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Death Knell for the TPP: A Chance for Real Change to Trade Policy

Michael Geist Law RSS Feed - Thu, 2016/11/17 - 09:14

Donald Trump’s surprise U.S. presidential election victory promises to result in an overhaul of U.S. trade policy, including the immediate end of support for the Trans Pacific Partnership, the controversial trade pact involving 12 Pacific countries including Canada, the U.S., and Japan. While President Barack Obama held out hope that the TPP could be salvaged during the “lame duck session” of Congress that occurs immediately after the election, his administration was quickly forced to concede that the deal has become politically toxic and stands no chance of passage. Since U.S. ratification is required for it to take effect, it’s effectively dead.

My Globe and Mail column notes that the Canadian government’s view of the TPP was always difficult to discern. It was negotiated by the previous Conservative government, but Prime Minister Justin Trudeau and International Trade Minister Chrystia Freeland have been non-committal, focusing instead on TPP public consultations that are still scheduled to run until early 2017.

Their ambivalence was not a function of trade skepticism – the Liberals emerged as enthusiastic backers of the trade deal between Canada and the European Union – but rather stems from the recognition that Canadian interests in the TPP were largely defensive in nature. With agreements already in place with many TPP countries, the agreement offered at best limited benefits for Canada’s economy.

Without a TPP, much of the attention has shifted to developing a Plan B. Those discussions typically involve identifying with whom to negotiate. The list is headed by the possible renegotiation of NAFTA, implementing CETA, and shifting toward bi-lateral agreements with leading economies in Asia. Canada reached a deal with South Korea on a free trade deal in 2014 and has engaged in talks with Japan, India, and China about similar agreements.

Yet the how of negotiation may be more important than the who. The public backlash against the TPP, CETA, and other recent trade deals points to a process that leaves many feeling excluded and terms that are presented publicly for the first time as final. The real opportunity for the Canadian government is not just to explore new trade partners, but to challenge some of the longstanding assumptions about free trade agreements in order to foster greater public confidence in the outcome. The full column focuses on three issues: transparency, regulatory agreements masked as trade deals, and the need to drop ISDS provisions.

The post Death Knell for the TPP: A Chance for Real Change to Trade Policy appeared first on Michael Geist.

Blacklock’s Reporter, the stories within the story

Fair Duty by Meera Nair - Wed, 2016/11/16 - 00:46

On 10 November 2016, Justice Barnes of the Federal Court released his decision for Blacklock’s Reporter v. Canada (A. G.), a case involving unauthorized circulation of two news articles among a handful of staff members working within the Federal Government. The articles had been legitimately obtained via an individual subscription to the site Blacklock’s Reporter, but the copyright owners claimed that the subsequent downstream uses were infringement. Justice Barnes disagreed, and declared fair dealing. “There is no question that the circulation of this news copy within the Department was done for a proper research purpose. There is also no question that the admitted scope of use was, in the circumstances, fair (para 33).”

Briefly, the two articles were read by Sandra Marsden, President of the Canada Sugar Institute, through her own subscription to Blacklock’s ReporterShe subsequently shared the content with Patrick Halley of the International Trade Policy Division of the Federal Government, who in turn passed the articles on to five other staff members. Throughout, their concern was the manner in which information provided by Marsden and Stéphanie Rubec (a government media relations officer) was used and not used, respectively.

In the eyes of the copyright owners, the sharing by Ms. Marsden, and the subsequent sharing within the department, were a violation of the terms and conditions governing the use of the news service. In the claim, Blacklock’s Reporter sought compensation, not by way of six individual subscriptions (each priced at $148), but via a department-wide site license of $17,209. At the end of the day though, Justice Barnes was more than satisfied that the discrete sharing of articles was reasonable; it was fair dealing.

The decision handed down contains a few gems. One in particular is weighty in its simplicity: “The act of reading, by itself, is an exercise that will almost always constitute fair dealing even when it is carried out solely for personal enlightenment or entertainment (para. 36).”

The decision is well-written and straightforward; it brings to mind the comments of James Grimmelmann (Professor of Law, University of Maryland) after an American appeals’ court supported the HathiTrust initiative: “The [decision] is sober, conservative, and to the point; it is the work of a court that does not think this is a hard case.” The same could be said of Justice Barnes’ work. Indeed, during the trial, Graeme C. Gordon of Loonie Politics quotes Barnes as saying, “I don’t think this case is as profound as you and others made it out to be.”

But what might be routine in the hands of Justice Barnes is scarcely so for readers. Particularly given the detailed commentary provided during the trial by Loonie Politics (Day One begins here) and the Centre for Internet Policy and Public Interest Clinic (CIPPIC’s complete summary is here). Emotions on the side of Blacklock’s Reporter ran high–a naked hostility to fair dealing is evident. While that in itself is not surprising, the degree to which the Federal Government was targeted as a private market, is.

In fairness to Blacklock’s Reporter, such action did not appear to be a part of their initial business model. When the owners put up their shingle in 2012, they did so with noble aspirations—to return to the days when “newspapers were run by journalists for citizens,” with the aim of providing serious news about the functioning of government. At the time, writing for the Tyee, Shannon Rupp observed the goal as being a return to the “old-fashioned business model [when] newspapers were part of their community and their links with the audience were authentic, involving a mutual loyalty that served to maintain readership.”

Returning to the case in hand; news of this dispute was first brought to our attention by Teresa Scassa in August when she described the extent of litigation being brought forward by the news site:

[lawsuits are pending against] a total of 7 federal government departments and agencies and 3 Crown corporations and agencies. Blacklock’s provides articles on a subscription basis only; it accuses the various defendants of having accessed copies of its articles without having subscribed to the service and in breach of their copyrights. The defendants argue that Blacklock’s “employs a pattern of writing misleading or inaccurate articles about an organization with the expectation that these articles would be accessed and shared internally.” They then allege that Blacklock’s files access to information requests to uncover details of such access and distribution in order to issue claims for damages for copyright infringement. Essentially, they contend that Blacklock’s is engaged in copyright trolling.

Justice Barnes did not address the allegation of trolling but did remark that “there are certainly some troubling aspects to Blacklock’s business practices (para. 22).” These aspects are described by Graeme C. Gordon on Day 4 of the trial:

… there were two witnesses — one from Canadian Museum of History and the other from Canadian Mortgage and Housing Corporation — who both gave testimony of their poor experiences with Blacklock’s.  One of the witnesses said she felt “sort of duped into creating this situation.”  She also said Koski “didn’t seem to be accepting the answers that I was giving him” and that he wrote negative articles that were “misleading” and “misrepresenting” of facts.

CIPPIC indicates that the Museum of History and the Mortgage and Housing Corporation each acquiesced to demands for a $12,000 fee rather than face a legal challenge. CIPPIC also draws attention to the unwillingness of Blacklock’s Reporter to include a comment sent by a staff member in connection to the sugar tax story, before the article was posted:

Ms. Rubec stated that she had spent hours providing a comment only to be told Blacklock’s would print that the Department had provided “no comment”, she had followed up with an email the evening prior to publication, and still the article was not updated when it went live the following morning. She testified that she had been “frustrated” by the exchange.

Justice Barnes addresses this point and adds a footnote that must not be missed: “Not withstanding Ms. Rubec’s several on-the-record responses, [the article] improperly attributed “no comment” to the Defendant. This is a practice Mr. Korski adopts when he does not accept or approve of the answers he is given from a source; see Exhibits … and confirmed by Mr. Korski’s testimony (para.9 / footnote 1).”

Returning to the dispute itself, Justice Barnes brings much-needed clarity to the manner in which terms and conditions, when unilaterally imposed upon consumers, must be interpreted:

As the drafter of [its stipulated terms and conditions], Blacklock’s is bound to the interpretation most favourable to the users of its copy which, in this case, permitted Ms. Marsden’s distribution to the Department for a non-commercial purpose, and by implication, permitted a similar use by Mr. Halley (para. 43).

In his analysis of the unauthorized use, Justice Barnes begins with the observation that fair dealing “is a well-recognized right under the Act (para. 24),” and later confirms that neither copyright owners nor copyright users are permitted to pick and choose which parts of the system of copyright they will adhere to: “Absent consent, subscribers and downstream users are subject to the obligations imposed upon them by the [Copyright] Act. But at the same time they enjoy considerable protection afforded to them under the statutory fair dealing provisions (para. 44).”

And, with what might be my favorite remark, Justice Barnes firmly rejects the all-too-often asserted claim that every use of a copyrighted work represents lost income and thus must be compensated for:

It also goes without saying that whatever business model Blacklock’s employs it is always subject to the fair dealing rights of third parties. To put it another way, Blacklock’s is not entitled to special treatment because its financial interests may be adversely affected by the fair use of its material (para 45).

Readers may be curious, as I was, about the ancestry of the Blacklock in Blacklock’s Reporter. The news site takes its name from the late Thomas H. Blacklock (1873-1934), a revered member of the press from a bygone era. His career as a journalist including writing for multiple organizations within Canada as well as covering WWI. Respected by colleagues and readers alike, he was one of Canada’s best political correspondents of the early 20th century. At the time of Blacklock’s death, Prime Minister Robert Borden recounted this story:

In one of the campaigns when Mr. Meighen and Mr. King were rivals, they engaged in long-range verbal hostilities that were rather ineffective on both sides. Blacklock became impatient and wrote to Meighen a letter which Tom afterwards showed to me. It was keenly critical of the course Meighen was pursuing; and I recall one phrase which ran something like this: ‘Please bear in mind that the people of Canada are not in the least interested in your opinion of Mr. King or in Mr. King’s opinion of you.’ Meighen took the letter in very good part; and showed it to several of his friends. …
[Blacklock] was a rare spirit, and his memory will not pass from those who knew him best.
– Sir Robert Laird Borden, Letters to Limbo, University of Toronto Press (1972)

The Right Honorable Arthur Meighen spoke at Blacklock’s funeral, saying “there would be few citizens of Canada … whose passing would leave behind so many to speak well of their life and work (The Border Cities Star, 6 August 1934).”

During the trial Blacklock’s Reporter argued that, in order to sustain its operations, it was essential to aggressively police its copyright. Be that as it may, if aggression means misrepresenting facts in order to mount a sting operation, the organization ought to consider changing to a more appropriate name, one without the baggage of ethics and civility.

Commentaries on this decision abound; see Teresa Scassa, Howard Knopf, Michael Geist, Adam Jacobs. But CIPPIC shall get the last word: “The decision represents a solid affirmation of fair dealing rights, and one that should serve to deter copyright trolls from bringing meritless claims against obvious fair dealing practices in the future.”

 


The Billion Dollar Question: How to Pay for Melanie Joly’s Digital Cancon Plans

Michael Geist Law RSS Feed - Tue, 2016/11/15 - 10:57

As Canadian Heritage Minister Melanie Joly’s consultation on Canadian content in a digital world nears its conclusion – comments are due by November 25th – the big issue remains how to pay for an ambitious culture agenda. Joly has emphasized the benefits of expanding exports, which she hopes will bring foreign dollars and more foreign investment in the sector. While a stronger global presence makes sense, many of the established cultural groups have voiced opposition to measures designed to attract greater foreign participation if it risks reducing the guaranteed Canadian role in productions.

For example, the CRTC’s decision to loosen some Cancon rules has elicited ongoing anger, despite the fact that the change would likely make productions with foreign entities more attractive, thereby enlarging the overall size of the industry in Canada. With similar opposition to market-based reforms designed to reduce dependence on the current system (pick-and-pay television channels, gradual reduction of simultaneous substitution), there is little reason to believe that Joly can count on support for expanded exports to pay the bills.

This post unpacks some of the cultural policy options that have surfaced in recent weeks. The post stems from a panel discussion at the University of Ottawa featuring a paper by Richard Stursberg and commentary from myself, the Globe’s Kate Taylor (who covered the panel here), and ACTRA’s Ferne Downey (Stursberg’s paper is here, full video of the event here).

The broad range of funding possibilities fall into three categories: (1) increased revenues that are typically allocated toward “general revenues” (ie. go to the Department of Finance) but which could be earmarked for cultural funding; (2) new tax or levy plans that would be used to support the cultural sector; (3) other sources that derive from tax or cultural policies. I argue that the general revenue approach is the preferred one, given the benefits of new funding and without the significant drawbacks of the expansion of taxes or levies. Not discussed during the panel was the expansion of tax credits, which has the benefit of rewarding actual investment in the sector.

As I noted during my remarks at the University of Ottawa panel, any discussion of increased culture funding should include the context for how much public money is already allocated toward supporting the sector. According to the CMPA, nearly $3 billion was spent on film and television production in Canada in 2014-15. That represents a $230 million increase from the prior year and $500 million more than five years earlier.  The public already pays for nearly half of this through tax credits (18% of the total costs from tax credits from federal and provincial governments) and various levies and granting programs. Further, the more than $1 billion in public support does not include the hundreds of millions that goes toward supporting the public broadcaster, the music industry, publishing industry, and video game industry. In other words, Canadians already invest heavily in supporting the cultural sector through taxpayer funded grants and credits.

Notwithstanding the existing support, there is pressure from some groups for more money (interestingly, I also participated earlier this month in a panel sponsored by Telus that primarily featured artists and producers from the west who emphasized marketing and global opportunities, not more funding). There are many possible sources of new revenues beyond more global success and partnerships, but all are not created equal. The remainder of this post highlights many of the possibilities: general revenues including digital sales taxes and spectrum licensing; new levies or taxes including a Netflix tax, Internet tax, and copyright link tax; and cultural or tax policy including benefits packages, tax credits, and digital advertising tax reforms.

A.    General Revenues

1.    Digital Sales Taxes

If there is one form of new revenue that generates an easy consensus, it is that foreign digital services with a sizable Canadian consumer base should pay digital sales taxes such as GST or HST. These taxes should technically be paid by consumers self-reporting what they owe, but few take the time and effort to do so. If sales taxes are to be applied equally, an unequal form of collection will not work.

Instead, digital services that meet a certain threshold for Canadian revenues should collect and remit the sales taxes. There are no shortage of arguments in favour of expanding sales tax collection in this manner: it creates a level playing field (Canadian services such as CraveTV collect HST but Netflix does not), generates additional revenues, and a growing number of countries have moved in this direction. While are some enforcement challenges and questions about appropriate thresholds for collection, digital sales taxes seem inevitable. As with all revenues of general application, however, there are no guarantees that the revenues will be directed toward cultural industries.

2.    Spectrum Licensing

The Canadian government generates significant revenues from licensing spectrum. According to the Ministry of Innovation, Science, and Economic Development, the government collects approximately $1 billion per year in direct revenue and another $180 million in licensing revenue. The spectrum proceeds go to general revenues. However, many have argued that the money should be re-allocated back into the network.  Indeed, spectrum revenues could help pay for programs designed to ensure affordable access to Internet services for all Canadians as well as for activities on the network, including the cultural industries.

B.    New Taxes or Levies

3.    Netflix Tax

The imposition of a “Netflix tax” is undoubtedly the most controversial new potential tax or levy.  The government is on record on the issue: no new Netflix tax. Yet notwithstanding those public statements, the prospect of millions in new revenues may be too tempting to resist (Stursberg advocates for a new contribution requirement in his paper).

Typically described as a Netflix tax, the proposals are neither limited to Netflix nor technically a tax. Rather, the Netflix tax would seek to extend the current contribution requirements on broadcast distributors to online video services such as Netflix. Supporters of the plan argue that given the growth of Netflix, the contribution requirement would generate tens of millions of dollars and help offset the likely decline in contributions from cable and satellite companies as more consumers cut the cord.

While there may be a superficial appeal to a new contribution requirement on Netflix, there are many problems with the proposal. First, online video has become a staple for a wide range of sites from giants such as Netflix to newspapers that incorporate video into their sites to independent film sites that may use YouTube to distribute their content. Identifying the limitations of a contribution program is difficult and there is a danger that the proposal quickly becomes a tax on all Internet content.

Second, conventional broadcast distributors and Netflix may look similar, but they are very different. Conventional broadcast distributors retransmit over-the-air broadcast channels at no cost, whereas Netflix licenses or creates all the content on its platform. Indeed, the contribution from broadcast distributors may reasonably be viewed as compensation for benefiting from a retransmission system at no cost for content. Netflix is very different – it pays for content and transmission, enjoying none of the benefits accorded to broadcast distributors.

Third, there are obvious enforcement concerns. Netflix and Google argued during a CRTC hearing in 2014 that their activities fall outside Canadian broadcast regulation. The laws could be changed, but not without a legal challenge over the reach of Canadian law. In fact, even if Netflix (with its many Canadian subscribers) does fall within Canada’s reach, the extension of a levy to online video providers still raises questions about which services should or could be caught by the jurisdictional net.

Fourth, the Trans Pacific Partnership is in trouble, but if Canada moves forward with the deal, it will have agreed to no limitations on access to foreign video providers and no discriminatory payment requirements. In other words, no Netflix tax.

4.    ISP or Internet Tax

If a Netflix tax were not enough, there is mounting concern that Joly may be pressuring cabinet colleagues to support an Internet tax on ISPs and digital services. A levy on Internet service has long been the holy grail for the cultural industries, who argue that broadcast on the Internet is the functional equivalent of conventional broadcast and that both should face similar funding requirements. Demands for such a tax have come from cultural groups such as the Canadian Independent Music Association, which recently called for mandated contributions to support the development of Canadian content, and ADISQ, which has previously lobbied for a similar policy approach.

When asked about the issue several weeks ago on CTV’s Question Period, Joly stated:

I’ve said that we’re willing to have a conversation with digital platforms. Netflix is one of them. There are Amazons, Hulus, Apple. There are big companies that are part of our ecosystem, that are used and liked by Canadians. This is why we want to make sure that we know that they are using a large part of our spectrum that we can have a conversation with them to see how they can participate.

The comment suggests that Joly subscribes to the view that there is a parallel between conventional broadcast and the Internet that invites a similar regulatory approach. Part of the rationale for broadcast regulation is that broadcast spectrum is scarce, therefore requiring licensing and regulation. By indicating that Internet services use a “large part of our spectrum”, Joly is making the case for treating Internet services as equivalent to broadcast. Moreover, Joly speaks of the need to have a conversation with Internet services “to see how they can participate.” Services such as Hulu and Amazon’s streaming service are not even available to Canadians, but even with those services that are (such as Netflix), the notion of exploring how they can participate again assumes a regulatory approach in which offering a service leads to regulated participation in the Canadian system.

To date, the law has not supported that argument with the Supreme Court of Canada ruling in 2012 that ISPs are not “broadcast undertakings” for the purposes of the Broadcasting Act.  However, Joly’s legislative overhaul could involve changing the law to allow for the imposition of new fees on Internet services.

The ISP tax would come at an enormous cost to other policy priorities. Internet access in Canada would become less affordable, expanding the digital divide by placing Internet connectivity beyond the financial reach of more low-income Canadians. The tax would be particularly damaging in indigenous communities. The increased costs would also be felt by the business community, potentially undermining the innovation strategy currently championed by Navdeep Bains, the Minister of Innovation, Science and Economic Development.

An Internet or ISP tax is largely premised on the argument that ISPs and Internet companies owe their revenues to the cultural content accessed by subscribers and they should therefore be required to contribute to the system much like broadcasters and broadcast distributors. The reality, however, is that Internet use is about far more than streaming videos or listening to music. Those are obviously popular activities, but numerous studies (CIRA, Statistics Canada) point to the fact that they are not nearly as popular as communicating through messaging and social networks, electronic commerce, Internet banking, or searching for news, weather, and other information. From the integral role of the Internet in our education system to the reliance on the Internet for health information (and increasingly tele-medicine) to the massive use of the Internet for business-to-business communications, Internet use is about far more than cultural consumption. Given its importance to virtually all aspects of modern day life, there are few policy goals more essential than ensuring that all Canadians have affordable access to the network.  That goal would be badly undermined by an Internet tax that would increase consumer costs and stymie Canadian innovation.

5.    Copyright Link Tax

The government is scheduled to conduct a full copyright law review in 2017, but that has not stopped some groups from pointing to copyright reform as a source of new revenues for the sector. For example, Duff Jamison of the Alberta Weekly Newspaper Association told the Standing Committee on Canadian Heritage:

I do think that copyright laws were designed before we had this mass digital distribution of content. They probably need to be reviewed and brought up to date, so that there is a means…. We put in a possible suggestion. If you click through to a journalist’s story, then at that point perhaps that journalist and the newspaper that employs him should receive a payment. There are ways to get at this.

Jamison’s comments point to a new copyright link tax. The link tax proposal, which has gained traction in Europe, speaks to the possibility of requiring compensation for merely linking to an article. Yet as the Supreme Court of Canada noted in the Crookes case involving links:

The Internet’s capacity to disseminate information has been described by this Court as “one of the great innovations of the information age” whose “use should be facilitated rather than discouraged”.  Hyperlinks, in particular, are an indispensable part of its operation.

The Internet cannot, in short, provide access to information without hyperlinks.  Limiting their usefulness by subjecting them to the traditional publication rule would have the effect of seriously restricting the flow of information and, as a result, freedom of expression.  The potential “chill” in how the Internet functions could be devastating, since primary article authors would unlikely want to risk liability for linking to another article over whose changeable content they have no control.  Given the core significance of the role of hyperlinking to the Internet, we risk impairing its whole functioning.

While the Crookes case involved defamation, the Court clearly understood the importance of linking to freedom of expression. Attempts to limit linking – whether by regulation or the imposition of fees – would undermine critical freedoms.

Moreover, creating a link tax would likely mean that sites and search engines stop linking to certain kinds of content. Such an approach would hurt independent creators and others who are dependent on links to find their audiences.

C.    Cultural and Tax Policy

6.    Benefits Packages

An oft-overlooked source of revenue, benefits packages are created where there is a change in control/merger in the communications sector. Given the number of transactions in recent years, there is a considerable amount of money currently in the system. According to some estimates, benefits packages have already provided hundreds of millions of dollars and will provide $420 million more over the next five years. Any calculation of cultural revenues should take this source into account.

7.    Expansion of Tax Credits

Tax credits are commonly used by federal and provincial governments to support the cultural industries on the premise that public support should be contingent on private investment. The value of the tax credits runs into the hundreds of millions of dollars every year. As noted above, the CMPA data indicates that last year the value of federal and provincial tax credits for film and television production was over $500 million. Tax credit programs similarly sit at the heart of support for the video game industry, where provinces compete with other jurisdictions to attract companies based on generous tax credit programs. Looking ahead, a rationalization of the tax credit system for the cultural sector is long overdue and would be provide a far better sense of the full scope of taxpayer support for the industry.

8.     Digital Advertising

The Stursberg paper emphasizes the need to target digital advertising, focusing on two issues.  First, he discusses applying digital sales taxes to large firms such as Google and Facebook that dominate the digital advertising space. Much like applying GST/HST to Netflix, sales taxes on digital advertising should be similarly uncontroversial. However, unlike consumer purchases such as Netflix subscriptions, digital advertising in typically a business-to-business transaction with some of those revenues offset by the GST/HST paid by the firms.

Stursberg also recommends changing the Income Tax Act by removing the availability of tax deductions for advertising through services such as Google and Facebook. Stursberg believes that removing the deduction will increase advertising on traditional Canadian-based services and sources. As I noted during the panel, I think he’s wrong and misunderstands how digital advertising works.

First, digital advertising is a function of the audience. Given that more and more people are shifting their viewing and media consumption habits from offline to digital, advertisers are unsurprisingly following their audience. A change in the tax code will not result in a shift to less effective advertising venues.  Rather, it will simply make the digital advertising more expensive and leave Canadian business less competitive in the digital marketplace.

Second, digital advertising with companies such as Google typically involves a revenue share between Google and the site where the advertising appears. In other words, the advertising is on the same Canadian sites that Stursberg wants to support. That revenue goes to Google, which then sends a portion back to the site or media organization.  There is a reasonable debate to be had over the dominance of Google and Facebook in the digital advertising sector, but cutting the flow of dollars to those companies will do little to actually help Canadian organizations seeking to attract digital ad dollars.

The post The Billion Dollar Question: How to Pay for Melanie Joly’s Digital Cancon Plans appeared first on Michael Geist.

Federal Court Rules Against Blacklock’s: Business Models Always Subject to Copyright Fair Dealing Rights

Michael Geist Law RSS Feed - Fri, 2016/11/11 - 11:22

The Federal Court of Canada issued its much anticipated copyright decision yesterday in the lawsuit launched by Blacklock’s Reporter, an Ottawa-based online paywalled news site, against many government departments. I discussed the case in a Canadaland podcast earlier this year, highlighting some of Blacklock’s business strategies that include using the access to information system to trace the use of its articles by government subscribers and recipients of articles from third parties. Blacklock’s sued the Department of Finance for $17,209.10 over two articles that were sent to government officials from a paying subscriber concerned with comments found in the article. The articles were subsequently forwarded to several media relations personnel within the department.

The court acknowledged that there are concerns with some of Blacklock’s business practices (the government argued that it engages in copyright trolling), but concluded that it could address the case with only a fair dealing analysis. Affirming well established Supreme Court jurisprudence on fair dealing, the court emphasized that fair dealing is a user’s right that must not be interpreted restrictively. In this case, the court had little trouble finding that the department’s use of the articles qualified as fair dealing given that it was done for a proper research purpose, involved a limited distribution, the originals were obtained legally by a paying subscriber, and officials had a legitimate interest in reading the articles in order to hold Blacklock’s to account for questionable reporting.

The recognition of the right to read is particularly noteworthy:

What occurred here was no more than the simple act of reading by persons with an immediate interest in the material. The act of reading, by itself, is an exercise that will almost always constitute fair dealing even when it is carried out solely for personal enlightenment or entertainment.

While Blacklock’s tried to rely on its website terms and conditions to argue that the subscriber should not have forwarded the articles, the court ruled that it failed to ensure that subscribers were aware of the contractual limitations. More importantly, the court stated that it could not apply the terms to downstream users such as the government officials, adding “it also goes without saying that whatever business model Blacklock’s employs it is always subject to the fair dealing rights of third parties.”

Some have expressed concern that the ruling may harm paywall business models, but as the court notes:

Nothing in these reasons should however be taken as an endorsement of arguably blameworthy conduct in the form of unlawful technological breaches of a paywall, misuse of passwords or the widespread exploitation of copyrighted material to obtain a commercial or business advantage.

In other words, the foundation of a paywalled business model is not implicated by this decision.  Rather, this ruling rightly applies fair dealing, consistent with the growing number of Canadian cases that have emphasized the importance of granting user’s rights a large and liberal interpretation.

The post Federal Court Rules Against Blacklock’s: Business Models Always Subject to Copyright Fair Dealing Rights appeared first on Michael Geist.

Trump Victory May Kill the TPP, But Reopening NAFTA Could Bring Back the Same IP Demands

Michael Geist Law RSS Feed - Thu, 2016/11/10 - 11:08

Donald Trump’s stunning win of the U.S. Presidency on Tuesday night has sparked numerous articles speculating about the implications for various policies and issues. Given how little Trump said about digital policy, predictions about telecom or IP policy are little more than educated guesses. Trade policy was a major Trump issue, however, as his opposition to the Trans Pacific Partnership and vow to renegotiate NAFTA was repeated at virtually every campaign stop.  Senate Majority Leader Mitch McConnell confirmed yesterday that the TPP would not be brought up for a vote this year, leaving Trump to decide on its future. Officials in other TPP countries such as Australia, New Zealand, and Malaysia have now acknowledged that the TPP is likely dead.

From a Canadian perspective, the end of the TPP should mean renewed efforts to negotiate bi-lateral trade agreements with Japan, India, and other leading Asian economies. While those agreements could result in more traditional trade agreements focused on tariff reduction, the U.S. trade relationship seems likely to be dominated by the possible renegotiation of NAFTA. No one is sure if Trump will really demand a NAFTA renegotiation, but Canadian Ambassador to the U.S. David McNaughton has already said that Canada is prepared to talk about revisiting aspects of the 1994 agreement.

If NAFTA is reopened, the U.S. will likely use the opportunity to reinsert the TPP intellectual property provisions into the agreement. NAFTA contains some IP provisions, but it is not nearly as detailed or prescriptive as today’s typical U.S. trade deal which place an enormous emphasis on exporting U.S. copyright rules, expanding patent protections, and increasing IP enforcement provisions. Consistent with those policy goals, the TPP contains IP rules that would require amendments to Canadian law, notably extension in the term of copyright, patent law changes, expanded border measure rules, criminalization of trade secret law, and trademark reforms.

The TPP may be stalled for now, but a re-opening of NAFTA would likely be used by Trump Administration to advance the same IP policies (which some in the U.S. argue do not go far enough). In other words, when it comes to IP and digital policies, a new NAFTA could become Canada’s own private TPP.

The post Trump Victory May Kill the TPP, But Reopening NAFTA Could Bring Back the Same IP Demands appeared first on Michael Geist.

What does a Trump presidency mean for media and communications?

Sara Bannerman - Thu, 2016/11/10 - 10:51
Have American media helped elect a president that will contribute to the decline of press freedom?  Yes, they have.  Trump's presidency also may mean the end of net neutrality, the rise of internet tracking, and the rise of alt-right-wing media.

Trump has derided mainstream media and journalists as dishonest and corrupt.  As Justin Peters comments, "He represents a group of people who see a strong independent press not as a necessary check on accumulated power in America but as a bothersome impediment to the accumulation of that power. And he will almost certainly use the office of the presidency to bring the press to heel."  His opposition  to journalists goes beyond derision and antagonism to threaten its very freedom; Trump is known for suing journalists and he has threatened to "open up" libel laws to make it easier for public figures to sue the press:
One of the things I'm going to do if I win, and I hope we do and we're certainly leading. I'm going to open up our libel laws so when they write purposely negative and horrible and false articles, we can sue them and win lots of money. We're going to open up those libel laws. So when The New York Times writes a hit piece which is a total disgrace or when The Washington Post, which is there for other reasons, writes a hit piece, we can sue them and win money instead of having no chance of winning because they're totally protected.Journalists and media outlets have only begun to ask what approach and tone they will take in their coverage of Trump.  Will their approach be conventional and traditionally adversarial, or oppositional?  But the threat of libel lawsuits and the decline of advertising dollars could restrict their scope of action.

Trump has opposed potential mega-media mergers while favouring alt-right media and social media.  He has expressed opposition to mergers between AT&T and Time Warner, and Comcast and NBC Universal.  His opposition to free trade could impact foreign (and especially Chinese) investment in Hollywood and US content producers (Lieberman).  Meanwhile, alternative media like the Breitbart Report, which supported Trump, are now set to expand internationally, seeking to "monetize the anger and anti-immigrant sentiment unleashed by Donald Trump’s successful presidential campaign"  (Flitter).

Trump's presidency will affect the leadership and composition of the FCC.   It will mean a change of leadership, as the chair traditionally leaves office when a new President is elected.  Democratic Commissioner Jessica Rosenworcel may have to step down at the end of the year if her re-nomination is not confirmed by the Republican majority Senate.  The balance of power in the FCC will shift Republican  (Silbey).  Broadcast attorney David Oxenford has speculated that this well  mean “a lessening of the regulatory burden on broadcasters" (McLane).

Trump has opposed net neutrality, siding with ISPs over Amazon, Netflix, and other services (Glaser).  This could make it easier for ISPs to charge internet companies like Netflix for faster speeds.  Trump's presidency could also lead to the overturning of recently-passed regulations that require ISPs to obtain explicit consent from their subscribers before selling their data to marketers (Glaser).

As on many policy issues, Trump has said little that indicates his stance on intellectual property, other than complaining about Chinese theft of American intellectual property (Standeford).
American media have contributed to the rise of a president who could change the entire landscape of media, press freedom, and the communications industry.

More readingJournalismFCC RegulationNet NeutralityMedia OwnershipTelecommunications  OwnershipIntellectual Property

Universalizing fair use: An important Argentinian proposal

Sara Bannerman - Mon, 2016/11/07 - 14:56
The government of Argentina has submitted an important proposal in current negotiations towards an international instrument on limitations and exceptions to copyright at the World Intellectual Property Organization (WIPO).

Most international treaties seek to establish minimum standards.  In the case of the current WIPO negotiations, relating to exceptions and limitations to copyright for education and research institutions and persons with disabilities, this means that all countries would agree to permit a minimum set of things, such as permitting photocopying for classroom use or reproduction for classroom display.

As the Argentinian government notes, this often does not go far enough, especially in the online context, since countries invariably differ widely in their implementation of such minimum standards, and digital transactions often involve multiple country jurisdictions.

Many everyday actions done in the context of educational institutions potentially involve multiple jurisdictions, and could be legal in one jurisdiction but not in the other:
  • playing an Internet video from a web site based in one country in the classroom of another;
  • uses of works in distance education, where students may be based in a different country from the instructor;
  • downloading works from a web site in another country for educational purposes;
  • making available or sending articles, texts, or digital course packs from one country to another.
Understanding the legality of any of these actions, along with many others, currently involves expensive legal analysis of the copyright regimes of multiple countries--an untenable situation for educational institutions, as the Argentinian government notes.

Argentina therefore proposes that "within the scope of a treaty on limitations and exceptions, lawful conduct in one territory should not be illegal in another. If reproduction or making available is valid under the treaty, it cannot then be invalid under the rules of another State jurisdiction." (p. 4).  The exact wording of the proposal is as follows:
Where performed in accordance with the exceptions and limitations set forth in this agreement, the reproduction or making available of a work shall be governed by the law of the country in which the reproduction or making available occur, without precluding the reproduced work from being delivered to or used by a person or institution benefitting from exceptions and limitations located in another Member State, provided that such delivery or use is consistent with the terms and conditions set forth in this agreement. (p. 4).The Argentinian government has proposed a solution worthy of serious discussion at the WIPO meeting to be held next week.


The Missing Public Voice: My Comments on the Copyright Board at the Senate Banking Committee

Michael Geist Law RSS Feed - Mon, 2016/11/07 - 10:36

The Senate Standing Committee on Banking, Trade and Commerce conducted two days of hearings last week on the Copyright Board of Canada. The hearings featured members from the Board, leading copyright collectives and associations, and a panel of individuals that included law professors and practitioners. Ariel Katz and Howard Knopf have already posted their opening remarks. My comments, which focused on the importance of the public interest in Copyright Board decision making and the need for greater public participation, is posted below.

Appearance before the Senate Standing Committee on Banking, Trade and Commerce, November 3, 2016

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. My area of specialty is digital policy, with an emphasis on intellectual property. I have been very active on copyright issues for many years, editing three books on Canadian copyright reform and court jurisprudence and regularly appearing before committees on the issue.

I appear today in a personal capacity representing only my own views.

There is no shortage of criticism of the Copyright Board. Indeed, in an field that is often sharply divided, disenchantment with Board is sometimes the one thing people seem able to agree on.

It seems to me that the criticism typically comes down to two issues: the substance of decisions and the way those decisions are rendered.  I think this committee should pay little attention to substantive criticism of Copyright Board decisions. As former Chair of the Board Vancise noted earlier this year, criticism of the substance of decisions usually comes down to “whose ox is being gored.”  In other words, if you like decision, you’re ok 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 very slow in acknowledging and implementing the copyright decisions delivered by the Supreme Court of Canada, particularly around fair dealing. That has changed in recent months, 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.

We have thus far seen two different initiatives aimed at identifying potential reforms. The Board itself established a working group of lawyers and experts who regularly appear before it as part of a consultation process. The process did not go far with some seemingly reluctant to criticize the Board and its processes on the record.

More recently, as you know, there have been two important studies conducted by Professors de Beer and Daly with more extensive recommendations.  I think those studies are enormously valuable contributions and provide insightful recommendations on potential reforms.

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 Copyright Board decisions beyond the immediate parties, timeliness is crucial. We see that in many others areas – CRTC decisions for example – which provides all parties with greater certainty about timelines and reduces costs that come from long delays and retroactive application of decisions.

Yet beyond timeliness, I would like to focus on the lack of public participation in board processes.

The exclusion of the public stands in sharp contrast to the other boards, tribunals, and agencies that address issues with individual parties but whose decisions have ramifications for a far broader group of stakeholders.

For example, the CRTC and Competition Bureau 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 current differential pricing hearing, being conducted this week, it found a number of ways to engage the public, including discussions on the website Reddit. All of this participation, goes into the public record, allows for better informed decision makers, and leads to greater confidence in the decisions themselves. By contrast, the Copyright 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 about accessibility and participation concerns, the board pointed to the 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. The impact of its decisions extend far beyond the limited number of parties that participate in the hearing, yet it thinks its stakeholders are limited to IP lawyers and copyright collectives.  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.

I look forward to your questions.

The post The Missing Public Voice: My Comments on the Copyright Board at the Senate Banking Committee appeared first on Michael Geist.

what is Canadian content?

Fair Duty by Meera Nair - Sun, 2016/11/06 - 22:35

The mantra that our cultural creators are essential to the soul of Canada is doing double duty these days. Not only is it invoked in connection to the pending copyright review, but it has provoked a public consultation regarding Canadian content in a digital world. Melanié Joly, Minister of Canadian Heritage, caught the attention of many when she publicly supported the claim that the internet is only a vehicle for consumption of culture with, as Michael Geist writes, culture being confined to “movies, television or music.”

Thoughtful words from @patrickwatson “Without culture, nobody would be on the internet” #DigiCanCon #cdnpoli https://t.co/jRr5w7eXoy

— Mélanie Joly (@melaniejoly) October 29, 2016

It seems that on Minister Joly’s internet, worldwide networks only function in service of those industries that make an obvious contribution to GDP, be it in Canada or in another country. On her internet, there is no plethora of public domain content collected by volunteers and posted (legitimately) at Project Gutenberg or IMSLP. There is no impetus to share knowledge in the selfless manner exhibited by Sal Khan (founder of the Khan Academy) or John Page (a Silicon Valley software engineer who sought a better solution to mathematics instruction than the weighty tomes inflicted upon his son). There are no scholarly repositories, managed online, such as those pertaining to Emily Dickinson or L.M. Montgomery. There is no growing array of open-access quality-textbooks like those found at BC Campus or OpenStax.  And there are no individuals who facilitate the development of creative effort by sharing well-written, well-researched, and well-curated material. Maria Popova’s site BrainPickings comes to mind; it deserves to be declared an international treasure.

Those clamouring for Canadian content do not appear to give much thought as to what goes into developing that content. Financial well-being is as far as they go. Yet creative effort does not occur by the presence of money alone. Creativity needs knowledge, awareness, skill, diligence, luck, and something that lacks capture in a single word; loosely speaking, this indefinable element is a capacity to envision that which others may not.

That aside, the insistence on the importance of Canadian content invites the question – what is Canadian content?

My current assortment of library books includes two contenders. Dal and Rice is a memoir written by Wendy M. Davis describing life in pre and post-independence India. Davis was born in England, but resides in Edmonton; as best as I can tell, the work was written in Canada. Moreover, Dal and Rice was published by McGill-Queens Press. I will tentatively say that this is Canadian content.

But I am less certain about the second book; Eleanor Wachtel’s compendium The Best of Writers & Company. I am sure it would be declared Canadian content, given the unimpeachable fact that Wachtel is a Canadian citizen by birth, and has remained here throughout the development of her admirable career. Published by Biblioasis (the regional press that commands national acclaim), the Canadian qualifications appear unassailable.

And yet, the majority of the content is the handiwork of others. The book is a compilation of the transcripts of fifteen interviews conducted by Wachtel. True, Wachtel writes the introductory text that prefaces each interview, and Wachtel shapes the dialogue by posing the questions. But it cannot be said that she wrote the responses. Those words are (presumably) the independent creation of her fifteen subjects, only three of whom are identified as Canadian (Ann Griffin, Alice Munro and Mavis Gallant).

Perhaps the hint of Canadian’ness lies in the front matter. Both books acknowledge contributions from Canadian taxpayers through the Canada Council for the Arts and the Book Publishing Industry Development Program. It sounds crass, to reduce the dialogue of Canadian letters to a matter of money, to have the temerity to ask: who paid for it? But it cannot be ignored that the patriots of Canadian content are expressly concerned with a similar question: who pays for it?

The answer, in terms of the consultation, is pointing towards a levy on the revenues of internet service providers. This mandatory contribution would be channeled towards continued development of Canadian content. In October, writing for the Financial Post, Josh Tabish of Open Media reminded all Canadians that our internet services fees are among the highest in the world. (It is no exaggeration to say that for Canadian families living in poverty, internet service already competes with food.) Three weeks later, Tabish and Denise Williams (a Coast Salish member of the Cowichan Tribes) writing for Motherboard, offered a further reminder that heightened internet service fees would hit indigenous communities the hardest.

No government should be so naïve as to believe that fees imposed on internet service providers in Canada will not be passed on to consumers. Whether it is called a levy or a tax will make no difference. As to whether the dollars accumulated will translate to more Canadian content, we will have to wait and see. The only assured outcome is less money with which even to purchase our much-vaunted Canadian content, creating the peculiar paradox of less content for Canadians.

Fortunately, the fact is that the internet will still provide delightful, educational, thought-provoking, and endearing content for everyone, from everywhere.


Does IP have a role in sustainable development? Of course it does!

Sara Bannerman - Sat, 2016/11/05 - 23:45
Does intellectual property have a role in sustainable development?  Of course it does!  But the World Intellectual Property Organization, a UN agency, seems uncertain as to whether it has a role to play in implementing the UN's Sustainable Development Goals (SDGs).

As I note in a draft book chapter, WIPO's preliminary analysis of the ways in which its work supported SDGs viewed most of WIPO’s work as contributing to SDG 9, the building of infrastructure and industrialization, as well as goal 8, that of economic growth.

Surprisingly few of WIPO’s activities were viewed by WIPO as contributing to the SDGs of education, hunger, protecting biodiversity, combating climate change, or ensuring human health.

"Developed" countries argue "that only a few goals apply to the work of WIPO, and others argue that there should be no ‘cherrypicking’ as all the goals in one way or another do apply to WIPO’s work as a UN agency."  The view of the "developed" countries, here, is completely ridiculous; it is clear that intellectual property plays an important role in relation to many SDGs, including those related to food and agriculture, health, innovation, climate change, biodiversity, and technology transfer.

The world intellectual property system, at present, also sometimes works contrary to achievement of the SDGs, by locking up agricultural innovation, inflating drug prices, stalling innovation, rewarding the invention and sale of dirty technologies, locking up biodiversity, and preventing technology transfer. There is no shortage of proposals for reform that would help to address these problems.  (See the work of Peter Drahos, Matthew Rimmer, and Ahmed Abdel-Latif, among  many others.)  Industry players note the important role of intellectual property  in potentially stalling climate-friendly innovation; this is why Tesla has adopted open patent policies to encourage the take-up and spread of electric vehicle technology.

WIPO and its member states should acknowledge the links between intellectual property and both sustainable and unsustainable development.  The UN sustainable development agenda requires WIPO, as a UN agency, and its member states to build and retool world intellectual property institutions for sustainable development. 

Lost Confidence: Why Trust in Canadian Surveillance Agencies Has Been Irreparably Harmed

Michael Geist Law RSS Feed - Fri, 2016/11/04 - 08:29

In the aftermath of the Snowden revelations in which the public has become largely numb to new surveillance disclosures, the Canadian reports over the past week will still leave many shocked and appalled. It started with the Ontario Provincial Police mass text messaging thousands of people based on cellphone usage from nearly a year earlier (which is not government surveillance per se but highlights massive geo-location data collection by telecom carriers and extraordinary data retention periods), continued with the deeply disturbing reports of surveillance of journalists in Quebec (which few believe is limited to just Quebec) and culminated in yesterday’s federal court decision that disclosed that CSIS no longer needs warrants for tax records (due to Bill C-51) and took the service to task for misleading the court and violating the law for years on its metadata collection and retention program.

The ruling reveals a level of deception that should eliminate any doubts that the current oversight framework is wholly inadequate and raises questions about Canadian authorities commitment to operating within the law. The court found a breach of a “duty of candour” (which most people would typically call deception or lying) and raises the possibility of a future contempt of court proceeding. While CSIS attempted to downplay the concern by noting that the data collection in question – metadata involving a wide range of information used in a massive data analysis program – was collected under a court order, simply put, the court found that the retention of the data was illegal. Further, the amount of data collection continues to grow (the court states the “scope and volume of incidentally gathered information has been tremendously enlarged”), leading to the retention of metadata that is not part of an active investigation but rather involves non-threat, third party information. In other words, it is precisely the massive, big data metadata analysis program feared by many Canadians.

The court ruling comes after the Security Intelligence Review Committee raised concerned about CSIS bulk data collection in its latest report and recommended that that inform the federal court about the activities. CSIS rejected the recommendation. In fact, the court only became aware of the metadata retention due to the SIRC report and was astonished by the CSIS response, stating that it “shows a worrisome lack of understanding of, or respect for, the responsibilities of a party [SIRC] benefiting from the opportunity to appear ex parte.”

There is little no reason to believe that the issues raised by the court or the revelations regarding surveillance on journalists – an act that undermines the freedom of the press and its ability to hold government to account – are isolated incidents. In fact, this is not the first time the federal court has felt misled about the activities of Canadian intelligence agencies. Justice Richard Mosley, a federal court judge, issued a stinging rebuke to Canada’s intelligence agencies and the Justice Department in 2013, ruling that they misled the court when they applied for warrants to permit the interception of electronic communications. While the government steadfastly defended its surveillance activities by maintaining that it operated within the law, Justice Mosley, a former official with the Justice Department who was involved with the creation of the Anti-Terrorism Act, found a particularly troubling example where this was not the case.

This week’s metadata case involves CSIS, but this year’s report from the Communications Security Establishment (CSE) commissioner uses legal language seemingly designed to obscure an otherwise clear admission that there are ongoing metadata violations within the CSE. The report notes that metadata activities were “generally conducted in compliance with operational policy” and that the “CSE has halted some metadata analysis activities” that were the subject of previous criticisms. The use of words like “generally” and “some” are no accident. The CSE Commissioner could have just as easily written that the CSE still does not conduct its metadata activities in full compliance with the law and that it has refused to stop some activities that were the subject of complaints. Yet the soft framing turns what should be a major story and source of concern into something largely ignored by the general public.

Moreover, Snowden has made it clear that Canadian securities agencies have been enthusiastic participants in numerous surveillance initiatives. Canadians played a lead role in projects focused on tracking travellers using airport Wi-Fi networks, monitoring millions of daily uploads and downloads to online storage sites, aggregating millions of emails sent by Canadians to government officials, and targeting mobile phones and app stores to implant spyware.

Meanwhile, all Canadian telecommunications companies still do not release transparency reports (Bell being the notable outlier), securities agencies won’t disclose their own breaches, and the federal government is consulting on the expansion of interception capabilities within Canadian networks and the revival of lawful access rules.

There are no silver linings here. Public Safety Minister Ralph Goodale responded to the court ruling by stating:

“In matters of security and intelligence, Canadians need to have confidence that all the departments and agencies of the government of Canada are being effective at keeping Canadians safe, and equally, that they are safeguarding our rights and freedoms.”

In light of what we now know, Canadians simply cannot be confident that security intelligence agencies are safeguarding and respecting our rights and freedoms. This government was elected on a mandate of real change. It must now put those words into action by overhauling legal oversight and enacting real change to Canadian surveillance programs and their agencies.

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The CRTC’s Differential Pricing Hearing: ISPs Should Not Be Picking the Internet’s Winners and Losers

Michael Geist Law RSS Feed - Wed, 2016/11/02 - 13:04

Net neutrality, the longstanding principle that Internet service providers should treat all content and applications in an equal manner faces its toughest test yet this week as the Canadian Radio-television and Telecommunications Commission (CRTC), Canada’s broadcast and telecommunications regulator, conducts a hearing on whether ISPs may engage in “differential pricing”.

My Globe and Mail column notes that differential pricing refers to instances in which ISPs adopt a non-neutral approach to content by charging one price for consumers to download or access some content, but a different price for other content. The issue – sometimes known as “zero rating” for cases in which ISPs do not levy any data charges for certain content – may sound technical, but it has huge implications for how Canadians access and pay for Internet services.

Much like prior policy battles over net neutrality, the concern over differential pricing involves fears that ISPs will use their gatekeeper position to favour some content over the others. In fact, given the vertical integration that brings together carriage and content at many of Canada’s largest providers, the temptation to privilege their own content may be too much to resist.

How can the CRTC craft a policy that maintains the principles of net neutrality but avoids heavy-handed regulation?  In searching for a policy that encourages ISP innovation that does not rely on leveraging the potential gatekeeper function, the commission should consider a default rule prohibiting differential pricing subject to two exceptions. Read the full column that examines the solutions that are non-starters and the details on a differential pricing policy.

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CETA Implementation Bill Provides Reminder of the IP Cost in the Canada – EU Trade Deal

Michael Geist Law RSS Feed - Tue, 2016/11/01 - 09:10

The Canadian government moved quickly from signing the trade agreement between Canada and the European Union on Sunday to tabling Bill C-30, the CETA implementing legislation, on Monday. While most of the attention has focused on the political issues surrounding CETA in Europe and the potential gains for Canadian exporters due to tariff reductions, the implementing bill provides a reminder that there are significant costs associated with CETA that have generated far less discussion. In fact, the majority of the 140-page bill features changes to Canada’s intellectual property rules, requiring changes that largely serve European interests.

Mandated reforms to patent protections (in the form of term restoration provisions) and the expansion of protections for dozens of European geographical indications was always part of the price to be paid for CETA. There were concerns expressed throughout the negotiations on both issues.  Geographic indications rules grant protections to foods widely produced around the world and establish new marketing and naming restrictions on Canadian food producers.  Meanwhile, the patent term restoration provisions are likely to increase health care costs in Canada by delaying the availability of generic pharmaceuticals due to the extension in the term of protection for patented pharmaceuticals.

Bill C-30 includes detailed provisions amending the Patent Act to create a “supplementary patent protections” system that extends the term of protection. It also contains changes to the Trade-Marks Act to protect the long list of European geographical indications.

The bill is expected to sail through the House of Commons – there are reports it could pass before year-end – but those who take the time to review the implementing legislation will find that the deal being touted as a “progressive trade agreement for a strong middle class” includes extensive changes to intellectual property law that will lead to higher pharmaceutical costs for all Canadians and create new restrictions for the Canadian agricultural community.

 

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No Minister Joly, The Internet Is Much More Than Just Movies, TV and Music

Michael Geist Law RSS Feed - Mon, 2016/10/31 - 10:21

Canadian Heritage Minister Melanie Joly hosted a public meeting in Montreal last week as part of her consultation on Canadian content in the digital world. The media reports from the event included a focus on comments from musician Patrick Watson, who is quoted as saying that no one would be on the Internet if there were no movies, television or music. Reports indicate that the comment generated support in the room and from Joly.  In fact, hours later, Joly tweeted out “thoughtful words from @patrickwatson ‘without culture, nobody would be on the Internet’”.

If that really represents Minister Joly’s worldview on the Internet, there should be little doubt that an Internet tax will play a key role in her future plans. Claims that no one would be on the Internet without culture is demonstrably false, but it is consistent with the argument that Internet service providers and Internet companies owe their revenues to the cultural content accessed by subscribers and they should therefore be required to contribute to the system much like broadcasters and broadcast distributors.

The reality is that Internet use is about far more than streaming videos or listening to music. Those are obviously popular activities, but numerous studies (CIRA, Statistics Canada) point to the fact that they are not nearly as popular as communicating through messaging and social networks, electronic commerce, Internet banking, or searching for news, weather, and other information. From the integral role of the Internet in our education system to the reliance on the Internet for health information (and increasingly tele-medicine) to the massive use of the Internet for business-to-business communications, the Internet is about far more than cultural consumption. Indeed, given its importance to virtually all aspects of modern day life, there are few policy goals more essential than ensuring that all Canadians have affordable access to the network. Far from representing an updated approach to cultural funding, an Internet tax would unfairly target millions of Canadians, make access less affordable, and do little to “modernize” cultural funding policy.

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Why Trudeau’s TPP Comments Undermine Freeland’s Credibility on Canada’s Biggest Trade Deal

Michael Geist Law RSS Feed - Wed, 2016/10/26 - 12:50

International Trade Minister Chrystia Freeland has faced a challenging week given the possible collapse of the trade agreement between Canada and the European Union. Freeland and the Liberal government have worked hard to get CETA to the finish line with some changes to the investor – state dispute settlement rules (the rules should be dropped altogether) and frequent travel across Europe to garner support for the deal.

Back at home, the reaction to the CETA problems from the Conservative opposition has been embarrassing. Trade critic Gerry Ritz criticized Freeland, speaking of the need for adult supervision and calling on the government to get the job done. Freeland rightly called him out on the comments, but she could have also noted that the record suggests that it is the Conservatives that failed to get the job done on CETA. In April 2010, the Conservative government said it would be finished in 2011. In 2011, reports said it would be done in 2012. In October 2012, the projection was a deal by year-end. It took until the fall of 2013 for a ceremony marking an “agreement-in-principle”. That too proved to be premature as there was another event celebrating an official draft in 2014 followed by more legal drafting and the renegotiation of controversial ISDS provisions that led to the release of another text earlier this year. In other words, Freeland inherited far less than advertised on CETA and the Conservatives might not want to remind the public that their biggest trade accomplishment never actually involved a signed, final text.

The Ritz remarks have attracted attention, but comments yesterday from Prime Minister Justin Trudeau may have a longer and more damaging impact on Freeland. Speaking at a youth labour summit, Trudeau gave the clearest indication yet that the Liberals plan to move ahead with the TPP assuming the agreement goes ahead (the TPP is facing enormous opposition in the U.S. and cannot take effect without its approval). Asked about the TPP, he stated that “It’s difficult to imagine a world where Canada would turn its back on three of its top five trading partners. We established very clearly during the campaign that we’re a pro-trade party.”

That is a far cry from the Liberal position on the TPP both during the election and since forming government. Freeland has consistently stated the final decision on the TPP would not come before the completion of extensive public consultations. Those consultations are still ongoing with the deadline for submitting comments to the Standing Committee on International Trade open until October 31st. The committee report is therefore still weeks away and the necessary debate in the House of Commons has yet to occur. While Trudeau did not definitively state that Canada will ratify, the comments call into question the seriousness of the consultation and lend credence to concerns that the process is little more than theatre.

Further, not only do the comments hurt Freeland’s credibility on an open consultation, but they also undermine Canada’s bargaining position with respect to potential changes to the TPP. While officials have stated that the deal cannot be amended, the same was said about CETA and changes were ultimately incorporated into the final text. With opposition running high in the U.S., the prospect of re-opening some TPP issues or crafting side letters that involve some change is a real possibility. The Canadian position is weakened by Trudeau’s comments, however, since TPP partners will now assume that any threat to walk away is mere posturing and that no further concessions are needed.

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The Devil is in the Details: Why CETA is on the Verge of Collapse

Michael Geist Law RSS Feed - Tue, 2016/10/25 - 10:52

The seeming collapse of the trade agreement between Canada and the European Union (CETA) has created obvious disappointment for International Trade Minister Chrystia Freeland and the entire Canadian government, which made the deal as its top trade issue. Efforts to salvage CETA will undoubtedly continue, but my Globe and Mail column points out that the underlying problem with the agreement is not the complicated European political system that requires support from all member states.

Rather, it is the expansion of trade negotiations from agreements that once focused primarily on tariff reductions to far broader regulatory documents that now mandate domestic legal reforms and establish dispute resolution systems that can be result in huge liability for national governments. This enlarged approach to trade deals, which can also be found in the controversial Trans Pacific Partnership (TPP), run the risk of surrendering domestic policy choices to other countries or dispute tribunals.

If CETA were limited to tariff reductions, it would be relatively uncontroversial. The discomfort with the agreement lies instead in the mandated changes to domestic regulations and the creation of investor – state dispute settlement mechanisms that may prioritize corporate concerns over local rules.

Regulatory provisions in CETA mean that both parties face the prospect of changing national laws to accommodate foreign businesses. For example, CETA requires Canada to expand patent protections, largely due to demands from European pharmaceutical companies. The required changes would add billions to Canadian health care costs by extending the term of protection for popular drugs. Similarly, European countries would face the prospect of altering food and safety regulations as part of their end of the bargain.

The insistence on including investor – state dispute resolution provisions are particularly puzzling. These rules, which allow companies to seek damages where local regulations interfere with their economic expectations, are commonly found in foreign investment treaties with developing countries whose court systems are unknown or viewed as risky by potential investors.

There are no such risks in Canada and Europe, however, since both offer reliable, respected court systems that are widely used by companies from around the world.

The full column is posted here.

The post The Devil is in the Details: Why CETA is on the Verge of Collapse appeared first on Michael Geist.

Delhi High Court issues historic decision for access to knowledge and education

Sara Bannerman - Mon, 2016/10/24 - 13:35
In September, the Delhi High Court handed down a groundbreaking judgement dismissing Cambridge University Press, Oxford University Press, and other academic publishers’ copyright infringement suit against the Rameshwari Photocopy Service and the University of Delhi.  Read my full post about it here on the Cambridge University Press blog.


TPP consultation — my submission

Fair Duty by Meera Nair - Sun, 2016/10/23 - 22:31

Earlier this year, Canadians were invited to participate in a public consultation regarding the Trans-Pacific Partnership Agreement (TPP).  The deadline for submission is 23:59 EDT, October 31, 2016.

My submission is slightly over 4000 words in length; too much for a blog post.  Below are the closing paragraphs; the entire document is available here.

Update: A thoughtful reader alerted me to a 404 response when trying to access my submission.  If the direct link does not work, try the attachment page.

… The principle argument to join the TPP seems to be that Canada cannot afford to be left out. Even if the agreement was only a matter of tariff and subsidy reductions, that argument is weak.[1] Given the nature of the entirety of the TPP, the costs of which will be felt through heightened expenditure for medicines, diminishment of Canadian culture, elimination of future innovation, absence of attention to public well-being for fear of international reprisals, and the loss of sovereignty when such reprisals are unavoidable, one has to ask: whom is this government wishing to please by committing Canada to the TPP?  The answer does not appear to be: Canadians. One must also ask: has our existing business community been sufficiently engaged to warrant our confidence that fulfilling their wishes will lead to better living for all?

That does not appear to be the case. In 2012, Mark Carney, former governor of the Bank of Canada, indicated that instead of investing in the economy, Canadian businesses “were holding on to nearly half a trillion dollars in cash, an increase of 43 per cent since the end of the recession in 2009.”[2] Recently, the esteemed firm Deloitte, an internationally revered organization, released a damning report concerning the willingness of Canadian businesses to take the necessary steps to reinvigorate the economy. In Deloitte’s words, too many “lack an essential game-changing quality: courage.”[3]

By virtue of the TPP, the individuals that Canada most desperately needs to encourage – the innovative entrepreneur looking to develop new industries to drive the economy when our wood and water have been exhausted – will find that no amount of courage can overcome the hurdles put in place by their own government. As the actual trade measures of the TPP bring very modest gains to Canada, and the remaining components will inflict costs far in excess of those gains, adopting this agreement makes little sense beyond acquiescing to the corporate bullying that is likely happening behind closed doors. If that is the sole reason that Canada must go forward with the TPP, please be honest to Canadians about the government’s reasoning. Please do not pretend that this is solely about Trade.

The TPP is an international omnibus bill, the effects of which will be detrimental to Canadians. The greatest pain will be inflicted upon those youthful voters whom this government so assiduously courted.

Regards,

Meera Nair

 

 

[1] The C.D. Howe analysis estimates the loss to Canada for not joining the TPP; “The real GDP impact would be a negligible -0.006 percent in the first year, rising to about -0.026 percent in 2035.” The losses to existing industries are not taken lightly, but it is essential to wonder what industries could rise in their place, if unrestricted by the constraints embodied within the TPP.

[2] Michael Enright, “Canada’s cowardly CEOs are sitting on billions, rather than investing in the economy,” The Sunday Edition, 16 October 2016 <http://www.cbc.ca/radio/thesundayedition/timid-ceos-endless-war-in-syria-steve-earle-fall-in-vermont-1.3801572/canada-s-cowardly-ceos-are-sitting-on-billions-rather-than-investing-in-the-economy-michael-s-essay-1.3801574&gt;.

[3] Deloitte, The future belongs to the bold, <http://www2.deloitte.com/ca/en/pages/insights-and-issues/articles/the-future-belongs-to-the-bold.html&gt;.  As an aside, poetry lovers will enjoy the inference of Invictus by the report’s authors.

 


CETA Talks Break Down: “It is Evident that the EU Is Incapable of Reaching an Agreement”

Michael Geist Law RSS Feed - Fri, 2016/10/21 - 11:49

International Trade Minister Chrystia Freeland has walked out of talks aimed at addressing Belgian opposition to the Canada-EU Trade Agreement, stating:

I have personally worked very hard, but it is now evident to me, evident to Canada, that the European Union is incapable of reaching an agreement – even with a country with European values such as Canada, even with a country as nice and as patient as Canada. Canada is disappointed and I personally am disappointed, but I think it’s impossible. We are returning home.

Leaving aside the odd reference to how nice Canada is, this is remarkable language that lays bare the obvious frustration and disappointment for the government which prioritized the CETA agreement above all others. The prospect of the deal falling apart has been evident for months. I wrote in July that the agreement was in more trouble than the Canadian government would admit, noting that opposition from any national or regional government could kill CETA altogether. Canadian officials downplayed the risk, but it was obvious that CETA faced stiff opposition that would not be easy to overcome.

Yet to focus exclusively on the political dimensions (which should also include how disingenuous the Conservatives’ claims about their trade deals were) is to miss the broader concerns with trade agreements such as CETA. The Stop CETA protests across Europe tend to focus on broader opposition to trade agreements that extend far beyond reduced tariffs. Indeed, few oppose reduced tariffs. The concerns instead typically point to the wide range of regulatory measures and dispute settlement mechanisms that may prioritize corporate concerns over local rules. The fear of these aspects of the agreement are what lies at the heart of opposition to CETA, as well as to the Trans Pacific Partnership (TPP) and TTIP.

The insistence that such provisions remain in the agreement is what is truly puzzling. Given that Europe and Canada both offer reliable, respected court systems, there is little reason to insist on ISDS rules at all. Further, expanded trade should not require Canada to face increased health care costs (as would result from CETA’s extension of patent protections) or Europe to confront changes to various food and safety regulations.

The CETA setback in Europe has strong echoes to the 2012 defeat of the Anti-Counterfeiting Trade Agreement. Trade negotiators and governments similarly downplayed mounting protests and concerns associated with ACTA, but the European Parliament ultimately rejected the agreement in a landslide. Killing ACTA – much like the potential death knell for CETA – isn’t about Europe’s ability to conclude deals or how nice Canada is. It is about the expansive approach to traditional trade agreements that it is increasingly out-of-step with local regulation, the balance between government and corporate rights, and public opinion.

The post CETA Talks Break Down: “It is Evident that the EU Is Incapable of Reaching an Agreement” appeared first on Michael Geist.

Beyond a Netflix Tax: Why Melanie Joly’s Comments Point to Regulation of Internet Services

Michael Geist Law RSS Feed - Fri, 2016/10/21 - 09:59

The prospect of new digital taxes and regulation to fund the creation of Canadian content continues to attract attention with cultural groups leading the charge. For example, the Canadian Independent Music Association recently called for the regulation of digital services and ISPs including mandated contributions to support the development of Canadian content, while ADISQ has previously lobbied for a similar policy approach.

With mounting coverage of the issue, Canadian Heritage Minister Melanie Joly appeared last weekend on CTV’s Question Period, spending most of the nine minutes dodging questions from host Evan Solomon. Joly started by clearly stating that “there will be no new Netflix tax”, but spent the rest of the interview making the case for one. The discussion featured speaking points that seemed to contradict the no Netflix tax approach, emphasizing that everything is on the policy table and that the government is looking at all scenarios. Solomon noted the inconsistency of the comments and Joly struggled to respond.

Most troubling was the exchange on new regulations, taxes or fees for Internet companies and services. Solomon specifically asked whether the only digital tax that Joly was willing rule out was a Netflix tax. Joly’s response:

I’ve said that we’re willing to have a conversation with digital platforms. Netflix is one of them. There are Amazons, Hulus, Apple. There are big companies that are part of our ecosystem, that are used and liked by Canadians. This is why we want to make sure that we know that they are using a large part of our spectrum that we can have a conversation with them to see how they can participate.

While it is somewhat difficult to fully decipher Joly’s comments, the references point in the direction of a tax or regulation on Internet services and service providers.

First, the comment suggests that Joly subscribes to the view that there is a parallel between conventional broadcast and the Internet that invites a similar regulatory approach. Part of the rationale for broadcast regulation is that broadcast spectrum is scarce, therefore requiring licensing and regulation. By indicating that Internet services use a “large part of our spectrum”, Joly is making the case for treating Internet services as equivalent to broadcast. I believe that Joly is wrong: the Internet is not the same as broadcast and access to these services frequently involves private networks, not publicly-licensed spectrum. However, by arguing that they are using Canadian spectrum, Joly is laying the groundwork for a regulatory model for Internet services.

Second, Joly speaks of the need to have a conversation with Internet services “to see how they can participate.” Services such as Hulu and Amazon’s streaming service are not even available to Canadians, but even with those services that are (such as Netflix), the notion of exploring how they can participate again assumes a regulatory approach in which offering a service to Canadians from anywhere in the world leads to regulated participation in the Canadian system. Companies such as Netflix and Google rejected this approach during the 2014 CRTC hearing, effectively arguing that they are not subject to Canadian broadcast regulation. Joly can move to change that law, but doing so will invite a new era of Internet regulation.

Joly tried to emphasize that these issues are up for consultation, but the references to digital platforms, using Canadian spectrum, and participation in the Canadian system all point to future demands for regulations, payments, levies or taxes. The consultation is open until November 25th, with preliminary findings and recommendations expected within weeks after the consultation closes.

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