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Bell Calls for CRTC-Backed Website Blocking System and Complete Criminalization of Copyright in NAFTA

Michael Geist Law RSS Feed - Fri, 2017/09/22 - 15:31

Bell, Canada’s largest telecom company, has called on the government to support radical copyright and broadcast distribution reforms as part of the NAFTA renegotiation. Their proposals include the creation of a mandated website blocking system without judicial review overseen by the CRTC and the complete criminalization of copyright with criminal provisions attached to all commercial infringement. Bell also supports an overhaul of the current retransmission system for broadcasters, supporting a “consent model” that would either keep U.S. channels out of the Canadian market or dramatically increase their cost of access while maintaining simultaneous substitution.

The Bell positions were articulated at hearing this week of the Standing Committee on International Trade on NAFTA (I appeared earlier in the week before the same committee). The first hour included representatives from both Rogers and Bell. The Rogers position on copyright struck a reasonable balance:

The 2012 Copyright Modernization Act was carefully developed by Parliament over many years and is designed to serve the interests of all Canadians in its balance between rights holders and uses of copyrighted works. We are concerned that a trade renegotiation, where copyright issues are used as bargaining chips, could endanger this delicate balance. In our view, any changes to our domestic copyright laws should be made through the upcoming five-year review of the Copyright Modernization Act, not through the NAFTA renegotiation.

In other words, Rogers believes that changes to Canadian copyright law should come through an open, public process, not behind closed doors in a trade negotiation.

By contrast, Bell took precisely the opposite approach, urging the government to use secretive trade discussions to establish copyright reforms that would be unlikely to ever garner public or policy support. Indeed, it seems likely that the only way Canada could end up with a mandated website blocking system overseen by the CRTC would be to cook it up in a trade negotiation.

Bell focused on piracy during its presentation, arguing that website blocking is the best solution:

Our view on how we solve the piracy problem is it is not sort of coming up with new technological measures, it’s blocking access to piracy. How do you do that? We would like to see measures put in place whereby all Internet service providers are required to block consumer access to pirated websites. In our view, that is the only way to stop it. So you would mandate all ISPs across the country to essentially block access to a black list of egregious piracy sites. That would be job number one.

How does Bell envision this working?  When asked, Bell’s representative stated:

In our view it would be an independent agency that would be charged with that task. You certainly would not want ISPs acting as censors as to what content is pirate content. But, surely, an independent third party agency could be formed, could create a black list of pirate sites and then the ISPs would be required to block it. That is at a high level how we would see it unfolding, perhaps overseen by a regulator like the CRTC.

This is not a misprint. Bell would like the CRTC to police allegations of copyright infringement by overseeing a new website blocking agency charged with creating a block list. Incredibly, Bell’s proposal involves no court oversight, hoping to create a mandatory system for blocking websites that excludes the due process that comes from judicial review (raising obvious Charter of Rights and Freedoms concerns). Notably, Bell does not discuss that Canada already has a provision in the Copyright Act that allows rights holders to target websites that enable infringement.

Moreover, Bell also wants to introduce criminal liability for all commercial copyright infringement. During the opening remarks, it said “Canada should also create a criminal provision for any infringement of copyright, including facilitating and enabling piracy where it is undertaken for commercial purpose.” Since Canada already has a provision to target sites that enable infringement, Bell’s goal is to dramatically expand the prospect of criminal liability for infringement by opening the door to criminal sanction for all commercial copyright infringement. Since some groups have argued that even non-commercial activity could have a commercial impact, the proposal could conceivably capture a wide range of common activities. As with the mandated website blocking proposal, Bell is hoping that the government support inclusion of criminal copyright in NAFTA, thereby ensuring that it does not go through the same policy and public review as other copyright reforms.

The Bell proposals (which sit alongside broadcast distribution proposals that would enshrine simultaneous substitution in NAFTA and create the prospect of blocked U.S. channels under a consent model) suggest that the company’s position as a common carrier representing the concerns of ISPs and their subscribers is long over. Instead, Bell’s copyright advocacy goes beyond what even some U.S. rights holders have called for, envisioning new methods of using copyright law to police the Internet with oversight from the CRTC and implementing such provisions through NAFTA.

The post Bell Calls for CRTC-Backed Website Blocking System and Complete Criminalization of Copyright in NAFTA appeared first on Michael Geist.

Canada’s NAFTA IP and E-commerce Priorities: My Appearance Before the Standing Committee on International Trade

Michael Geist Law RSS Feed - Tue, 2017/09/19 - 10:04

The House of Commons Standing Committee on International Trade has been conducting hearings on the NAFTA negotiations. I appeared before the committee yesterday on a panel that included the dairy industry, food and beverage sector, and my comments on IP and e-commerce. The MPs showed considerable interest in both IP and e-commerce, asking questions about notice-and-notice, fair use, copyright balance, the public domain, and the privacy implications of the e-commerce chapter.  My opening remarks are posted below.

Appearance before the House of Commons Standing Committee on International Trade, September 18, 2017

Good afternoon. My name is Michael Geist.  I am a law professor at the University of Ottawa, where I hold the Canada Research Chair in Internet and E-commerce Law. I appear today in a personal capacity representing only my own views.

There is much to say about NAFTA – I have written numerous articles and posts on the agreement – but I have limited time so I’ll focus on the intellectual property chapter with a brief additional comment on the e-commerce chapter.

While Canada is accustomed to “playing defence” to U.S. intellectual property demands in trade talks, this round of renegotiation offers the chance to pro-actively ensure that Canadian IP priorities and policies are reflected in the agreement. To place the IP issue in context, over the past five years, Canada has implemented anti-circumvention laws similar to those found in the U.S., added stronger enforcement measures, enacted anti-counterfeiting laws, extended the term of protection for sound recordings, and engaged in patent and trademark reforms.

It should therefore 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.

What might that look like?  I’d raise five points.

First, Canada should insist on the inclusion of 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.  Similar language was raised during the TPP negotiations and it belongs in NAFTA.

Second, 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, the NAFTA IP chapter should require that all parties feature a fair use or fair use equivalent provision.

Third, 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. 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. The imbalance in exceptions creates an uneven playing field for innovation and should be remedied within NAFTA.

Fourth, 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 patents, trademarks, and copyright.

Fifth, 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. 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.

I recently conducted research on the role of copyright term and the public domain in Canadian schools using data obtained by the Ontario Book Publishers Organization.  According to data submitted by hundreds of school teachers and school districts, half of the most popular books taught in Grades 7 – 12 are in the public domain or about to enter it. If we extend the term of copyright, dozens of books used by thousands of students today that are scheduled to enter the public domain would be shut out for decades. The prospect of using those books in new and innovative ways without the need for further licensing or royalties – as well as increasing access in open electronic form – would be lost for a generation. These are crucial IP issues and should not be overlooked.

My time is limited to discuss the e-commerce chapter in these opening remarks and I would welcome the chance to do so during questions.  I would only note that Canada should be wary of provisions that undermine legitimate public policy interests, including privacy and security.

The U.S. has identified restrictions against local data storage – often called data localization – as one of its objectives. 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. While the U.S. is seeking a ban on data transfer restrictions, Canada should ensure that privacy and security laws will not be superseded by NAFTA restrictions. In fact, throughout the e-commerce chapter, Canada should seek higher level privacy protections and e-commerce regulations.

I welcome your questions.

The post Canada’s NAFTA IP and E-commerce Priorities: My Appearance Before the Standing Committee on International Trade appeared first on Michael Geist.

Why Copyright Term Matters: Publisher Study Highlights Crucial Role of the Public Domain in Ontario Schools

Michael Geist Law RSS Feed - Thu, 2017/09/14 - 09:58

The Ontario Book Publishers Organization recently published a study funded by the OMDC on the use of Canadian books in English classes in Ontario Public and Catholic schools from Grades 7 to 12. The study surveyed teachers and school boards on which books (including novels, short story collections, creative non-fiction, poetry and plays but not textbooks) are taught in English classes. The goal was to see whether Canadian books were included in class lists. The survey generated hundreds of responses (27 from school board participants and 280 from the Ontario Teachers Federation) resulting references to 695 books by 539 authors.

The OBPO argued that the takeaway from the study is that Canadian books are not well represented in Canadian classrooms since less than a quarter of the mentions referred to a Canadian work and none of the top 10 works were Canadian. While that suggests that there is considerable room to increase the presence of Canadian works in the classroom, the data in the study can be used for other purposes. Working with Sydney Elliott, one of my research assistants, we reviewed the OBPO data to identify the presence of public domain works in Ontario classrooms (ie. the use of works for which the term of copyright has expired).

The results were striking as the data confirms that public domain books are an essential part of the English curriculum. Of the top 20 titles, half are in the public domain today or will enter the public domain within the next few years. William Shakespeare is unsurprisingly responsible for many of these titles, but he is not alone. Other very popular public domain works include books by F. Scott Fitzgerald and George Orwell along with books by John Wyndham and John Steinbeck that will enter the public domain in Canada by the end of the decade.

The importance of the public domain within the classroom extends far beyond the most popular works, however. The survey identified 99 books that received at least four separate mentions from respondents. Of those 99 books, 20 are in the public domain and two more will enter the public domain shortly. This covers a wide range of additional authors including Huxley, Conrad, Shelley, Bronte, and McNamee. These books are widely used as they represent 35% of the total mentions. Expanding even further to the entire list of 695 books, 96 are in the public domain or about to enter it.

Despite efforts by some to dismiss its value, the widespread use of public domain works within Canadian classrooms underscores its continued relevance. It also raises two important policy issues. First, it reinforces how many of the works used in classrooms fall outside of current copyright protection and not are not subject to licence fees or royalties. In fact, as the Ontario government emphasizes the benefits of open electronic textbooks, using public domain works will become even more essential since they can be fully incorporated into open electronic texts without the need for licenses or permissions and can be made more readily accessible in electronic form for blind and sight impaired students.

Second, there is another large category of works currently used in Canadian classrooms beyond the nearly 100 public domain titles. Our review identified another 27 titles that are scheduled to enter the public domain within the next 20-25 years including works from authors and poets such as Agatha Christie, J.R.R. Tolkein, and W.H. Auden. These works – which appear regularly on class lists – would be directly affected should Canada agree to extend the term of copyright as part of the NAFTA negotiations. With the U.S. pushing Canada to extend the term beyond the Berne Convention requirement of life of the author plus 50 years (to life plus 70), no new works would enter the public domain for 20 years (assuming it takes several years to negotiate and implement an extension, the extended term could catch works currently closer to 25 years away from public domain status).

This extension would have a real cost: a New Zealand study on term extension in the TPP estimated the cost at tens of millions of dollars per year. Within Canadian classrooms, dozens of books scheduled to enter the public domain would be shut out for decades. These are books that are used by thousands of students today. The prospect of using those books in new and innovative ways without the need for further licensing or royalties – as well as increasing access in open electronic form – would be lost for a generation.

Recent reports indicate that efforts to revive the TPP may involve the removal of the provisions on copyright term extension from that agreement. As Canada continues the NAFTA talks, it should resist any further term extension by continuing to adhere to the international treaty standard, recognizing that longer terms will have a direct impact on Canadian students, who are sometimes forgotten as among the most active readers of public domain works.

The post Why Copyright Term Matters: Publisher Study Highlights Crucial Role of the Public Domain in Ontario Schools appeared first on Michael Geist.

Why Has the Government Failed to Act on Copyright Notice-and-Notice When Internal Docs Raise Abuse and Fraud Concerns?

Michael Geist Law RSS Feed - Wed, 2017/09/13 - 09:20

Canada’s copyright notice-and-notice system has been the subject of controversy and misuse since the moment it launched in 2015.  The system was intended to educate the public on copyright and reduce infringing activity through awareness (experience indicated the approach worked), but has been misused by copyright owners who have used it to send millions of settlement demands to unsuspecting Canadians.  The misuse of the system was even the subject a question to Prime Minister Justin Trudeau during question period earlier this year.

While fixing the problem should be relatively easy – new regulations could prescribe precisely what may be included in the notice or there could be a prohibition on including settlement offers or demands within the notices – but the government has dragged its feet on the issue. The Conservatives knew there was a problem, but instead chose to prioritize extending the term of copyright for sound recordings after a behind-the-scenes lobbying campaign. The Liberals have similarly not acted on the issue, putting Copyright Board reform ahead in the queue.

The issue may have languished, but documents recently obtained under the Access to Information Act confirm that government officials believe that sending settlement demands is inconsistent with the original policy intent. Moreover, the documents reveal that the Ministry of Innovation, Science, and Economic Development has been receiving anxious calls for consumers and that it is aware of industry concerns about fraudulent notices by parties impersonating copyright holders.  The government memo from 2016, written as advice to ISED Minister Navdeep Bains, states:

Soon after the regime entered into force in January 2015, controversy arose over the practice of some copyright owners (or their agents) of including settlement demands within their notices, urging the consumer to avoid threatened legal action. The sending of such notices could lead to abuses, given that consumers may be pressured into making payments even in situations where they have not engaged in any acts that violate copyright laws.

The memo continues:

Officials signalled to stakeholders early on that the sending of such notices to consumers is not consistent with the underlying policy intent, and many of the participants in the regime, including key organizations representing copyright owners, have indicated that they do not support the use of settlement demands. Internet intermediaries complain, however, that the current legislative framework does not expressly prohibit this practice and that they feel compelled to forward on such notices to their subscribers when they receive them from copyright owners.

The memo notes that “consumer anxiety over such notices has been apparent in inquiries received from ISED’s call centre and in media reports.” The department also raises concerns about fraudulent notices:

According to ISPs, this problem is compounded by instances of fraudulent notices being sent to consumers by individuals impersonating actual copyright owners. Such notices are likely being sent to consumers in the hopes of extracting payments under the guise of settling infringement claims.

Given the awareness of the misuse of the system and vulnerability of thousands of Canadians, why has the government done nothing to address the issue? Officials know the system is being misused and that consumers are being victimized by unwarranted and potentially fraudulent settlement demands. Yet the misuse of notice-and-notice has been going on for 2 1/2 years with no action on what amounts to an easy fix. There is no reason to wait another year or two for the copyright review to run its course to address the issue. If the government can prioritize fixing the Copyright Board, it can also ensure that Canadians are no longer unfairly targeted through a system prone to abuse.

The post Why Has the Government Failed to Act on Copyright Notice-and-Notice When Internal Docs Raise Abuse and Fraud Concerns? appeared first on Michael Geist.

the golden age

Fair Duty by Meera Nair - Mon, 2017/09/04 - 13:15

Another Labour Day has arrived and a new school year is underway. It seems befitting to continue exploring the often tension-ridden relationship between creators of educational material and users thereof. As I described last week via Policy Options: “the story of an ongoing disaster for writers and publishers—supposedly due to errant Supreme Court justices and negligent government—has played out in the press, at international gatherings and in literary journals.” Attacks on the post-secondary sector have been increasingly brazen this year;* for those who are becoming fatigued by the degree and volume of misinformation, I would like to share two points of good news.

First, this is not new.

There is a long history behind today’s dispute. Since the inception of copyright as a component of statutory law, copyright holders have sought to make copyright as expansive as possible and lessen any obligations that serve public interest as a whole. The Statute of Anne (titled An Act for the Encouragement of Learning…) provided copyright under conditions; as I have written before: “the privilege of the original exclusive right of reproduction came with the requirement that for each book published, nine copies were to be given to various university libraries, printed on nothing less than the best paper.” That requirement was decried, reneged on, and eventually discarded but not before many decades of familiar rhetoric had been unleashed.

When it became vividly evident that the statutory condition of library deposit (some called it the educational deposit) was being ignored, a professor of law protested vehemently. In A Vindication of the Right of the Universities of Great Britain to a copy of every new publication Edward Christian wrote:

When I hear much pity and commiseration expressed for the rights of poor authors, I wish to respect the rights of poor students, a class of men from whom poor authors themselves must derive their origin, and without whose successful labours nothing valuable in literature is ever likely to have existence. … By every honourable author [the deposit] would be paid with alacrity, as a debt of justice and gratitude, for the benefit which he must or might have derived from these common foundations of science.

Christian was not unaware of the objections raised to the requirement of deposit; he continued:

… It is sometimes observed, that besides the loss of the copy…, the author or proprietor will suffer considerably by the diminution in the sale of the work, when the members of the University have an opportunity of perusing it gratuitously. But that seems to be a fallacious and sophistical argument; for if the University thinks it worth purchasing, then the sale of one copy does precisely the same mischief to the author’s interest as the donation of that copy.

Christian’s words bring to mind those who insist that a librarian practicing fair dealing on behalf of students is unacceptable, despite the fact that the law (see Copyright Act, 30.2(1)) has long since allowed such practice. Moreover, our Supreme Court has repeatedly emphasized that fair dealing is effectively transferable—in 2004, librarians were permitted to act on behalf of their patrons; in 2012, an ISP and teachers could stand in the fair dealing shoes of subscribers and students respectively.

In any event, the early 19th century is an intriguing period of history. Ronan Deazley writes: “When one thinks of notable debates … in nineteenth century Britain one thinks of … the parliamentary wrangles surrounding the Copyright Amendment Act 1842,” but he brings readers’  attention to events related to a proposed 1808 amendment, titled:

Bill for the further encouragement of Learning in the United Kingdom of Great Britain and Ireland, by securing to the Libraries of the Universities, and other public libraries, copies of all newly-printed books, and books reprinted with additions, and by further securing the copies and copyright of printed Books to the authors of such books, or their assigns, for a time to be limited.

Copyright holders protested; in the decades that followed, the familiar trope of starving authors reappeared. With Romanticism in full bloom, William Wordsworth penned these lines:

… For ‘Books’!” Yes, heartless Ones, or be it proved
That ’tis a fault in Us to have lived and loved
Like others, with like temporal hopes to die
No public harm that Genius from her course
Be turned; and streams of truth dried up, even at their source!

After three hundred years, a change of dialogue would be much appreciated. Which leads me to my second point; such dialogue can exist.

In May of this year, I attended Congress 2017 at Ryerson University, taking the rare opportunity to explore my interest in all things related to books. During one session, a representative from Canadian Publishing made the remark that he did not see himself in the debate about copyright/fair dealing, or authors/readers. That the labour expended by homegrown Canadian presses remains unseen and unaccounted for. As we ran out of official time, he and his colleague stood with me in the hallway so that conversation could continue. To their credit, when I mentioned the millions of dollars that Canadian universities spend on content,** they were surprised, and wishful. If only a fraction of those funds came to them, their situation would be different.

Allied to the challenges of securing income for small presses is the challenge of securing writers. The next day I listened to a publishers’ panel and was struck by one remark in particular: they nurture young talent but when an author “finally writes something with the potential to make money,” that opportunity is given to a larger, weightier press. All publishers present agreed on one thing: that it was essential to sell beyond Canadian borders. The Canadian market is simply not large enough to sustain them. This is, and has always been, the problem.

As I have written before, today’s challenges are as old as Canada itself; 19th century Canadian publishers were shut out of, not only foreign markets, but their own market. Without government support, the publishing sector could not grow. And the support that Canada wished to give, was denied by the political influence of publishers and copyright holders from both the UK and the US.

It was not until the later 20th century, amid the demise of Ryerson Press, that explicit government support emerged for Canadian publishers. (A delightful bonus from Congress 2017 was listening to Clive Powell’s presentation regarding the Ryerson Press archives). That support has continued, but, as noted last year by Kate Edwards (executive director of the Association of Canadian Publishers) in The World Needs More Canada, support had remained static for the prior fifteen years. Even so, in that same article, Dan Wells (publisher of Windsor-based Biblioasis) had this to say: “… this really is the golden age of independent publishing in Canada.”

Wells’ enthusiasm aside, it need not mean we are not to try to focus attention on our homegrown publishers and writers. But it is unwise to take that step via copyright and blanket licensing. Efforts to manufacture a market out of legitimate unauthorized uses of copyrighted materials can only backfire. As I pointed out last week, the dual rise of (i) licensing of content directly between publishers and institutions; and (ii) openly licensed educational resources, points to a future where less proprietary information moves unsanctioned through academic corridors. To the extent that Canadian educators rely on educational publishers, that field is dominated by foreign firms. Just as demands for a uniform stamp of copyright in the 19th century did not serve Canadian publishers well, the call for uniformity through blanket licensing will again disproportionately benefit the competitors of our publishers.

For those who thrive on conflict, continuing to demonize educators and librarians as the enemy of writers and publishers is a desirable state of affairs. But as to whether this approach will benefit the writers and publishers in whose name the conflict is waged, is doubtful for the simple reason that copyright does not care about a Canadian writer, or a Canadian publisher. If we wish to target our own publishing sector and our own writers, we need to find another way.

For instance, provincial governments are taking active interest in developing open educational resources. Could not funds be set aside for grants to educational institutions (whether in the K-12 range or post-secondary) for partnerships with Canadian publishers, writers, artists, archivists, geographers, scientists, botanists and historians to develop Made-In-Canada content? Some educational institutions have their own facilities for printing; others are looking at the viability of establishing print-on-demand. A modest printing fee may well be more lucrative to local creators than the small margins available under a mass-market publishing model. Students and Canadian creators could all benefit.

There can be no easy solution to these problems, but conversation is more productive than acrimony. And so, to those two gentlemen, thank you.

 

Notes:

The Walrus recently published this missive, “How Universities Manage to Avoid Paying Writers for Their Work,” by Patrick Warner. He writes: “… why should writers, among the lowest-paid skilled workers in Canada—whose average income is less than 50 percent of the median national wage—be asked to subsidize the education system by making early contributions to the public domain?” Warner makes no mention of the millions spent by post-secondary institutions on content; instead he devotes considerable energy to marking librarians as a source of copyright discontent and enablers of unauthorized use: “… librarians had complained for decades that copyright law prevented them from offering better services to their users: desktop delivery of documents and electronic reserves being two services technology could easily allow.” Left unsaid is the prevalence of licensing of library resources; librarians are often operating under campus wide-licenses from content providers, many of whom allow electronic access and distribution.

** For instance, in 2013, then-President Stephen Toope wrote of the $25 million paid by the University of British Columbia alone for content, including $14 million spent directly on books by faculty and students. Last year, the Canadian Association of Research Libraries indicated that their 31 member libraries had collectively spent $293 million for information resources in 2014-2015. If the expenditures of smaller institutions are included, the number will be even higher.


Universities should educate, not police copyright

Sara Bannerman - Tue, 2017/08/22 - 09:18
My op-ed on why universities should focus on educating faculty and students about copyright rather than online copyright enforcement is available on The Conversation here and in various other publications.

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

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

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

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

The Implications of NAFTA for Privacy and Security

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

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

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

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

Using NAFTA To Safeguard Privacy Protections

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Further:

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

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

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

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

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

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

The factors to be considered include:

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Why Fair Dealing is Not Destroying Canadian Publishing

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

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

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

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

The full piece can be found here.

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

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

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

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

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

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

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

The Google suit states:

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

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

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

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

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

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

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

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

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

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

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

National IP Strategy Submission – July 17, 2017

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

a.    Awareness

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

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

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

b.    Administration

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

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

c.    Innovation

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

i.    Knowledge Transfer Strategies

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

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

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

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

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

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

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

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

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

ii.    IP abuse and misuse

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

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

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

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

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

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

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

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

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

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

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

iv.    Innovation and IP: Anti-Circumvention Legislation Exceptions

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

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

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

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

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

v.    Innovation and IP – Artificial Intelligence

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

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

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

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

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

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

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

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

vi.    Innovation and IP: Crown Copyright

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

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

vii.    Innovation and IP: Copyright Term

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

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

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

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

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

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

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

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

NAFTA Consultation Submission – July 18, 2017

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

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

General Comments

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

i.    Trade Transparency

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

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

ii.    The Importance of IP and E-commerce

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

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

iii.    Inclusion of Balance as an Objective

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

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

Chapter Specific Comments: Intellectual Property

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

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

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

i.    Level Playing Field for Innovation

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

a.    Fair Use/Flexible Fair Dealing

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

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

b.    Anti-Circumvention Legislation Exceptions

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

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

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

c.    IP abuse and misuse

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

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

ii.    Compliance with International Law

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

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

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

iii.    Equivalent but not Identical

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

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

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

Chapter Specific Comments: E-commerce

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

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

i.    Concern with Provisions Undermining Privacy and Security

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

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

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

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

ii.    Higher Level Privacy Protections

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

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

iii.    Culture Exemption

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

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

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

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

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

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

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

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

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

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

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

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

The trial judge expands this by stating:

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

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

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

i.    Purpose of the Dealing

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

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

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

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

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

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

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

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

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

ii.    Character of the Dealing

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

iii.    Amount of the Dealing

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

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

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

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

In the SOCAN case:

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

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

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

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

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

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

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

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

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

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

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

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

But in the CCH case the Supreme Court ruled that:

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

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

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

iv.    Alternatives to the Dealing

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

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

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

v.    Nature of the Work

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

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

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

vi.    Effect of the Dealing on the Work

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

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

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

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

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

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

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

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

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

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

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

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

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

What Comes Next?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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