcasters and broadcast distributors. The reality, however, is that Internet use is about far more than streaming videos or listening to music. Those are obviously popular activities, but numerous studies (CIRA, Statistics Canada) point to the fact that they are not nearly as popular as communicating through messaging and social networks, electronic commerce, Internet banking, or searching for news, weather, and other information. From the integral role of the Internet in our education system to the reliance on the Internet for health information (and increasingly tele-medicine) to the massive use of the Internet for business-to-business communications, Internet use is about far more than cultural consumption. Yet the committee envisions the Internet as little more than cable television and wants to implement a taxation system akin to that used for cable and satellite providers.

I reviewed many of the options for funding Cancon in a post last year, noting that mechanisms  such as digital sales taxes or spectrum revenues that could generate additional revenues for funding programs. Instead, the Liberal MPs on the committee including Hedy Fry, Julie Dabrusin, Seamus O’Regan, Pierre Breton, Darrell Samson, and Dan Vandal reportedly adopted the worst possible option (even a Netflix tax would be preferable), one that is non-compliant with the law and that would help put the Internet further out of reach for four out of every ten low income households in Canadians. Given its importance to virtually all aspects of modern day life, there are few policy goals more essential than ensuring that all Canadians have affordable access to the Internet. That goal would be badly undermined by an Internet tax that would increase consumer costs and stymie Canadian innovation.

The post Against Affordable Access: Why the Heritage Committee Plan for an Internet Tax is Terrible Policy appeared first on Michael Geist.

“a plea to the academics”

Fair Duty by Meera Nair - Tue, 2017/06/13 - 10:08

If we want writers to flourish, then it is vital to maintain the spaces of legitimate-unauthorized use provided within the system of copyright.

That was the gist of my remarks for a public event concerning the upcoming review of the Copyright Act, held during Congress 2017. I had one objective in mind: to reach the professoriate. Particularly those individuals who are passionate about literature, books, publishing and Canada. That community is the one that may be best able to cut through the political rhetoric that swirls around the word copyright.  They could offer a well-grounded discussion of what the system of copyright is and how it helps or hinders the telling of stories. And so I titled my presentation as A Plea to the Academics.

The call for papers which prompted my participation asked two questions. The first enquired how might those involved with the enterprises of education and research respond to accusations of widespread pilfering of creative works? The second query asked those same individuals how might they demonstrate the value gained by maintaining a robust limit upon the grant of copyright? My answer was that researchers and educators should do what they do best: research and educate. This was not intended as a witty response; I was quite serious. Beyond a handful of dedicated scholars, the majority of the Canadian professoriate is unaware of the structure of copyright law, its particular history in Canada, and the very real risk Canadians face of being drawn into a strict no-copy-without-payment regime with the ensuing loss to creativity (i.e., see here).

It is likely safe to assert that no government has ever lost votes by declaring allegiance to its writers. Thus, copyright owners, or their representatives, have an easy argument to draw from when lobbying for more restrictive copyright laws; they blithely connect stronger copyright with authorial well-being, claiming that an attendant benefit will eventually flow to the general population. The argument lacks credible evidence, and logic, but given the highly emotional setting of the dialogue, countering the argument requires a deeper understanding of the backstory to literary creation. Limitations upon copyright are critical to building a book industry and to the creation of books themselves. To that end, I drew upon the words and experiences of three writers (Margaret Atwood, Charles Dickens, and Ved Mehta) to illustrate a different perspective about copyright and the creation of literature.

But I have no doubt that literary scholars and book enthusiasts would have more such stories to tell.

My notes, with a few slides embedded, are available through the Association of Canadian College and University Teachers of English.

The Upcoming 2017 Copyright Act Review: What Next for Canadian Copyright

Michael Geist Law RSS Feed - Tue, 2017/06/13 - 10:00

This week Policy Options launched a new series on copyright reform with plans to provide perspectives from across the spectrum. I was delighted to write the first published piece, which starts by making the case that the Conservative government got far more right than wrong in 2012. Canadian copyright law is widely regarded as one of the most innovative in the world with unique, forward-looking provisions (non-commercial user generated content, notice-and-notice) and flexible fair dealing. The last five years have largely achieved what the government had in mind as the days of labelling Canada a “piracy haven” are over, the cultural industries such as movies and music are enjoying record earnings, and new digital services have found great success in Canada.

So, as Parliament prepares for a review of the law later this year, what’s next for Canadian copyright?

I note the following:

The mandatory five-year review was lauded in 2012 as a mechanism that would ensure the law remains current, in what is a fast-paced digital world. On reflection, the uncertainty associated with the prospect of never-ending reforms may ultimately do more harm than good, as would-be investors may question whether Canada is committed to its current path of striking a balance between creators’ and users’ rights.

The 2017 review should be used as a benchmarking exercise, enabling the many stakeholders to give their perspectives on what is working well and what needs to be reviewed. There is certainly an opening for modest reforms that build on the changes in 2015 (extending the term of copyright for sound recordings) and 2016 (ratification of the Marrakesh copyright treaty for the blind and visually impaired). But a radical overhaul would be harmful, as the full implications of the 2012 reforms and recent court rulings are still being sorted out.

The low-hanging fruit offers potential action for the three government departments vying for copyright policy influence: Innovation, Science and Economic Development (notice-and-notice, fair use) Canadian Heritage (Copyright Board of Canada), and International Trade (NAFTA, TPP).

The full piece can be found here.

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Putting the Internet at the Centre: Taking Stock of Jean-Pierre Blais’ Term as CRTC Chair

Michael Geist Law RSS Feed - Mon, 2017/06/12 - 09:23

Barring a last minute extension, CRTC Chair Jean-Pierre Blais’ term will come to an end this week. For those new to the CRTC, it is difficult to overstate just how much changed both procedurally and substantively during his five years as chair. For some context, consider a 2006 invitation I received to participate on a panel at the Telecommunications Invitational Summit, a by-invitation-only event that brought together many in the industry for off-the-record, Chatham House Rules discussions on issues of the day. I was grateful for the invitation – I was there to defend the then-emerging issue of net neutrality – but recall being shocked walking into the venue to see senior telecom executives shooting billiards and having a drink with CRTC commissioners.

It is fair to say that those off-the-record bonding-style events between the regulator and the regulated became a thing of the past under Blais. In fact, weeks after he was named chair of the CRTC, I was called into his office in one of several meetings he had with consumer and public interest voices as his first order of business. I had a mixed history with Blais to that point (he was the lead on copyright policy at Canadian Heritage for many years), but he left no doubt that bringing a public interest voice and perspective to the CRTC was his top priority.

That priority was soon mirrored by the CRTC’s oft-repeated strategic goal of placing Canadians at the centre of their communications system. One critic recently suggested Blais wanted to place himself at the centre, but it seems to me that what he really did was place the Internet at the centre. That meant shifting the way the CRTC engaged with the public to account for the power of the Internet to bring new voices and perspectives to the table and dramatically altering policy so that all Canadians are best positioned to access and take advantage of the global network.

The procedural changes under Blais will have an impact long after a new commissioner and the current Liberal government consider whether to amend his substantive rulings. Before Blais, new participants sometimes faced a rough ride at Commission hearings. For example, when Open Media first appeared in 2011, they faced skeptical questions from the CRTC Vice-Chair about who they represented, their funding, and whether they were non-partisan. That changed over the course of Blais’ term, as the CRTC embraced innovative ways to bring new voices and perspectives to their hearings, launching everything from Internet surveys to Reddit discussions to online videos. It is easy to pick faults with some of these initiatives, but the change in approach is striking. Government rarely rewards risk-taking in policy development, but the CRTC was willing to experiment with new methods to make its work accessible to the public. A new commissioner may bring a different perspective, but there is no reversing a more open, accessible CRTC (and there is still more accessibility work to be done – surely a user-friendly website is not an impossibility).

From a substantive perspective, the policy targets for telecom and broadcast involved placing the Internet at the centre. For telecommunications, Blais emphasized competition and affordability. This included enacting the wireless code that put an end to three-year contracts (Canada was an outlier at the time with three-year contracts locking consumers into their provider) and caps on data roaming fees. The code also included a mandatory unlocking requirement that is likely to be updated with a ban on unlock fees in an upcoming ruling. The Commission also established broadband access as a basic service, set ambitious Internet access targets, safeguarded net neutrality, and mandated wholesale sharing of fibre access. Where it fell short, it was usually due to a lack of full courage of its convictions as was the case in the MVNO decision that failed to actually mandate access for upstart providers.

On the broadcast side, I recently noted that Blais recognized that the advent of the digital networks, an abundance of consumer choice, and the effective removal of longstanding analog protections for Canadian creators would gradually reduce the relevance of the regulator and leave it with two choices. The first – favoured by the creator groups – was to temporarily prolong the protections by extending regulations to Internet services and increasing regulatory costs on broadcasters. The second was to jump on the digital bandwagon, gradually removing the safeguards and creating a regulatory environment premised on competition at all levels – creators, broadcasters, and broadcast distributors. Anyone following the CRTC decisions in the Blais era knows that he chose the latter.

The result is a digital regulatory framework designed to enable Canadian creators to compete on a level playing in Canada (net neutrality), encourage the creation of programming that finds international audiences and partnerships (TalkTV), grants consumers greater television choice (skinny basic and pick-and-pay) and more competitive Internet services (wholesale fibre access), ensure universal Internet access (TalkBroadband), maintain deregulation of Internet-based services (new media exemption), facilitate new Canadian Internet entrants (hybrid services), pushes broadcasters to reduce their reliance on U.S. programming (simsub), and uses group licensing to support a more competitive marketplace for Canadian content. As was the case with telecom, where the CRTC fell short it was in not going far enough, as occurred with only a partial ban on simultaneous substitution.

Anyone shaking up the status quo can expect criticism and Blais got his fair share. Some was largely the result of challenging and questioning powerful interests in a manner to which they were unaccustomed. BCE CEO George Cope did not expect to face direct questions from Canadians through Blais at the Bell-Astral hearing and that exchange fuelled acrimony for years with Canada’s largest telecom company. Similarly, creator groups who traditionally viewed the CRTC as an ally in retaining old-style regulations without much regard for the global competitive landscape were flummoxed by a Commission with a different view on how to best foster Canadian content, leading to exaggerated claims about the end of Cancon.

While those criticisms reflected frustration over a changing regulatory environment, the internal dissent with Raj Shoan and the occasional outbursts unbecoming a CRTC Chair are harder to ignore and are a blemish on Blais’ achievements. Some of Blais’ blunt public comments were welcome (e.g. calling out the double-talk from telcos). However, from the public threats to Netflix to comments about executives and their yachts, there were instances where Blais would have been well advised to rise above the criticism.

Judging a five-year term as CRTC chair should account for all of these issues, but Blais ultimately leaves behind an enviable record. Shifting the culture of a government agency and working to bring Canada’s communications regulatory framework into the digital age is something that largely eluded his predecessors. Blais came to the Commission with an exceptionally ambitious agenda. He achieved far more than could have reasonably been expected and he is likely to be regarded as the most consequential CRTC chair in a generation.

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