Feed aggregator

NAFTA Modernization and IP/E-commerce: My Appearance at the Senate Open Caucus

Michael Geist Law RSS Feed - Fri, 2017/10/20 - 09:27

I appeared earlier this week before the Senate Open Caucus to discuss the IP and e-commerce implications of the NAFTA renegotiation. The panel, which included Jerry Dias, Al Mussel, and Brenda Swick, featured an engaging discussion with senators from across the political spectrum. My opening remarks emphasized three points from a Canadian perspective: meeting international standards, doing no harm, and seeking a level playing field. The comments are posted below.

Appearance before Senate Open Caucus, October 18, 2017

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

In light of yesterday’s events, it may be hard to focus on NAFTA’s intellectual property and e-commerce chapters. It goes without saying that the Minister has identified other issues that are bigger sources of contention.  However, precisely because there are other issues demanding attention, there is a risk that important IP and e-commerce issues may be overlooked to the detriment of Canadian policy.

I’d like to focus on three main points in these opening remarks.

1.    Meet International Standards

First, while modern trade agreements typically feature IP chapters – e-commerce chapters are still unusual – significant reforms are invariably best left to domestic policy processes. Canada has a strong record of innovative IP and e-commerce rules. We have some of the toughest anti-piracy laws in the world with declining piracy rates, strong e-commerce and privacy rules, and some unique balancing provisions in copyright. These frameworks are the result of extensive domestic consultations and the crafting of laws that reflect Canadian priorities.

Within a trade negotiation context, many of those priorities can easily be lost amidst the myriad of other issues. The reports on rules of origin, dispute settlement, and supply management point to a challenging and somewhat contentious negotiations. That suggests that IP and e-commerce may get lost in the noise of even more contentious issues.

The solution is simple: NAFTA should require each party to meet international standards as found in global agreements on IP and e-commerce.  It is reasonable to expect all parties to meet international standards. It is not reasonable – nor advisable – to undertake significant domestic change on those issues through secretive trade negotiations that features limited consultation and distorts the traditional efforts at balance.

2.    Do No Harm

Second, we can assume the U.S. wants more than just harmonization on IP and e-commerce. Rather, it will push for Americanization those rules. Canada should resist changes that can harm our domestic market and undermine a “made in Canada” approach.

For example, there have been recent calls for North America-wide website blocking and the full criminalization of copyright. Those proposals have been widely criticized, but point to the harm that trade agreement provisions can create.

Similarly, the US is likely to seek an extension in the term of copyright beyond international law. 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 from 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.

The e-commerce chapter also raises risks of harm. For example, Canada should be wary of provisions that undermine legitimate public policy objectives, particularly privacy and security. The U.S. has identified blocking restrictions against local data storage requirements – 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, raise 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 as it runs the risk of losing sovereignty over privacy policy and could place Canada between a proverbial rock and a hard place, with Europe requiring restrictions and the U.S. banning them.

3.    Level Playing Field

If Canada were to adopt a more pro-active approach on the IP and e-commerce chapter, our focus should be on ensuring a level playing field for innovative businesses and creators.
What might that look like?  Five possibilities include:

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 in the TPP and it belongs in NAFTA.

Second, the availability fair use in copyright in the U.S. 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, Canada’s anti-circumvention provisions – also known as digital lock rules – are among the most restrictive in the 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, Canada has established strong privacy and anti-spam rules.  If anything, the U.S. is out of step with international standards on these issues. Canada should seek better privacy protections to level the playing field for businesses and consumers.

In conclusion, there are opportunities for Canada to advance its interests in the IP and e-commerce chapters in NAFTA. It starts by emphasizing international standards, rejecting harmful proposals, and focusing on the creation of a level playing field throughout the North American market.

I look forward to the discussion and your questions.

The post NAFTA Modernization and IP/E-commerce: My Appearance at the Senate Open Caucus appeared first on Michael Geist.

Government Rejects Call for an Internet Tax: “Conflicts With Principle of Affordable Access”

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

The federal government yesterday released its response to the Standing Committee on Canadian Heritage report on local media released last June. The most controversial recommendation in that report – one swiftly rejected by Prime Minister Trudeau – was a call for a new Internet tax to help fund Canadian media and the creation of Cancon. As I wrote at the time, the proposal is a terrible idea that runs counter to important policy objectives of fostering affordable network access for all Canadians.

The government response, signed by Ministers Joly, Bains, and Morneau, rightly notes that “access to affordable broadband Internet, particularly in rural and remote regions, is essential to the participation of the Canadians in the digital economy.”  In light of this policy priority, the government firmly rejects the Internet tax proposal, grounding its decision in the principle of affordable access:

The Committee’s recommendation to generate revenue by expanding broadcast distribution levies so that they apply to broadband distribution would conflict with the principle of affordable access. The open Internet has been a powerful enabler of innovation, driving economic growth, entrepreneurship, and social change in Canada and around the world. The future prosperity of Canadians depends on access to an open Internet where Canadians have the power to freely innovative, communicate, and access the content of their choice in accordance with Canadian laws. Therefore, the Government does not intend to expand the current levy on broadcast distribution undertakings.

Not only is this statement a clear rejection of an Internet tax, but it also provides the strongest endorsement of net neutrality to date, leaving no doubt the government supports policies to ensure that Canadians – not providers or governments – get to choose what content they access online.

The post Government Rejects Call for an Internet Tax: “Conflicts With Principle of Affordable Access” appeared first on Michael Geist.

The Case for CASL: My Appearance Before the Standing Committee on Industry, Science and Technology

Michael Geist Law RSS Feed - Wed, 2017/10/18 - 09:07

The Standing Committee on Industry, Science and Technology is conducting a review of CASL, Canada’s anti-spam law. While the usual critics are out in full force, I had the opportunity to appear before the committee yesterday to explain why there is real harm, why CASL has helped solve the problem, and why claims that the law is overbroad are overstated. Of particular note was the discussion involving the significant decline in the number of major spamming organizations operating in Canada since the law took effect. Three years ago, Spamhaus’ Register of Known Spamming Organizations listed Canada as home to 7 of the top 100 spamming organizations worldwide (who are responsible for 80% of global spam). Canada’s presence on the ROKSO list has been dramatically reduced with only two Canadian-based organizations remaining on the list, suggesting that spam originating in Canada has experienced a significant decline. My full opening remarks are posted below.

Appearance before the House of Commons Standing Committee on Industry, Science and Technology, October 17, 2017

Good morning. My name is Michael Geist. I am a law professor at the University of Ottawa, where I hold the Canada Research Chair in Internet and E-commerce Law. I served as a member of the National Task Force on Spam and appeared before this committee in the development of CASL. As always, I appear in a personal capacity representing only my own views.

The hallmark of fraudulent spam – from get rich quick schemes to body part enlargement promises – is that it contains something that seems unlikely but people often still want to believe the claims. Over the last several years, we’ve experienced something similar with respect to anti-spam legislation, where the claims of doom just don’t add up.

A perfect example is the frequent suggestion that somehow the neighbourhood lemonade stand would be affected by CASL. Stop to think about this for a moment. Politicians may be an exception, but how many of us have the email addresses for all our neighbours? How many would think to find them and then email the neighbourhood about a lemonade stand? Like spam, it’s claim that takes a kernel of truth – the need for consent to send commercial messages – and then moves into the world of fantasy.

Yet longstanding scare tactics are not the way to assess legislation.

In my view, there are really three questions that lie at the heart of the assessment of the law: (1) Is there a harm or risk that needs to be addressed? (2) Does CASL help solve the problem – ie. does it work? (3) Even if the answers to 1 and 2 are yes, is the law overbroad or too onerous?

1.    Is there a harm or risk to be addressed?

Absolutely. Let me point to three. First, malware, spyware, and phishing attempts have emerged as exceptionally important cyber-security issues and are caught squarely by CASL. Today, these efforts may be state sponsored or simply criminal. Consider the impact of the phishing attempts in the last U.S. election, which successfully gained access to thousands of emails at the Democratic National Committee and may have helped change the course of U.S. political history. Or the massive malware cases such as WannaCry that have affected millions, caused billions in damages and put hospital and banking systems at risk. We need effective laws to counter these threats and this is unquestionably part of CASL’s ambit.

Second, I think we all recognize the importance of e-commerce. The success of e-commerce depends on trust – trust that our information will be used appropriately and trust that online sellers will deliver what is promised. The concerns associated with fraudulent spam extend beyond just the losses that may occur from those messages. They also undermine the potential success of all e-commerce activities.

Third, the public is increasingly aware – and concerned with – their privacy and the use of their personal information. Our major trading partners – particularly the EU – have tried to address these concerns with tough new laws. CASL is a foundational part of the legislative response to the risks of misuse of our personal information. At its heart is the need for informed consent, a standard whose establishment is long overdue.

2.    Does it work?

I should start by saying that I wish we had more data. The failure to collect extensive data is a serious mistake by officials, who should be working with the Spam Research Centre, Internet providers, email service providers, and law enforcement to generate data. The need for more data provides a reminder that the work of policy makers does not end just because the legislative process concludes.

There are, however, several studies and reports that provide valuable data on the effect of CASL. The committee has already heard about the 2015 Cloudmark study, which found significant declines in spam with 29% less email in Canadians’ in-boxes, and a 37% reduction in spam originating from Canada.

Further, one of the core concerns about Canada’s anti-spam framework before CASL was our inability to actively cooperate in global enforcement actions. The Task Force heard that without a comparable anti-spam law, Canada risked becoming a spam haven without the legal ability to assist partner countries in investigations and enforcement. CASL has unquestionably addressed this issue ensuring that Canada is no longer an island in the fight against spam. We now have international enforcement agreements with four countries and MOUs with 12 agencies in 8 countries.

Perhaps the most telling is the ROKSO list – the Register of Known Spamming Organizations maintained by an organization known as Spamhaus. The ROKSO list identifies the top 100 spamming organizations, who are responsible for 80% of spam worldwide. The existence of the list came as a surprise to me and many other Spam Task Force members as it confirmed that we know where the spammers are. Further, we learned that Canada was a notable home for spammers. In fact, when CASL took effect in 2014, Canada was home to a disproportionate number of spamming organizations with 7 of the 100 located in Canada. Today, after three years of CASL, there are only 2 left. There may be several factors behind the decline in the number of top spamming organizations in Canada, but the existence of a tough anti-spam law with real penalties is surely one of them.

So there is data that confirms CASL’s effectiveness. In this regard, it should be emphasized that the goal of the law was never to eliminate all spam from our inboxes. No law can do that just as no technology can eliminate spam nor fully protect us from malware, spyware, and phishing.  Rather, the goal was to reduce spam that originates in Canada with the hope that other countries will also do their part. In that regard, the law has been a success.

3.    Is it too onerous or overbroad?

The CASL complaints have always struck me as a bit odd. The complaints typically focus on the many exceptions in the law with claims that they are too narrow or restrictive. I think that the real narrowness has come from interpretations of the law. Consider the issue of charities. The ISED Minister Navdeep Bains stated the following when announcing the decision to delay the Private Right of Action:

Canadian businesses, charities and non-profit groups should not have to bear the burden of unnecessary red tape and costs to comply with the legislation.

But the regulations state:

Section 6 of the Act does not apply to a commercial electronic message that is sent by or on behalf of a registered charity as defined in subsection 248(1) of the Income Tax Act and the message has as its primary purpose raising funds for the charity

In other words, charities already enjoy a broad exemption under the law.

Similarly, the committee heard about a supposed need for a business-to-business exception. Yet the law already states the following:

This section does not apply to a commercial electronic message that is sent to a person who is engaged in a commercial activity and consists solely of an inquiry or application related to that activity;

In other words, the law already exempts legitimate business-to-business commercial electronic messages.

But even this focus on exceptions is misplaced. Businesses rely on exceptions where they do not want to comply with the foundational obligation in the law. Consent. The law is clear: if you get informed consent from Canadians, there is no need to rely on exceptions. When you hear complaints about narrow exceptions or calls for more, understand that the complaint is fundamentally about being able to use personal information without informed consent by leveraging an exception.

That is bad policy and bad for privacy.

To conclude, these remarks are not meant to suggest that we can’t do better.  We need better data, we need more awareness of the Spam Research Centre, we need agencies to engage more directly with businesses about the true requirements under the law, and we need better enforcement, including the private right action.

But what we also need is a strong anti-spam law with real penalties based on informed consent to deal with a very real threat. That law is CASL.

I look forward to your questions.

The post The Case for CASL: My Appearance Before the Standing Committee on Industry, Science and Technology appeared first on Michael Geist.

how Canadian education really hurts creators

Fair Duty by Meera Nair - Mon, 2017/10/16 - 22:12

Last week, this tweet made the rounds:

Discussing at the Frankfurt Book Fair how education copying policies hurting creators & publishers https://t.co/WQB3yzMoai #CreativeCanada

— Access Copyright (@AccessCopyright) October 13, 2017

The article referenced insists, yet again, that Canada’s 2012 copyright amendments are the reason for declining fortunes among Canadian publishers and creators.

Such a lopsided assessment of Canada and copyright is nothing new. While it is important that members of the education community continue to press Members of Parliament to engage in a comprehensive exploration of this matter, it is as important to turn our gaze inwards and redress the real failure of Canadian education with respect to nurturing creators and creative activity.

The creators I speak of are not those who belong to any union or collective society; most of these creators are still under-age.

Two weeks ago, a mother said to me, “My daughter is terrified of using anything off the Internet.” The daughter is of middle-school-age, and the source of that terror: dire edicts driven in at school. Thou shalt not steal from the internet for the purpose of schoolwork.

Judicial pronouncements notwithstanding, this is not an isolated misconception.

If generations of Canadian students are instilled with the view that education and creativity are contingent on permission from others; that every scrap of content (even when employed for something as innocuous as homework) must be paid for, Canada’s future looks bleak.

The irony of the current situation is that too many Canadian creators are deemed to have been ruined by virtue of our inclusion of “education” into fair dealing, while the fact is that too many Canadian educators are unaware of fair dealing to begin with. Fair dealing would certainly protect a student who wants to use a published picture, a video-clip, or a quotation of text, towards fulfilling an assignment, regardless of the provenance of that content.

Moreover, in addition to fair dealing, the Copyright Act offers many avenues by which a student’s copying in aid of learning finds legitimacy. But are educators aware of these measures?

For instance, are they aware of the importance of S29.21? Hailed by Ruth Okediji as a mark of integrity by Canada, that we as a nation support the type of copying that is the very foundation of creative effort, S29.21 is quite capable of also sheltering a school project. Northrop Frye’s immortal words bear repetition; poetry can only be made out of other poems…

Are Canadian educators aware of the very structure and language of the grant of copyright? S3.1 clearly indicates taking an insubstantial amount of work would not raise a question of infringement.

Continuing along the lines of first principles, do Canadian educators understand the existence of the public domain? That not every artifact (whether in print or digital) is protected by copyright. Facts and ideas are never protected material; copyright is only gained by creation of original expression. A grant of copyright will expire; from that time forward, anyone may use the creation for any purpose. And the exercise of a statutory exception renders protected-material, in that instant, as public domain.

Returning to the situation at hand, what about the long-sought-after Internet exception S30.04? Its language is clumsy, but given that Canadian education fought for this exception, to see it lying by the wayside is frustrating. Granted, the exception is framed in the language of “institution,” but it is only logical that a student attending an institution could rely on the same protection. Given the forceful language surrounding plagiarism in all educational institutions, it is safe to say that the attribution requirement will be met. (Further conditions limit the exception to some degree, but in the context of a student working on an assignment, those conditions will likely also be met.)

But, for simplicity, fair dealing is all that needs be said about an individual student engaged in learning. S.29 states: “Fair dealing for the purpose of research, private study, education, parody or satire, does not infringe copyright.” There are no fixed conditions; multiple Supreme Court decisions emphasize the contextual nature of fair dealing and provide guidance on determining fairness. The typical uses put forward by students (for a picture here, a quotation there) would easily stand up under such an analysis.

Children, teenagers and post-secondary students should not have to take on the task of learning all about copyright before they can comfortably do their homework. That responsibility falls squarely on Canadian educators. While it is undoubtedly easier to simply adopt a no-copying regime, it will not place Canada on any strong footing in a global economy where success is determined by a country’s capacity to think broadly, to be creative, and to develop knowledge-based industries.

Ideally, the word copyright would never need to be uttered to one under the age of 21. But as life is less than ideal, the best we can do for students is to reassure them that their constructive use of broad shoulders of the past to stand on, is not unlawful.

Students today are confronting a world not of their making, but are being handed the responsibility to fix it. To be able to rise to this demand, they need to engage fulsomely with the resources around them to further their creative aspirations, to cultivate their capacity to see something that others cannot, and to dream beyond the constraints of contemporary problems. This cannot happen if copyright angst is the manner in which students choose how to learn.


Prioritizing the Public Interest: My Submission on Copyright Board of Canada Reform

Michael Geist Law RSS Feed - Mon, 2017/10/16 - 09:24

The government’s consultation on reform to the Copyright Board of Canada recently closed with a plan for reform expected to be unveiled in the coming months. My submission to the consultation is posted below. It focuses on two areas. First, it emphasizes the overriding goal of any public institution or administrative tribunal: serving the public interest. In doing so, it points to three issues: public participation, the independence of members of the Copyright Board, and regulation and transparency of copyright collectives.

On this last issue, I note the close linkage between the parties that appear or are affected by board decisions and reform of the board itself. While the consultation document maintains that governance of collecting societies is beyond the scope of the consultation, I argue that solely addressing administrative powers wielded by the board without also assessing the rules pertaining to participation before the board will not adequately address concerns regarding the function of the board itself. In other words, the who and the how are inextricably linked and must be addressed concurrently.

A Consultation on Options for Reform to the Copyright Board of Canada

I am a law professor at the University of Ottawa, where I hold the Canada Research Chair in Internet and E-commerce Law. I focus on the intersection between law and technology with an emphasis on digital policies, particularly copyright. I have appeared before many committees on copyright policy and edited several books on Canadian copyright policy.

This submission, which is based on several earlier public posts, columns, and an appearance before the Senate Standing Committee on Banking, Trade, and Commerce, focuses on two areas. First, it focuses on the overriding goal of any public institution or administrative tribunal: serving the public interest. In doing so, it points to three issues: public participation, the independence of the Copyright Board, and regulation and transparency of copyright collectives.

On this last issue, I emphasize the close linkage between the parties that appear or are affected by board decisions and reform of the board itself.  While the consultation document maintains that governance of collecting societies is beyond the scope of the consultation, I argue that solely addressing administrative powers wielded by the board without also assessing the rules pertaining to participation before the board will not adequately address concerns regarding the function of the board itself. In other words, the who and the how are inextricably linked and must be addressed concurrently.

Background

As the consultation document rights notes, 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 on. The criticism typically comes down to two issues: the substance of decisions and the way those decisions are rendered.  The government should pay little attention to substantive criticism of Board decisions. As former Chair of the Board Vancise noted last year, criticism of the substance of decisions usually comes down to “whose ox is being gored.” If you like decision, you’re comfortable with the Board.  If not, you think the Board is dysfunctional and in need of an overhaul.

I have been both critical and supportive of past Board decisions. I think the Board was initially very slow in acknowledging and implementing the copyright decisions delivered by the Supreme Court of Canada, particularly around fair dealing. That has changed, however, and the decisions are now more reflective of the court’s jurisprudence. Decisions are and will continue to be challenged, yet we should recognize that there is an established system to address appeals. Reform isn’t needed on the substance of decisions.

Contrast the substantive concerns with the administrative ones. 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.

From my perspective, there is unquestionably a need to develop reasonable timelines for conducting hearings and issuing decisions. At times, there may be parties that are content to “rag the puck” without any urgency on Board processes. Given the importance of Board decisions beyond the immediate parties, timeliness is crucial. Providing the Board with the powers to maintain timeliness of procedures is important and the proposals in the consultation document should assist in addressing the timeliness of decisions.

The Board and the Public Interest

The consultation paper frames the role of the Board in the following manner:

In performing its functions, the Board facilitates the development and growth of copyright-based markets in Canada, resolves disputes between market actors and protects the public interest.

With respect, much like the Copyright Act itself, the primary goal of the Board is to further and protect the public interest.  It is in the public interest to facilitate the development and growth of copyright-based market and to resolve disputes between market actors.  However, the importance of the public interest should not be viewed as one of the board’s functions, but rather its primary one.  In prioritizing the public interest, there is scope to address the interests of all stakeholders, including the creators and users that regularly appear before the Board.  It also ensures that the Board’s work considers the broader implications of its decisions and processes, thereby facilitating wider participation and support for copyright administration.

In this sense, the Board is no different than any other tribunal, agency or government policy, who are all ultimately about serving the broader public interest. A narrowly defined vision that elevates the interests of certain stakeholders or policy priorities above the over-arching public interest goal runs the risk of lost public confidence in the process and missed opportunities to further Canada’s broader copyright policy goals.

This submission focuses on three mechanisms that would further the Board’s facilitation of the public interest: maximizing public participation, ensuring the independence of Board members, and fostering transparency of copyright collectives in the interests of both creators, users, and the broader public.

i.    Maximize Public Participation

Ensuring the board fulfills its mandate to serve the public interest, can be addressed in several ways but none is more important than opening the door to broader public participation.  The government has identified the need for public participation in policy processes as one of its top priorities. Indeed, the mandate letters of all government ministers emphasized the importance of openness, transparency, and consultation.  Since the 2015 election, the government has worked hard to meet its commitment to public participation by conducting numerous public consultations on a wide range of issues.

This emphasis on public participation can be contrasted with the Board, where hearings and activities are largely limited to a small group of stakeholders who invest heavily in the process. The effective 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.

For example, the Canadian Radio-television and Telecommunications Commission (CRTC) and the Competition Bureau of Canada have both taken steps in recent years to involve the public more directly in policy making activities, hearings, and other issues. In the CRTC’s recent differential pricing hearing, it found a number of ways to engage the public, including discussions on the website Reddit. All of this participation enters the public record, allows for better informed decision making, and leads to greater confidence in the decisions themselves. By contrast, the Board does little to encourage public participation, despite the fact that its decisions often have an impact that extends beyond the parties before it.

When asked several years ago about accessibility and participation concerns, the Board pointed to a working group as evidence that it regularly reviews its practices and compared itself to the Federal Court of Appeal, noting that “of course they [the public] don’t participate, because they don’t really belong there, per se.”

With all respect, I think the Board is wrong and the lack of emphasis on public participation a shortcoming of the consultation document. The impact of the Board’s decisions extend far beyond the limited number of parties that participate in the hearing.  The most obvious stakeholders are intellectual property lawyers and copyright collectives, but decisions have a direct impact on commercial users, on the broader public, and on our understanding of copyright law.  This in turns implicates consumer pricing as well as copyright practices on issues such as fair dealing and the public domain.

Many branches of government and administrative agencies have recognized the need to engage the public and to develop better decision making processes by maximizing public participation and engagement. To date, the Board has not done so.  Its processes are costly, lengthy, and for all practical purposes inaccessible to the general public.  That needs to change.

The CRTC provides a good model for enhancing public participation.  Its participation funding approaches for both telecom and broadcast allow for public interest groups to appear, retain experts, and ensure that a broader perspective is included within the hearing process. The funding models place the cost burden on larger, wealthier participants such as telecommunications companies.  In the Board context, developing a mechanism to create a board participation fund supported by all commercial stakeholders should be a top priority.

Moreover, public participation and engagement must become a core part of the Board’s practices with rules that enable innovative forms of participation that lower the bar to participation and ensure that the broader public interest and perspective is included in the Board’s deliberations and decision making.  Courts have well established processes for intervenor status to allow broader participation in decision making and hearings. Those perspectives should be included in the Board’s decision making process, not wait for appellate hearings of Board decisions when these views are later brought into the record through interventions at the Federal Court of Appeal or the Supreme Court of Canada.

ii.    Board Member Independence

The government’s recent announcement that it plans to fill vacancies at the Board is to be welcomed by all stakeholders as a fully functioning board can better serve the public interest and the goals of enumerated in the consultation document.

In working to identify new board members, it is essential that any new board member be fully independent.  I recognize that there are frequently tensions between identifying qualified, experienced board members (who may often have a history of working in the sector) and ensuring full independence of the members of the board. A call for full independence is not meant to suggest that current or past members have been viewed as something less than independent. However, tribunals and boards may run the risk of losing public confidence where the “regulated become the regulator.”

Experience and expertise in the field is important, but independence is the essential ingredient in fostering public confidence in decision making. I would argue that prospective board members that have represented or worked for groups that regularly appear before the Board should refrain from sitting on the board itself.  While this may heighten the challenge of identifying suitable candidates, the result will better ensure that the public interest is served.

iii.    Copyright Collective Transparency and Regulation

The consultation document states:

Potential changes to the governance of collective societies more generally and the existing system for granting licences in respect of copyright belonging to owners who cannot be located are also beyond the scope of this consultation.

With respect, effective Board reform should not be limited to board procedures and processes.  Serving the public interest and gaining the confidence of the wider copyright community also depends upon the confidence in key stakeholders who serve as intermediaries in the administration of copyright. Given the interests of creators to be paid and users to ensure that their payments reach those creators, the role of copyright collectives is closely connected to the effective functioning of the Board.

The challenges associated with confidence in the management and transparency of copyright collectives represents a global concern. For example, the Australian copyright community was shocked by a scandal earlier this year involving the Copyright Agency, a copyright collective that diverted millions of dollars intended for authors toward a lobbying and advocacy fund designed to fight against potential fair use reforms. The collective reportedly withheld A$15 million in royalties from authors in order to build a war chest to fight against changes to the Australian copyright law. A former director of the Copyright Agency described the situation as “pathetic” noting that it was outrageous to extract millions from publicly-funded schools for a lobbying fund.

The Australian case is far from an isolated incident. In recent years, there have numerous examples of legal concerns involving copyright collectives with corruption fears in Kenya and competition law concerns in Italy over the past couple of months as well as recent fines against Spanish collecting societies. In fact, studies have chronicled an astonishing array of examples of corruption, mismanagement, lack of transparency, and negative effects for both creators and users from copyright collectives around the world.

Canada is home to an enormous number of copyright collectives and the allocation of revenues toward lobbying may also be an issue here. For example, this year’s Access Copyright annual report re-names the longstanding expense on copyright tariffs as “Tariff, litigation and advocacy costs”, better reflecting expenditures on lobbying and advocacy activities in which the organization lines up against fair dealing and in favour of copyright term extension. Since the introduction of copyright reform in 2010, Access Copyright has reported spending nearly $7 million on litigation that has been largely unsuccessful, tariff applications, and government lobbying and advocacy (the specific amounts totalling $6.81 million are 2016: $641,000, 2015: $443,000, 2014: $826,000, 2013: $1,571,000, 2012: $1,221,000, 2011: $1,459,000, 2010: $730,000).

There has been no evidence or reason to think that the full-scale corruption elsewhere has occurred in Canada. Indeed, there is every reason to think that Canadian copyright collectives and their administrators are deeply committed to representing the best interests of their members.  However, over the past decade there has been concerns voiced in some quarters about the management and transparency associated with Canadian copyright collectives.

For example, in 2008, Professor Martin L. Friedland conducted a study of Access Copyright, calling for dramatic change in governance, transparency, and royalty distribution practices.  Friedland began by noting:

I have undertaken a number of other public policy studies over the years, including such reasonably complex topics as pension reform, securities regulation, and national security, and have never encountered anything quite as complex as the Access Copyright distribution system. It is far from transparent. Very little is written down in a consolidated, cohesive, comprehensive, or comprehensible manner. There is no manual describing in detail how the distribution system operates.

The report continued by examining the history of Access Copyright, comparing it to other collectives, and identifying inequities in the distribution structure.  For example, it reveals that “in the distribution for 2005 under the federal government licence, the publishers received $188,256 for scholarly journals and the creators received nothing.”

The report included 20 recommendations for change. To its credit, Access Copyright made many reforms in response to the report, including significant changes to its board structure.  Yet that same year, the League of Canadian Poets and Access Copyright battled publicly over the copyright collective’s allocation policies. In a letter dated September 22, 2008, the League said that it was “calling for a formal, public, government audit, annual review and effectiveness audit of Access Copyright.”  It added that it is their “understanding that there are staff members at Industry who are going to look at ‘collectives’ in the next phase of Copyright Act reforms. Please look at Access Copyright first.”

The issues associated with copyright collectives were never fully addressed in the 2012 copyright reform process. Ensuring that the Board serves the public interest should include developing regulations regarding transparency and appropriate regulation of copyright collectives, whose intermediary role is frequently the final step between a Board ruling, user payment, and the distribution of funds to creators.

Other jurisdictions, including the European Union, Australia, and Japan use regulation or codes of conduct to address transparency and conduct concerns.  A 2012 study for the British government by Professor Brian Fitzgerald on regulation and codes of conduct for copyright collectives concluded:
Codes of conduct have little effect on improving the weak bargaining power of the majority of users – bargaining power is determined instead by the external regulatory regime in each jurisdiction, not by collecting societies per se.

From a Canadian perspective, the absence of measures is a significant impediment to ensuring full confidence in copyright administration and the consideration of new regulations should form part of the government’s efforts to reform the administration of copyright through the Board.

Thank you for your consideration.

The post Prioritizing the Public Interest: My Submission on Copyright Board of Canada Reform appeared first on Michael Geist.

Border and Airport Privacy: My Appearance Before the Standing Committee on Access to Information, Privacy and Ethics

Michael Geist Law RSS Feed - Thu, 2017/10/12 - 11:20

The Standing Committee on Access to Information, Privacy and Ethics has been conducting a much-needed study on the privacy issues arising from the border and airports. The study has attracted considerable media attention, with the Privacy Commissioner of Canada warning about U.S. border phone searches and the CBSA promising to begin tracking cellphone searches.  I appeared before the committee late last month alongside the Canadian Bar Association and privacy expert Kris Klein. The full transcript can be found here.

My opening remarks are posted below. I focused on four issues to consider in trying to address airport and border privacy concerns: Privacy Act reform, information sharing within government, the applicability of Charter rights at the border, and the role of the NAFTA negotiations.

Appearance before the House of Commons Standing Committee on Access to Information, Privacy & Ethics, September 27, 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. My areas of specialty include digital policy, intellectual property, and privacy. I have appeared many times before this committee on privacy issues and as always, I appear in a personal capacity representing only my own views.

I am grateful to the committee for its commitment to privacy and its efforts to highlight the privacy issues associated with our airports and border crossings.  The media has regularly covered this issue: fears of device searches at borders, stories of information sharing that goes far beyond most reasonable expectations, and mounting concerns about the approach of U.S. law and border officials with respect to the privacy rights of non-citizens and non-permanent residents.

These stories hit home. They include the incident involving a Quebec resident who did not want his cell phone searched at the Canada border in Halifax. He was arrested for not giving the passcode when asked thereby hindering an investigation. In another incident, a Canadian man was denied entry into the US after Customs and Border Parol officers demanded he open his phone and looked through his apps. Yet another incident involved a Canadian photojournalist who was inspected on his way to Standing Rock. Officials photocopied pages of his personal journal and asked for his three mobile phone passwords which he said he could not disclose because of his ethical obligation to protect his sources. His phones were taken and returned hours later with tamper tape covering the SIM cards, suggesting the cards had been removed and copied.

The privacy associated with border crossings now captures seemingly everyone’s attention. I think it is worth asking why. I think there are at least three sources of concern that help point to potential policy solutions.

First, there is a feeling that border crossings represent “no privacy” zones in which officials are entitled to demand whatever information they wish and can use whatever means to acquire it.  I know of technical experts who regularly wipe their phones or establish border crossing social media accounts in order to counter fears of invasive searches – both physical and digital – when crossing the border.

Second, as these stories suggest, the search itself has changed dramatically in recent years with the legal safeguards failing to keep pace. It is one thing to know that your belongings may be searched. Yet today our devices and the information they can access tell a far more personal story – from our social graph to our location history to our reading habits to our purchasing history.  In searching this information, officials may be accessing everything. Doing so without appropriate safeguards understandably leaves many feeling vulnerable. The data indicates that these forms of searches has been increasing rapidly, with some U.S. policies positing that such searches can occur with or without suspicion.

Third, it may not be comfortable to say, but part of the concern stems from the fact that the U.S. border is by order of magnitudes the most significant one for Canadians. This is not solely a comment on the current U.S. administration.  Rather, it reflects longstanding concerns about the U.S. approach to privacy and fears that U.S. privacy protections are weaker than those found in Canada.  For example, the enactment of the USA Patriot Act after 9/11 opened the door to extensive access to personal information without traditional safeguards. Just over ten years later, the Snowden revelations reinforced the massive data gathering efforts of signals intelligence and law enforcement agencies. Most recently, the Trump Administration executive order aimed at reversing efforts to establish privacy protections for non-U.S. citizens and residents again placed the issue in the spotlight.

What to do?

I thought the Privacy Commissioner of Canada – who raised issues such as information sharing across borders, the US Executive Order, and CBSA searches – provided excellent context and advice.

I’d like to very briefly add comments on four issues.

First, this committee has done excellent work on Privacy Act reform.  As you know, few areas within privacy in Canada are more overdue for updating. Indeed, there have been consistent and persistent calls for reforms for decades.

One method of addressing some of the airport privacy concerns is through the Privacy Act. Your proposed reforms to provide the Office of the Privacy Commissioner of Canada with greater powers would empower that office to examine border issues is a more comprehensive manner and open the door to more careful reviews of cross-border data-sharing arrangements.  You recommended reforms.  Now we need action.

Second, information sharing within government remains a source of concern. Indeed, some of the most notable anecdotal stories involving abuses or questionable conduct at the border arise due to information sharing between governments and government departments. The Privacy Act and the OPC are supposed to create safeguards against misuse of personal information or the use of information for purposes for which it was not collected.

However, we have witnessed mounting pressure in recent years for more information sharing between governments and government departments. Bill C-51, which garnered widespread criticism, featured a significant expansion of government sharing of information, undermining the effectiveness of the Privacy Act. Unfortunately, the information sharing provisions were only modestly changed in that bill. Information sharing was considered a feature, not a bug, including by the Liberal party when in opposition.

Bill C-59, which seeks to amend Bill C-51, leaves most of the information sharing provisions intact. There are two needs here that must be reconciled. First, government needs to be able to use the information it collects in a reasonable and efficient manner.  Second, the public needs confidence that its information will not be misused.  That confidence comes from legislative safeguards and effective oversight.  There is reason to believe we do not yet have the right balance.

Third, as the Privacy Commissioner has discussed, Canadian law should apply on Canadian soil.  Reducing so-called friction at the border is a laudable goal.  No traveller wants long lines or lengthy delays.  However, expediency has a price and sacrificing Canadian Charter rights on Canadian soil is bad bargain.  The Supreme Court has upheld unauthorized searches of devices and those principles should apply at the border.

Fourth, with NAFTA negotiations ongoing this week in Ottawa, I think it is important to link those trade talks with this issue. While there is no airport privacy chapter in the agreement, NAFTA touches on related issues. There will be pressure to speed up border crossings in the name of increased trade. Further, the digital trade chapter amy include provisions on data localization and data transfers. NAFTA is not a privacy deal, but the reverberations from the agreement will be felt within the privacy world.

The European Union has regularly linked privacy and data protection with trade. We should do the same, recognizing that these issues are linked and ensure that the policy recommendations that come out of this committee make their way to those negotiations.  In fact, we could go further by seeking the same protections the U.S. accords to Europeans under the Privacy Shield to Canadians within NAFTA.

I look forward to your questions.

The post Border and Airport Privacy: My Appearance Before the Standing Committee on Access to Information, Privacy and Ethics appeared first on Michael Geist.

Think There Should be a Netflix Tax?: Why There is Nothing Stopping Canadian Subscribers From Paying Today

Michael Geist Law RSS Feed - Wed, 2017/10/11 - 10:37

The ongoing furor over Netflix taxes remains one of oddest and most poorly understood public policy debates in recent memory. Part of the problem is that a “Netflix tax” has long been used to mean different things to different people. When first raised by the Conservative government, the issue had nothing to do with sales tax. Rather, a “Netflix tax” was a reference to a mandated contribution to help fund Canadian content, a position supported by various cultural groups and some provincial governments. The no-Netflix tax position took hold, however, and all three major parties adopted the position that they would not mandate contributions from online service providers such as Netflix.

More recently, the debate has shifted to Netflix tax as a sales tax with the goal of creating a “level playing field.” I tried to debunk the level playing field claims in this post and on Canadaland, but the claims of the need for a level playing field and sales tax continues. Yesterday, the NDP stated:

All companies, whether they are Canadian or foreign, should be paying their fair share. It is the federal government’s responsibility to level the playing field, and this means making sure that all companies that do business in Canada pay their taxes.

This was reported as a shift in position, but the prospect of sales taxes on Netflix and similar services has been under consideration by successive governments for several years. In fact, it was the Conservatives who first launched consideration of the application of sales taxes to foreign online providers in 2014. Department of Finance officials appeared before Standing Committee on Canadian Heritage last year to discuss the issue:

E-commerce sales by foreign-based companies can present a challenge for proper sales tax collection. Foreign-based Internet vendors’ businesses with no physical presence in Canada are generally not required to collect GST/HST on their sales. Instead, in the case of physical goods that are purchased online and shipped to Canada by post or courier, the applicable customs duties and GST/HST would generally be collected by the Canada Border Services Agency at the time the goods are imported.

In cases other than the importation of physical goods, the GST/HST legislation imposes a general requirement to self-assess the tax. For businesses that would be entitled to recover any tax payable by claiming input tax credits, there is generally no requirement to self-assess tax on such imports.

The challenges related to the proper collection of sales tax on digital supplies by foreign-based vendors are not unique to Canada. It’s a difficult issue for all jurisdictions with a sales tax. In this regard, the issue was examined as part of the recent initiative of the G20 and the Organisation for Economic Co-operation and Development to address what is known as “base erosion and profit shifting”, or BEPS.

Interest in the issue was so intense that Members of Parliament immediately proceeded to grill officials about how to ensure that sales taxes on Netflix would be paid. Just kidding. After the opening remarks, Liberal MP Julie Dabrusin quickly shifted the focus to charitable status for non-profit media organizations, MP Dan Vandal asked about tax credits for film and video production, and MP Kevin Waugh asked about tax credits (MP Pierre Nantel got things back on track by asking GST experts about GST).

While there is some inevitability to sales taxes on services like Netflix, the outrage is hard to understand since sales taxes are paid by consumers, not service providers. Providers collect the tax from consumers on behalf of the government and then remit what they have collected. There is presumably an administrative cost to collecting and remitting the tax, but sales tax collection is not about “paying their taxes” and companies like Netflix have indicated that they will collect and remit if required to do so.

But for those who believe sales taxes should be paid now, there is no reason to wait. At the Heritage hearing, the finance officials noted that the law technically requires consumers to self-report the applicable tax and remit it directly. The department doesn’t actively enforce this rule, but there is nothing to stop those who think that their Netflix subscriptions should be subject to sales tax from paying it since they can always self-report what they owe by completing this form to help create the “level playing field” they insist is missing.

The post Think There Should be a Netflix Tax?: Why There is Nothing Stopping Canadian Subscribers From Paying Today appeared first on Michael Geist.

Melanie Joly Can’t Seem to Quit the Idea of an Internet Tax

Michael Geist Law RSS Feed - Tue, 2017/10/10 - 09:22

Canadian Heritage Minister Melanie Joly seemingly put the prospect of an Internet tax to bed when she launched her Creative Canada report last month. Throughout the year-and-a-half consultation, there were persistent rumours that an Internet tax was being considered as a mechanism to help fund Cancon. Yet when the Prime Minister rejected an Internet tax last June minutes after it was proposed by the Standing Committee on Canadian Heritage, the policy initiative promoted by some cultural lobby groups seemed dead. Joly’s comments at her policy launched suggested much the same:

But we know that access and affordability of Internet and wireless are real issues for many.
Broadband coverage is uneven across the country.
We pay some of the highest rates in the world.
Our government won’t increase the cost of these services to Canadians by imposing a new tax.

Yet a couple of weeks later, Joly has faced sustained criticism over her policy, particularly the Netflix deal. While much of the criticism is unfounded – the cries of level playing fields are misleading – Joly seems ready to placate some of the Quebec-based criticism by reviving the “dead” Internet tax policy. In a report in Le Devoir, Joly indicated a forthcoming review by the CRTC will consider which players should contribute to the system to ensure sustainability and financing. She added that the government wants companies that benefit from new business models to participate in financing and promised to reform telecom and broadcast legislation to allow for new funding.

The comments will breath new life into those with visions of taxing Internet access, regardless of the negative impact on affordable access for Canadians. It should be noted that the government’s Order-in-Council to the CRTC makes no reference to new taxes, fees, or contributions from Internet providers to support Cancon. The fact that Joly is back to suggesting it is a possibility – potentially through reform to the broadcast and telecommunications laws – suggests that the battle over an Internet tax is not over.

The post Melanie Joly Can’t Seem to Quit the Idea of an Internet Tax appeared first on Michael Geist.

Creative Canada Policy and Canadian news

Sara Bannerman - Fri, 2017/10/06 - 12:27
My op-ed on the Liberal government's new Creative Canada Policy is available on The Conversation here and in various other publications.

Into the Breach: How Canada’s Security Breach Disclosure Regulations Fall Short

Michael Geist Law RSS Feed - Wed, 2017/10/04 - 10:26

With security breaches regularly affecting millions (or even billions) of people, effective security breach disclosure rules are an essential part of a modern privacy law framework. It may surprise many to learn that Canada still does not have mandatory security breach disclosure rules that require companies to notify affected individuals in effect. Rules were passed in 2015, but the accompanying regulations were puzzlingly slow to emerge. The government finally released proposed regulations late in the summer with a consultation that closed earlier this week. My submission, which focused on implementation, content of notices, and proposed “indirect” notification, is posted below.

Submission on Breach of Security Safeguards Regulations

Further to the notice in the Canada Gazette, below please find my comments on the consultation regarding regulations for the Breach of Security Safeguards Regulations. 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 speciality include digital policy and privacy. This response is submitted in my personal capacity reflecting my own views.

The inclusion of an obligation to notify those affected by a breach of security safeguards regulations within Canadian privacy law is long overdue. The absence of rules requiring organizations to notify individuals when their personal information is lost or accessed through a data or security breach has been an ongoing concern in Canada for many years. Data breach notification is rapidly becoming an international norm in privacy protection, creating much-needed incentives for organizations to better protect the information they collect and retain, and allowing individuals to take action to avoid harms such as identity theft when their information has been placed at risk.

While the mandatory data breach rules can be an effective legislative privacy tool, they only work if organizations actually disclose breaches in a timely manner. The new regulations address some concerns, but there are several areas that could be improved.

Implementation

The proposed regulations indicate that there will be a delayed coming into force after the publication of the regulations. It indicates that “this will give regulated organizations time to adjust their policies and procedures accordingly and to ensure that systems are in place to track and record all breaches of security safeguards that they experience.”

The need for mandatory breach disclosure rules has been readily apparent for many years. The development of these rules has undergone extensive consultation and Parliamentary review. With the steady stream of serious data breaches around the world – many of which have directly affected millions of Canadians – there will be few businesses that are unaware of the breach disclosure rules and their need to properly safeguard the personal information they collect, use and disclose. Indeed, many businesses may already engage in pro-active disclosure, recognizing that existing privacy law arguably includes such an obligation as part of the “Accountability” principle, or out of a need to comply with foreign laws such as the European Union’s General Data Protection Regulation. The Digital Privacy Act was enacted by Parliament more than two years ago. Canadians have waited long enough for mandatory disclosure rules that were commonly found in other jurisdictions years ago.

In my view, there is no need for any delay in implementing these regulations. If the government insists on a delay, it should be for no more than 30 days to allow for a short transition period.

Content of the Notices

The proposed regulations rightly cover many important aspects of the content of notices. Inclusion of information regarding steps to mitigate potential harms and how to file complaints with the Privacy Commissioner of Canada is important for many Canadians to fully understand their rights in the aftermath of a security breach.

However, there are some omissions. First, as in some U.S. states, the notice should also include an offer to provide appropriate identity theft prevention and mitigation services at no cost to the affected person for not less than 12 months. This is an increasingly common requirement and should also be included in the Canadian regulations.

Second, the Canadian regulations do not specify that there must be disclosure about the likely consequences of the breach or an assessment of harm. Fully understanding the risks associated with the breach is linked to its consequences and the failure to mandatorily include such information in the notice runs the risk of leaving Canadians unaware of the full potential impact of the breach. The inclusion of that information was recommended by the Privacy Commissioner of Canada. It should form part of the required content in an any notice.

Indirect Notification: Circumstances

The proposed regulations are unfortunately vague with respect to circumstances when indirect notification may be used. The regulations refers to the following:

(a) the giving of direct notification would cause further harm to the affected individual;

(b) the cost of giving of direct notification is prohibitive for the organization;

(c) the organization does not have contact information for the affected individual or the information that it has is out of date.

By comparison, many U.S. states establish clearer requirements for when indirect notification may be used. For example, California and many other states establish cost benchmarks and reference to the number of affected individuals:

Substitute notice is available by means prescribed in the statute if the person or business demonstrates that

  • the cost of providing notice would exceed $250,000, or
  • that the affected class of subject persons to be notified exceeds 500,000, or
  • the person or business does not have sufficient contact information.

By failing to establish greater certainty on the number of affected individuals, the Canadian regulations run the risk of becoming excessively reliant on indirect notification, with fewer Canadians receiving direct notification that their information has been breached. This is particularly difficult to justify in contexts where the impacted service provider has ready access to an automated means of direct notification.

Indirect Notification: Manner

The proposed regulations importantly establish the standards for indirect notification (often called “substitute notification” in other jurisdictions). The proposed approach is less comprehensive than similar rules found elsewhere. The proposed Canadian rule allows for either a website posting for 90 days or an advertisement designed to reach affected individuals. By comparison, the California rules require all of the following:

(A) Email notice when the person or business has an email address for the subject persons.

(B) Conspicuous posting, for a minimum of 30 days, of the notice on the Internet Web site page of the person or business, if the person or business maintains one. […] conspicuous posting on the person’s or business’s Internet Web site means providing a link to the notice on the home page or first significant page after entering the Internet Web site that is in larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or set off from the surrounding text of the same size by symbols or other marks that call attention to the link.

(C) Notification to major statewide media.”

New York State features similar requirements that encompass all three options. The Canadian rules are less comprehensive than those found elsewhere, running the risk that Canadians may be left unaware that their personal information has been the subject of a security breach. Indirect notification, which must only be used in limited situations, should be crafted in a manner that best ensures that affected individuals will be informed of the breach. The current regulations fail to meet the standards found elsewhere and should be amended by requiring email notice where possible, prominent website disclosure, advertisement, and notification to major national and local media.

In addition, where indirect means are relied upon, the regulations must ensure these are supplemented by a readily accessible, secure and effective means by which potentially affected customers can confirm whether they have been affected or not. Recent failed attempts to provide such a mechanism have only worked to further undermine customer trust and to exacerbate the harm of initial breaches. For example, a major recent data breach experienced by Equifax reportedly affected over 100,000 Canadians, in addition to millions of U.S. residents. While a portal was established allowing U.S. residents to check if their data is within the affected dataset, this portal was insecure and imposed onerous obligations onto those who made use of it. Further, Canadian residents were excluded altogether.

Record Keeping

I am supportive of the need for organizations to retain records related to the breach for a full two years. Such a requirement is essential to ensure that potential complaints, investigations, or lawsuits will not be hampered by missing or incomplete information.

The post Into the Breach: How Canada’s Security Breach Disclosure Regulations Fall Short appeared first on Michael Geist.

Fake Data on Fakes: Digging Into Bell’s Dubious Canadian Piracy Claims

Michael Geist Law RSS Feed - Tue, 2017/10/03 - 09:35

The Globe and Mail ran a masthead editorial yesterday that did not mince words with respect to Bell’s recent proposal calling on the Canadian government to support radical copyright reforms in NAFTA such as North America-wide mandatory website blocking and the full criminalization of copyright. Under the title, A Bad Idea for ‘Fixing’ Canada’s Internet Rules, the Globe argued that Bell’s plan “adds up to a frontal attack on online freedom.” Bell has earned the criticism, but it should also be noted that underlying its request were dubious claims about the state of Canadian piracy. Indeed, as Bell shifts its copyright position to mirror those promoted by the MPAA and RIAA, it seems ready to emulate age-old, discredited tactics that inaccurately seek to paint Canada as a piracy haven.

At the hearing, a senior Bell executive stated:

U.S. interests have long complained that widespread online copyright infringement here in Canada is limiting the growth of the digital economy. In fact, many of the most prominent global players in the piracy ecosystem operate out of Canada as a relative safe harbour. Canadians made 1.88 billion visits to piracy sites last year.

There are at least three issues with this paragraph. First, Bell claims that U.S. lobby groups have long complained about Canadian copyright law.  That may be true, but those same groups lodge the same complaints about just about every country in the world. Indeed, the Canadian government has rightly rejected the complaints – usually found in the annual Special 301 piracy watch list – for years. Recent internal government documents stated:

Canada does not recognize the validity of the Special 301 and considers the process and the Report to be flawed. The Report fails to employ a clear methodology and the findings tend to rely on industry allegations rather than empirical evidence and objective analysis.

The same might be said of Bell’s claims that Canadians made 1.88 billion visit to “piracy sites” last year.  The source of this figure is not entirely clear. A Google search reveals one possibility: a CATA Alliance reference last year to Google removing 1.88 billion URLs. If that is the source, Bell’s claim is misleading for several reasons. First, it is a reference to Google URL removals, not site visits. Second, the data is not limited to Canada. Third, earlier this year Google revealed that the overwhelming majority of search takedown requests are fraudulent with data suggesting that 99.95% of Google takedown requests in a single month involved URLs that never actually appeared in the search index.

If this involves a different source, there is plenty of data to indicate that piracy is declining in Canada. For example, CEG-TEK, one of the most prolific (mis)users of the notice-and-notice system reported in 2015 that there were “massive changes” in the Canadian market after the new copyright legal rules were established. In fact, it noted that the biggest decrease in piracy occurred on Bell’s network. Those findings are consistent with other reports that indicate that piracy has declined in Canada as more legal alternatives have entered the market. Moreover, SOCAN, Canada’s largest music copyright collective, this year reported a 460 per cent increase in earnings from Internet music streaming services.

As for claims that Canada is a safe haven for piracy, the reality is precisely the opposite – as Bell surely knows. Canada is home to some of the toughest anti-piracy laws in the world, which Bell has actively used in recent years. This includes lawsuits against set-top box distributors, mod-chip sellers, and websites such as TVAddons. Further, Canadian copyright law has also been used to shut down websites whose primary purpose is to enable infringement with rights holders relying on a first-of-its-kind “enabler provision” contained in the 2012 copyright reforms. The provision appears to have worked as the U.S. government’s most recent report on notorious online markets makes no reference to Canada. Moreover, the Business Software Alliance reports that Canada is at its lowest software piracy rate ever, well below global and European averages.

Bell’s apparent decision to abandon longstanding positions of copyright neutrality befitting a telecom company is discouraging. But even more problematic is its effort to convince the Canadian government to use trade negotiations to advance website blocking and copyright criminalization, while using inaccurate or misleading claims to make its case.

The post Fake Data on Fakes: Digging Into Bell’s Dubious Canadian Piracy Claims appeared first on Michael Geist.

Netflix Canada and the Misleading Claims About “Level Playing Fields”

Michael Geist Law RSS Feed - Mon, 2017/10/02 - 10:17

Canadian Heritage Minister Melanie Joly’s plan for digital Cancon has attracted considerable criticism, particularly the Netflix commitment to spend $500 million on productions in Canada over the next five years. Companies and commentators have argued that the deal creates an “uneven playing field”, noting that Netflix faces different obligations than Canadian companies for both tax collection and contributions to creating Canadian content. In both cases, however, the uneven playing field argument in favour of Netflix does not withstand even mild scrutiny.

Start with the tax issue. Joly has responded to the coverage by insisting that the Netflix Canada production arm will pay corporate tax. That may be true, but the production arm is unlikely to generate significant revenues (it is producing originals for Netflix, not earning subscriber revenue). The real debate is over the applicability of sales taxes for monthly subscriptions. Services such as Bell’s CraveTV collect and remit sales taxes (GST or HST), while foreign providers such as Netflix and DAZN do not.

This is not a culture-specific issue, however. Rather, there is ongoing work at the international level on developing standards for the application of digital sales taxes. Sales taxes on digital services seem inevitable, but requiring Netflix to collect and remit them without developing a broad-based approach to digital sales taxation makes no sense. Since sales tax revenues go to general government revenues – not specifically to cultural programs – requiring the collection of GST would not directly support Cancon. Further, the competitiveness (or lack thereof) of Canadian online video services such as CraveTV has little to do with the extra consumer cost stemming from sales tax. It is not credible to argue that Netflix subscribers would switch to CraveTV or remain with their cable package merely because the cost of their subscription was increased to account for sales taxes.

More relevant are the efforts to compare the Cancon contributions of Netflix with broadcasters and broadcast distributors (cable and satellite companies). According to critics, Netflix has an unfair advantage because it faces no mandatory contribution requirements, while broadcasters and BDUs both face regulations that require contributions (30 percent of revenues for broadcasters, 5 percent of revenues for BDUs). The critics argue that the Netflix investment in Canada is below either percentage.

The most apt-comparison to Netflix is not to a broadcaster or BDU, but rather to competitive online video services. These services, whether Canadian or foreign, are all subject to the same requirements, namely no mandated Cancon contributions. For example, Bell’s CraveTV, which largely promotes U.S. programming such as Seinfeld and the Sopranos, does not face any Cancon contribution or spending requirements. In fact, the CRTC even created another “hybrid” model in 2015 that allows for distribution through BDU systems and the Internet without any Cancon requirements.

While some prefer the comparison to broadcasters or BDUs (arguing that the service feels similar to Canadian subscribers), the reality is that both Canadian broadcasters and BDUs are subject to mandated contributions as part of a regulatory quid pro quo in which they receive significant benefits for being part of the regulated system. Note that U.S. broadcasters – which provide a better analogy to U.S.-based Netflix as a broadcaster – face no such requirements, having never been subject to Cancon requirements despite their near-universal availability in Canada.

Yet even the supposed unfairness of Netflix contributions compared with Canadian broadcasters and BDUs is unconvincing since it ignores all the advantages those companies receive as part of the regulated system. The advantages – none of which are enjoyed by Netflix – include:

  • Simultaneous Substitution, which allows Canadian broadcasters to replace foreign signals with their own. The industry says this policy alone generates hundreds of millions of dollars in revenues for Canadian broadcasters.
  • Must-Carry Regulations, which require BDUs to include many Canadian channels on basic cable and satellite packages. These rules provide guaranteed access to millions of subscribers, thereby increasing the value of the signals and the fees that can be charged for their distribution.
  • Bundling Benefits, that allow BDUs to bundle less popular Canadian channels with more popular U.S. signals, thereby guaranteeing more revenues to the Canadian broadcasters.
  • Copyright Retransmission Rules, which create an exemption in the Copyright Act to allow BDUs to retransmit signals without infringing copyright. This retransmission occurred for many years without any compensation.
  • Market protection, which has shielded Canadian broadcasters from foreign competition such as HBO or ESPN for decades.
  • Eligibility for Canadian Funding Programs and Tax Credits, for which, as Minister Joly points out, companies like Netflix are frequently ineligible.
  • Foreign Investment Restrictions, which limits the percentage that foreign companies may own of Canadian broadcasters or BDUs and thereby reduces competition.
  • Unlimited Distribution Without Caps or Usage Charges, unlike Internet-based services, whose subscribers often face high data costs for accessing those services.

A so-called level playing field should account for all the advantages that Canadian law provides to broadcasters and BDUs. Companies such as Netflix do not get any of these advantages. Instead, they simply compete in the marketplace against well-established competitors that have the regulatory deck stacked in their favour.

If all of this sounds familiar, it is because it is. Telecom watchers will recall the wireless public relations battle of 2013 when Bell, Rogers, and Telus banded together to fight against the rumoured entry of Verizon into the Canadian market. The prospect of a deep-pocketed global player competing in the sheltered Canadian market struck fear in the “Big 3”, who warned of a “bloodbath” if Verizon was permitted to bid for new entrant spectrum. The companies issued public letters claiming to welcome new competition but only if there was a “level playing field.”  Verizon ultimately abandoned the initiative, but the Netflix Canada debate demonstrates that the “level playing field” strategy remains alive and well.

In the case of Netflix, the danger for the Canadian creative community is that history will repeat itself. Joly has indicated that the government hopes that the Netflix deal will serve as an example for future deals with other global players. Yet as other international giants look at the negative reaction to a voluntary agreement to invest hundreds of millions in Canada, they may conclude that future agreements are simply not worth the headache.

The post Netflix Canada and the Misleading Claims About “Level Playing Fields” appeared first on Michael Geist.

Joly’s Digital Cancon Plan: Netflix May Be The Star, But No New Regulations, Taxes or Bailouts is the Story

Michael Geist Law RSS Feed - Thu, 2017/09/28 - 12:50

Canadian Heritage Minister Mélanie Joly presented her vision for digital Cancon earlier today, delivering a wide ranging plan that included previously leaked information about a commitment from Netflix to spend $500 million over five years on production in Canada. The Netflix commitment is the headline of the day, though earlier reports inaccurately claimed that the funding would be for Canadian content rather than productions in Canada (the two are not the same given the restrictive approach to Cancon definitions).

The agreement represents a major long-term commitment to the Canadian market which should go some way to appeasing critics who feared that the company might abandon Canadian production in the future. However, since Canada was already one of the company’s top three countries for production, it may not result in a significant increase in funding.

While the Netflix commitment will attract attention, the more important story is that the government has rejected pressures to levy new Internet or Netflix taxes, impose regulatory requirements on Internet services, depart from its commitment to net neutrality, or provide a bailout to the newspaper industry. Indeed, Joly’s comments on the importance of affordable Internet access and support for net neutrality effectively slam the door shut on those ill-advised proposals. Joly started the consultation by indicating that everything was on the table, which many cultural lobby groups hoped would lead to new Internet taxes and regulation. The decision to reject those proposals confirms that the government’s digital focus emphasizes competition, a strong domestic market, as well as export and promotion of Canadian content.

The government may have eschewed new regulations or taxes, but it has not abandoned a pro-active policy approach. From new funding for the Canadian Media Fund and export promotion to working with Internet companies to obtain commitments to Canada to fashioning a new role for the CBC, the government clearly sees (and wants to be seen) as active on the cultural file. As I blogged last night, the government has also brought the CRTC into the mix with an order-in-council that will review distribution models and their impact on the maintaining a “vibrant domestic market.” The CRTC study is due by June 1, 2018. While it seemingly replicates much of the Talk TV hearing, it is consistent with the government’s emphasis on a strong domestic market supporting domestic production.

The other longer-term issue involves the legislative reviews of the Copyright Act and the Broadcasting and Telecommunications Act. The CRTC study will form part of the communications legislative review, which seems unlikely to go much further than consulting the public, conducting studies, and putting out some preliminary proposals over the next two years until the 2019 election. Joly provided a creator-focused comments on copyright reform, moving away from the balanced copyright approach of the last reform to adopt a Sheila Copps-like position. That is not unusual for a Heritage Minister and will likely face a counter from the ISED Minister Navdeep Bains that should restore the policy process to a position of relative balance that recognizes the need for copyright to address the interests of all stakeholders. The Copyright Act review will not start until November and is expected to run for about a year, suggesting that the primary immediate copyright reforms will involve the Copyright Board, which is the subject of a consultation that concludes on Friday.

Joly may have initially viewed the decision to launch a digital Cancon review as political winner, but the challenge of satisfying groups who view cultural policy as primarily a vehicle for regulation and mandated contributions would have become quickly apparent. Though she faces immediate criticism for failing to tax or treat Netflix like a conventional broadcaster, she deserves thanks for recognizing that future success will not come from regulating or taxing the Internet.

Creative Canada
does not do the heavy lifting of shaking things up – there is no reform to the definition of Cancon, no modernization of existing funding mechanisms, and some of the tougher legislative questions are deferred for further review – but Joly deserves credit for delivering a policy that rejects new taxes and regulation, keeps net neutrality intact, and still finds some new money for production and investment certainty from Netflix.

The post Joly’s Digital Cancon Plan: Netflix May Be The Star, But No New Regulations, Taxes or Bailouts is the Story appeared first on Michael Geist.

Not Just Netflix: Government Asks the CRTC To Conduct a Review of Changing Broadcast Models

Michael Geist Law RSS Feed - Wed, 2017/09/27 - 23:04

Canadian Heritage Minister Mélanie Joly will formally unveil her digital Cancon strategy on Thursday, but aspects of the plan are already coming to light. There have been several reports about an agreement with Netflix to commit $500 million to production in Canada over the next five years. Assuming this is accurate, it may not necessarily mean a big increase in spending (Canada was already one of the top three markets for Netflix production) but it will provide certainty about the company’s commitment to Canada.

It would also appear that the government envisions asking the CRTC to become involved in developing policy, particularly with respect to upcoming review of the Broadcasting Act and Telecommunications Act. An Order-in-Council has just been posted online that requests that the CRTC conduct a study on programming distribution models and their impact on the maintaining a “vibrant domestic market.” The report will examine:

(a) the distribution model or models of programming that are likely to exist in the future;
(b) how and through whom Canadians will access that programming;
(c) the extent to which these models will ensure a vibrant domestic market that is capable of supporting the continued creation, production and distribution of Canadian programming, in both official languages, including original entertainment and information programming.

The emphasis on the domestic market is notable as it follows from the earlier decision to send back the CRTC decision on minimum broadcaster spending. While some of these issues were covered by the CRTC’s earlier TalkTV review, this study will again place the changing market in the spotlight with groups likely to renew their demands for more regulation of the Internet-based services. The CRTC study is due by June 1, 2018.

The post Not Just Netflix: Government Asks the CRTC To Conduct a Review of Changing Broadcast Models appeared first on Michael Geist.

Joly’s Challenge: Digital Cancon Without New Digital Tax Dollars

Michael Geist Law RSS Feed - Wed, 2017/09/27 - 09:34

After months of public consultation and debate, Canadian Heritage Minister Mélanie Joly will unveil the government’s plan for Canadian content in a digital world this week. Joly launched the digital Cancon consultation in the spring of 2016 by emphasizing that all policy options were on the table, but the choices have narrowed considerably in recent months.

My Globe and Mail op-ed notes that a potential Netflix tax was a non-starter due to a 2015 election campaign commitment, Prime Minister Justin Trudeau eliminated the possibility of an Internet tax in June, and the government has steadfastly (and rightly) defended net neutrality, meaning there will be no mandated prioritization of Canadian content on the Internet.

With few new sources of funding, Joly’s strategy will likely rely on updated policy measures rather than more taxpayer dollars. Given the frequent calls from lobby groups for new regulations and mandated contributions for Internet companies, that approach is likely to leave those who equate cultural policy with more government-backed funding disappointed.

Joly has an opportunity to craft a new vision for Cancon that eschews more regulation and instead emphasizes competing on the global stage with policies that better equip Canadian creators for digital challenges. What might a forward-looking Cancon strategy without significant new spending look like?  There are at least five factors at play.

First, Joly is a big believer in making Canada a global cultural player with increased exports abroad and bigger foreign investment at home. Industry data is encouraging with foreign financing now one of the leading sources of funding for English language television programming. In fact, Canada stands as one of top three production markets for Netflix, confirming that online video services are attracted to the Canadian production market without the need for further regulation.

Even as foreign services play a greater role in Canadian production, the government has signalled that it also expects Canadian broadcasters to contribute to domestic success with its recent decision to send a CRTC ruling on minimum spending back for reconsideration. If that represents a nod to the traditional approach to Canadian productions, new policies could include a re-examination of what qualifies as Cancon. Canada maintains one of the least flexible approaches in the world and expanding the types of productions that qualify as Cancon would both enhance investment and ensure that cultural policy shifts away from a predominantly employment-based, box-ticking exercise.

Second, Joly needs to deliver participation from Internet giants such as Netflix, Google, Apple, and Amazon to satisfy critics. Rather than pursuing regulation of those services through mandated contributions or Cancon requirements (which would run counter to net neutrality rules and discourage the potential establishment of an Amazon head office in Canada), the better approach would be seek assistance with the “discoverability” of Canadian content online. The Internet companies are already moving in this direction – Youtube and Apple now have prominent sections devoted to Canadian content – and Joly should work to bring everyone into the fold.

Third, Joly’s digital Cancon strategy must recognize the link between culture and trade policy. With some U.S. lobby groups raising the possibility of eliminating the longstanding cultural policy exemption in NAFTA, the government should make it clear that cultural policies will not be bargained away in trade talks with the U.S. and Mexico and that made-in-Canada intellectual property policies will be preserved.

Fourth, the government should continue its work on legislative reforms that touch on cultural policies. The current joint consultation with Innovation, Science and Economic Development Minister Navdeep Bains on modernizing the Copyright Board of Canada promises to address frustrations with delayed rulings that make it harder for businesses to innovate and creators to be paid. In the longer-term, reviews of the Copyright Act and Canada’s broadcast and telecommunications laws will provide further opportunities to modify the cultural legal frameworks.

Fifth, Joly should work with Finance Minister Bill Morneau on sales tax reform to apply GST/HST to digital services. The current rules create an uneven playing field, with Canadian services collecting and remitting sales taxes, while foreign providers such as Netflix, Spotify, and new sports entrant DAZN exempt from doing so. No one wants to pay more taxes, but competitive fairness dictates that foreign services with substantial Canadian subscriber bases collect and remit sales tax.

Some may have viewed the digital Cancon exercise as the chance for more government-mandated funding, but the past 18 months has instead provided Joly with the opportunity to leave the outdated, regulation-first approach behind. In its place, there is the chance for a more confident strategy that emphasizes competition, flexible legal frameworks, and the export and promotion of Canadian content to a global audience.

The post Joly’s Challenge: Digital Cancon Without New Digital Tax Dollars appeared first on Michael Geist.

European Commission Backed Study Confirms Canada Among the Most Expensive for Broadband Internet Access

Michael Geist Law RSS Feed - Tue, 2017/09/26 - 10:33

The European Commission has released a new study it commissioned on broadband pricing in Europe and several other leading countries. It confirms yet again what Canadian consumers have long suspected: Canada is among the most expensive countries in the developed economy world for broadband Internet services. The study, which provides data on the 2016 retail pricing for consumers throughout the EU, Canada, the U.S., Japan, South Korea, Norway, and Iceland, found Canadians consistently face some of the most expensive pricing regardless of speed or whether the packages include local telephone and television services. The survey was conducted over a two-week period in October 2016 and included retail pricing for five major Canadian ISPs: Bell, Shaw, Rogers, Videotron, and Telus. The data includes procedures to account for one-off fees and other discounts.

While the focal point of the study is European broadband pricing, the comparative data tells a discouraging story for Canadian consumers. The study examines several tiers: 12 – 30 Mbps, 30 – 100 Mbps, and over 100 Mbps. For each tier, the study considers several options: standalone broadband, broadband + local telephone, broadband + television, and a triple play that includes broadband, local telephone, and television.

Canadian pricing is expensive relative to others for most tiers and options. For example, broadband in the 30 – 100 Mbps range covers the CRTC’s target of 50 Mbps for all Canadians. Standalone broadband at that speed range is the most expensive in Canada with pricing far higher than those found in Europe, Japan, South Korea, or the U.S. The same is true for most combinations where Canada is the highest for broadband + television and broadband + local telephone + television. Canada is similarly expensive in the 12 – 30 Mbps tier, where Canadian prices are either the highest or second highest (to the U.S.) in each combination. Canada ranks as the second most expensive market for all combinations in the fastest broadband tier.

Innovation, Science and Economic Development Minister Navdeep Bains has focused on wireless affordability, emphasizing that the market suffers from high pricing and a lack of competition. The wireless sector remains a significant problem, but affordable broadband is also a significant concern. Studies on the issue invariably reach the same conclusion: Canadian prices are high relative to other developed countries. If the government is serious about fostering an innovative economy with opportunities for all, addressing the need for affordable broadband and competitive pricing must be a key priority.

The post European Commission Backed Study Confirms Canada Among the Most Expensive for Broadband Internet Access appeared first on Michael Geist.

An Industry Divided: How Bell Broke With the Telecom Sector on Copyright

Michael Geist Law RSS Feed - Mon, 2017/09/25 - 09:48

The news that Bell has called on the Canadian government to support radical copyright reform in NAFTA that includes North America-wide mandatory website blocking (to be overseen in Canada by the CRTC) and the full criminalization of copyright represents only the latest step in the transformation of the company into one of Canada’s most aggressive copyright lobbyists and litigators. The Bell proposals go beyond what even the CACN, Canada’s anti-counterfeiting lobby group, has recommended. While copyright lobbying has been led for years by the movie and music industries, Bell has now broken with most other communications companies on copyright policy with policies barely distinguishable from the RIAA or MPAA. In recent years, it has argued against VPN use, used the courts to target a wide range of sites and services, lobbied for copyright reform in trade deals, and become the only telecom company in the world to join the Alliance for Creativity and Entertainment.

Even for a company accustomed to adopting unpopular policy positions (Bell is the only major Canadian ISP without a privacy transparency report, it initially rejected the Privacy Commissioner of Canada’s finding that its targeted ad program violated the law, it paid $1.3 million for do-not-call violations, it sparked the fight on usage based billing, and it has been at the centre of net neutrality violation cases), the transformation from a company supportive of balanced copyright to one that prioritizes aggressive enforcement is noteworthy.

When the Canadian Recording Industry Association launched file sharing lawsuits against individual Canadians in 2004, Bell initially adopted a neutral position, neither opposing the suits nor supporting them (Shaw and Telus were far more committed to protecting their customers’ privacy). Over the years, Bell typically sided with other ISPs, zealously safeguarding its positions as an intermediary in the Supreme Court of Canada’s SOCAN v. CAIP decision and successfully fighting for fair dealing in the 2012 SOCAN v. Bell ruling. During the 2009 national consultation on copyright, Bell attended a Toronto public roundtable and expressed support for the positions of the Business Coalition for Balanced Copyright (which featured telecom companies as members and which voiced support for fair use and appropriate limits on digital locks).

Bell’s public positions on copyright are far different today. George Cope, BCE’s CEO, famously switched “from a telecom network guy to media guy” in 2010, when he viewed the Winter Olympics female gold medal hockey game on his cellphone. The media side of its business represents only 12 percent of its revenues (adding TV distribution would increase that percentage), but the company now acts like an old guard media company when it comes to copyright. Former Bell Media Presidents Kevin Crull and Mary Ann Turcke took aim at VPN use in 2015, with Turcke claiming that using a VPN to access U.S. Netflix constituted theft. Data suggested that infringement rates were dropping dramatically on the Bell network, but Bell became active in the courts with lawsuits against distributors of digital TV boxes and the website TVAddons, a Kodi TV site. The ongoing suit against TVAddons was particularly newsworthy, as a federal court judge found that the true purpose was to “destroy the livelihood of the defendant.”

Earlier this year, Bell became an inaugural member of the Alliance for Creativity and Entertainment, a new anti-piracy group. Membership costs Bell US$200,000 annually, for which it gets to suggest targets for law enforcement and to utilize the MPAA’s anti-piracy resources. Bell the only Canadian company in the motion picture association backed alliance.

Bell’s emergence as one of Canada’s most aggressive copyright lobbyists and litigators has major implications for future copyright reform in Canada. Leaving aside its enormously problematic NAFTA proposals, Bell seems likely to split from the rest of the industry when it comes to future copyright reform issues. While Rogers, Telus, and the rest of the telecom and ISP industry are likely to maintain support for copyright balance (including intermediary safe harbours and the notice-and-notice system), Bell may focus on greater enforcement activities, with its support for website blocking and increased criminalization of copyright the most obvious manifestation of its changing policy position.

The post An Industry Divided: How Bell Broke With the Telecom Sector on Copyright appeared first on Michael Geist.

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.

Syndicate content