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Keynote Speaking – 2017-18

Michael Geist Law RSS Feed - Tue, 2017/12/05 - 04:46

I regularly speak at a wide range of conferences and events on issues related to technology, the Internet, law and policy. Recent keynote addresses have focused on privacy, social media, copyright, education, security, and the free speech on the Internet. All talks are customized to the audience with materials and video that can be distributed to attendees or posted online.

The video section of this site features links to many talks posted online. To discuss an event and potential speaking opportunities, contact me directly.

Current topics include:

1. Using Law Responsibly: What Happens When Law Meets Technology?

The law has long struggled to keep pace with the rapid change that comes with the Internet and new technologies. From the cross-border challenges posed by a global network to the privacy implications of big data, law and policy simply cannot move at “Internet speed.” Yet despite the difficulties, politicians and policy makers increasingly find themselves at the heart of emerging policy issues, asked to address the balance between privacy and surveillance, the competing copyright interests of creators and users, and the market structure for network providers and disruptive competitors. This keynote talk will explore the emerging law and policy challenges, highlighting how all Internet users have the opportunity to help shape the digital policy landscape.

2. The Dynamic Environment for Digital Privacy in Canada

As the public becomes increasingly reliant upon digital networks for everything from basic communication to commerce to culture, the privacy implications of the network become increasingly challenging. Big data cross-border transfers, algorithmic transparency, surveillance fears, security breaches, and data mining attract daily headlines as we struggle to identify an appropriate balance between leveraging data for new and innovative activities with the privacy risks associated with use and misuse of our personal information. Can real privacy exist in today’s networked world? This keynote will examine the dynamic environment for digital privacy in Canada, highlighting emerging policy challenges, ever-changing technologies, and the effort to craft online tools and services that offer both privacy and security.

3. Digital Trade: The Future of Canadian Trade Deals from NAFTA to the TPP

The intellectual property and new digital trade chapters of NAFTA are emerging as among the most contentious aspects of its renegotiation.  For decades, consumers, advocates and technology companies have been stuck in a defensive posture, criticizing more restrictive trade provisions and efforts to impose domestic reforms through trade negotiations. In recent years, however, these groups have been increasingly effective at promoting a positive agenda, including obligations to promote copyright “balance” and protect user rights that underpin the Internet ecosystem. This keynote will assess the Canadian opportunities in a global digital environment, examining the IP and digital trade rules emerging from global trade agreements such as NAFTA and the TPP.

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Bell Leads on Radical Proposal for CRTC-Backed Mandatory Website Blocking System

Michael Geist Law RSS Feed - Mon, 2017/12/04 - 15:41

Canadaland reports today that Bell is leading a coalition that plans to file a proposal with the CRTC that would lead to the creation a mandatory website blocking system in Canada. The unprecedented proposal, which includes the creation of a new “Internet Piracy Review Agency”, envisions the creation of mandatory block lists without judicial review to be enforced by the CRTC. As a result, the companies (reportedly including Rogers and Cineplex) envision sweeping new Internet regulations with the CRTC ultimately charged with enforcing site blocking by every Internet provider in Canada. I reviewed the proposal in order to provide comments to the Canadaland.

Bell’s support for a website blocking system does not come as a surprise given that it raised the possibility at the House of Commons Standing Committee on International Trade in September and has increasingly sided with the content industry. The inclusion of Rogers on the list of supporters is consistent with recent comments at an industry conference in Ottawa despite the company earlier distancing itself in September from the Bell proposal.

As the Canadaland report notes, the Bell proposal maintains that site blocking can be established in Canada without the need for further copyright reform (notable since the government is set to launch a review of the Copyright Act in the coming weeks) by instead relying on the Telecommunications Act, which is itself slated for a review. Canada already has some of the toughest anti-piracy laws in the world with unique “enabler” provision that makes it easy for rights holder to target Canadian-based sites that are perceived to facilitate piracy. Moreover, industry data suggests that Canada has lower rates of piracy than many other countries. For example, Music Canada recently reported that Canada is well below global averages in downloading music from unauthorized sites or stream ripping from sites such as YouTube.

Yet the telecom and cable giants maintain that a new system designed to block foreign-based sites is still needed. This despite the fact that there is now the possibility of Equustek global takedown orders from the Canadian Supreme Court, which provides an obvious alternative that does not involve blocking. Perhaps most notable about the proposal is that there is no court oversight in the creation of the mandatory block list. The plan is to create a new not-for-profit organization (IRPA) similar in structure to the CCTS, which would be responsible for identifying sites to block. The organization’s board would include representatives of rights holders, broadcasters, ISPs, and consumer groups. There is no reference to independent voices or free speech or civil liberties groups. The IRPA would establish the list of sites to block to be submitted to the CRTC. The CRTC would then order all ISPs to block access to the sites under sections 24 and 24.1 of the Telecommunications Act.

The proposal claims that the blocking would only cover sites that “blatantly, overwhelmingly or structurally” engage in infringing or enabling or facilitating the infringing of copyright. Yet recent history suggests that the list will quickly grow to cover tougher judgment calls. For example, Bell has targeted TVAddons, a site that contains considerable non-infringing content. It can be expected that many other sites disliked by rights holders or broadcasters would find their way onto the block list.

Moreover, the creation of a blocking system will invariably lead to demands that it expand to other areas. Whether fake news, hate speech or unlicensed content, if blocking websites without even court oversight is viewed as fair game, the CRTC will face a steady stream of demands for more. For example, consider Bell’s potential response to the availability of streaming content from U.S. services without a Canadian licence or the reaction to the removal of simultaneous substitution and its argument that unlicensed content should be blocked. The TPP included a specific provision stopping Canada from restricting access to foreign audio-visual content precisely due to concerns that broadcasters and BDUs might want to lessen competition by blocking access to foreign services.

The good news is that legal basis for this radical proposal is on very shaky ground. The CRTC was clear in September 2016 letter arising out of the Quebec law mandating the blocking of access to unlicensed gambling sites. The CRTC stated that the law only permits blocking in “exceptional circumstances” noting that:

the Commission is of the preliminary view that the Act prohibits the blocking by Canadian carriers of access by end-users to specific websites on the Internet, whether or not this blocking is the result of an ITMP. Consequently, any such blocking is unlawful without prior Commission approval, which would only be given where it would further the telecommunications policy objectives. Accordingly, compliance with other legal or juridical requirements – whether municipal, provincial or foreign – does not in and of itself justify the blocking of specific websites by Canadian carriers, in the absence of Commission approval under the Act.

The proposal must therefore convince the CRTC that website blocking would further the telecommunications policy objectives (merely complying with copyright law or meeting broader cultural objectives would be insufficient). The proposal does a woefully poor job of making the case that mandatory website blocking would further those objectives. The best it can do is argue that piracy “threatens the social and economic fabric of Canada”, that the telecommunications system should “encourage compliance with Canadian laws” and that website blocking “will significantly contribute toward the protection of the privacy of Canadian Internet users.”

The case is very weak on all counts. The data on piracy is decidedly mixed. The carriers try to make the case that piracy is responsible for cord cutting, but the popularity of authorized services such as Netflix and the far better value associated with the services surely has much more to do with it. In fact, a recent report released by the Canada Media Fund noted the sharp decline in piracy, the fast growth of music industry, and the near-complete elimination of BitTorrent as a major source of network traffic (just under 2% of peak network traffic is BitTorrent compared to 35% for Netflix).   Moreover, many studies suggest that Canada has lower rates of piracy and that the overwhelming majority of Canadians do not use tools to access unauthorized streams (a Sandvine study found that only 7% have done so). The proposal also cites a Circum study conducted for Canadian Heritage on piracy, but that study found that the majority of rights holders were not focused on the issue.

The arguments around encouraging compliance with the law is even weaker as the Commission has already stated that compliance with other legal or juridical requirements does not justify site blocking. Most head-scratching is the claim that this will protect user privacy, particularly since it comes from a company (Bell) that is the only major provider without a transparency report and it refused to comply with the Privacy Commissioner of Canada’s ruling on its privacy-invasive ad-tracking program when it was first issued. It takes a special kind of hypocrisy to argue that the way to protect user privacy is simply to block access to many Internet sites.

What the proposal does not acknowledge is that there would be obvious Charter of Rights and Freedoms concerns with a proposal that avoids judicial oversight in creating a block list, is not used by the U.S. (which has the most at stake from a content perspective and which has specifically warned against blocking in the TPP), and that it is inconsistent with rules found elsewhere that at least incorporate judicial review. The government rightly seems dismissive of the proposal in the Canadaland report but as leading Internet providers, Bell and Rogers should be ashamed for leading the charge on such a dangerous, anti-speech and anti-consumer proposal.

The post Bell Leads on Radical Proposal for CRTC-Backed Mandatory Website Blocking System appeared first on Michael Geist.

Canada’s Missing Internet Provision: Why NAFTA Offers the Chance to Establish Long Overdue Online Speech Safeguards

Michael Geist Law RSS Feed - Fri, 2017/12/01 - 10:03

During the earliest days of the commercial Internet, the United States enacted the Communications Decency Act, legislation designed to address two concerns with the rapidly growing online world: the availability of obscene materials and the liability of Internet services hosting third party content. While the obscenity provisions in the 1996 law were quickly struck down as unconstitutional by the U.S. Supreme Court, the liability rules emerged as a cornerstone of U.S. Internet policy.

The rules, which many regard as the single most important legal protection for free speech on the Internet, establish a safe harbour that ensures online services are not liable for the content posted by their users. My Globe and Mail op-ed notes that over the past two decades, the CDA Section 203(c) provision has been used by every major Internet service – from Google to Amazon to Airbnb – to ensure that courts, not private companies, determine what is lawful and permitted to remain online.

By creating a legal safe harbour for non-copyright third party content (copyright law establishes an alternative system for addressing claims of infringement and the liability clearly applies to original content created by an online service), thousands of Internet sites and services have been able to err on the side of free speech without active monitoring of posts or takedowns based on unproven claims.

The rules can be controversial, particularly at a time when policy makers and the public are demanding greater vigilance from online providers in countering disinformation campaigns, cyber-bullying, and hate online. Yet there is room to strike a balance to ensure that illegal content is swiftly identified and taken down, while avoiding the risks that would come with active monitoring of content posted by billions of users by Internet giants.

Unlike the U.S., Canada does not have equivalent online legal protections for third party content. In practice, that has meant the same companies that require court orders prior to the removal of content for claims originating in the U.S., may take down lawful content in Canada based on mere unproven allegations due to fears of legal liability. Moreover, the absence of safe harbour protections has proven to be a significant disincentive for both new and established services to use Canada to store data or maintain a local presence.

The absence of Canadian safe harbour rules took on heightened importance this year with the Supreme Court of Canada’s Equustek ruling, in which it concluded that a Canadian court could issue a global takedown order requiring Google to remove results from its search index for users worldwide. A U.S. court recently issued an injunction blocking enforcement of the Canadian order, noting that it “threatens free speech on the global Internet” by effectively overriding U.S. safe harbour protections.

The inconsistency between U.S. and Canadian law in this area appears to have led the U.S. government to amend its list of negotiating objectives for the NAFTA digital trade chapter. Earlier this month, the U.S. released its updated list of objectives, quietly adding “establish rules that limit non-IPR [intellectual property rights] civil liability of online platforms for third party content, subject to NAFTA countries’ rights to adopt non-discriminatory measures for legitimate public policy objectives.”

The change may have been motivated by U.S. concerns of Canadian overreach in the online environment, but the benefits of a well-crafted provision would be significant for the Canadian digital economy. The U.S. proposal features ample room for Canada to craft rules that maintain the need for responsible stewardship of online providers without overbroad monitoring or unwarranted takedowns.

As Canada seeks to attract global players such as Amazon and foster the creation of the next generation of home-grown Internet success stories like Shopify, there is a need for a level legal liability playing field. Indeed, the absence of Canadian safe harbour rules is longstanding weakness in the efforts of Innovation, Science and Economic Development Minister Navdeep Bains to build an innovative online economy. The NAFTA digital trade chapter offers an ideal venue to simultaneously give the U.S. delegation a “win” and for Canada to pursue much-needed domestic digital reforms.

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NAFTA and the Digital Environment: My CIGI Global Forum Lecture

Michael Geist Law RSS Feed - Wed, 2017/11/29 - 15:33

Last week I delivered the CIGI Global Forum lecture in Ottawa on NAFTA and the Digital Environment. The lecture draws on some of my work for CIGI (NAFTA, Innovation) and makes the case that NAFTA negotiations are a problematic place for digital copyright reform, noting the lack of transparency, lost flexibility, and inability to strike a critical policy balance. Given that the issues are seemingly unavoidable in NAFTA, the lecture then highlights the preferred approach (relying on international treaty standards) and identifies many of the most important issues up for discussion including copyright term, fair dealing, intermediary liability and digital issues such as net neutrality and data localization. A video of the talk is embedded below.


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Why Abandoning Net Neutrality in the U.S. Matters in Canada

Michael Geist Law RSS Feed - Sat, 2017/11/25 - 13:12

Earlier this week I appeared on CBC’s On the Money to discuss the U.S. decision to abandon net neutrality and its implications for Canada. I’ve written about these issues in columns and posts, but this interview provided the opportunity to highlight the implications for Canadian business and consumers, the prospect of including net neutrality in future Telecommunications Act reforms, the connection to NAFTA, and the ongoing concerns with telecom competitiveness in Canada. The interview is embedded below.

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Net Neutrality Divide: Canada and the U.S. Go Separate Ways on an Open Internet

Michael Geist Law RSS Feed - Thu, 2017/11/23 - 15:09

This week’s announcement that the U.S. telecommunications regulator plans to roll back net-neutrality regulations sparked an immediate backlash from those who fear that the decision will turn the Internet into a cable-like service dominated by the carriers and deep-pocketed giants that can afford to pay new fees to keep their content on the fast lane.

My Globe and Mail op-ed notes that the U.S. order, which would also block states from carrying out their own versions of policies that stop telecom carriers from leveraging their gatekeeper status by treating similar content or applications differently, is set for a vote next month.

Abandoning net neutrality will have an impact in the United States since evidence suggests that, without net neutrality rules, carriers will pick winners by differentiating connectivity based on the willingness of Internet companies, sites and services to pay additional fees. The experience in countries without net neutrality rules bears this out. Some European countries feature pricing plans that look like cable packages with limited access to a select group of websites or Internet services. On the flip side, European data show that providers that rely on neutral services offer better prices and larger data allowances.

From a Canadian consumer perspective, the effect of the U.S. decision will be more indirect. What separates the Canadian net neutrality approach from the U.S. direction is that consumers and creators – not telecom companies or Internet service providers (ISPs) – are in control when it comes to Internet usage.

Unlike the United States, Canada has emerged as a world leader in supporting net neutrality with clear endorsements from both political leaders and the Canadian Radio-television and Telecommunications Commission. Navdeep Bains, the federal Minister of Innovation, Science and Economic Development, responded to the U.S. developments by affirming that “Canada will continue to stand for diversity and freedom of expression. Our government remains committed to the principles of net neutrality.”

Canadian Heritage Minister Mélanie Joly has similarly emerged as a notable proponent of net neutrality. Despite pressure from some cultural groups to abandon net neutrality by mandating preferential treatment of Canadian content, Ms. Joly has affirmed that the principle remains at the core of Canadian cultural policy, saying in September that “we will continue to champion the Internet as a progressive force and an open space without barriers. As a government, we stand by the principle of net neutrality.”

The Canadian commitment to net neutrality has been similarly endorsed at the regulatory level. The foundation of Canadian policy lies in several CRTC decisions that restrict practices such as managing Internet traffic to limit speeds for some applications or creating pricing plans that “zero rate” certain content that does not count as part of monthly data-consumption caps. Moreover, Canadian law features clear safeguards against unjust discrimination, undue preferences or controlling the content of communications.

While the change in U.S. administration has led to a dramatic shift in net neutrality policy, the same will not occur in Canada. New CRTC chair Ian Scott told an industry conference earlier this month that “as companies continue to innovate in their offerings to Canadians, the CRTC will continue to ensure that Canada’s Internet neutrality provisions are respected … the owners and operators of the country’s communications may not discriminate against content based on its origin or destination.”

Canadian consumers may be shielded from net neutrality abuses, but the effects of the U.S. decision may still be felt north of the border. Since Canadian Internet traffic often transits through the United States, there are concerns that Canadian data could get caught by non-neutral policies. Moreover, Canadian internet services hoping to attract U.S. customers may face demands for payments to have their content delivered on the fast track. Since the renegotiation of the North American free-trade agreement include a chapter on digital trade, Canadian negotiators should be pushing for the inclusion of a strong, enforceable net neutrality provision.

The United States has been a remarkably innovative country for Internet services with the vast majority of leading companies starting there before venturing abroad. It is striking how those companies – Google, Netflix, Twitter – remain ardent supporters of net neutrality, effectively acknowledging the debt they owe to rules that helped them to become household names around the world. Without U.S. net-neutrality safeguards, the range of choices that ultimately make their way onto the consumer and business landscape may be curtailed, a discouraging development that will affect everyone.

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Music Canada Data Confirms Huge Increase in Streaming Revenues and Sharp Decline of Music Listening from Pirated Sources

Michael Geist Law RSS Feed - Wed, 2017/11/22 - 10:40

Music Canada released a report on the so-called Value Gap last month which serves as the basis for its lobbying campaign for copyright reform in Canada. The industry lobby group has used the value gap rhetoric primarily as an argument to undo safe harbours for Internet intermediaries. As I noted earlier this year, the argument is poor fit in Canada. First, Canada has experienced massive growth of Internet streaming revenues, with the Canadian music market outpacing global competitors by almost any metric and revenues going to both the industry and creators.

Yesterday I posted on SOCAN generating a 10X increase in Internet streaming revenues with growth rates of over 100 per cent over the past year for songwriters, composers, and music publishers. The industry numbers from Music Canada and IFPI tell a similar story. According to industry data, the Canadian music market is growing much faster than the world average (12.8 per cent in 2016 vs. 5.9 per cent globally), streaming revenues more than doubled last year to US$127.9 million (up from US$49.82 million) growing far faster than the world average of 60.4 per cent, the Canadian digital share of revenues of 63 per cent is far above the global average of 50 per cent, and Canada has leaped past Australia to become the 6th largest music market in the world. In fact, as the chart below indicates, the growth of streaming revenues in Canada since the 2012 copyright reforms has increased significantly year-after-year with growth rates for the industry and collectives mirroring each other.

Canadian Music Streaming Revenues, Source: IFPI Global Music Report 2017, p. 80, referenced at p. 19, https://musiccanada.com//wp-content/uploads/2017/10/The-Value-Gap-Its-Origins-Impacts-and-a-Made-in-Canada-Approach.pdf


Second, the U.S. DMCA notice-and-takedown system, which the industry claims is to blame lower royalty rates on YouTube, does not exist in Canadian law. Music Canada wants government intervention into what amounts to a negotiated agreement by increasing potential liability for intermediaries in the hope of extracting better terms and higher royalty rates. However, focusing on Canadian copyright law to do so makes little sense since there is no notice-and-takedown system to amend.

The Value Gap report may fail to make the case for Canadian legislative reform, but it does point to the sharp decline of Canadians who rely on pirated music. The report cites data from an IFPI international report on the listening habits of music consumers around the world. That report provided few details on the situation in Canada, but Music Canada discloses previously unreleased information specifically on Canadian consumers. It reports that Canadians spend 15.4 hours per week listening to music with listening to pirated music only accounting for 6 per cent of that time. A range of authorized and compensated sources, including radio, downloads, and streaming represents the vast majority of music listening habits. In other words, the industry’s data confirms that Canadian consumers show little interest in listening pirated music, preferring many other sources that contribute to its fast growing revenues.

Music Canada, The Value Gap and Its Origins, Impacts, and a Made in Canada Approach, Page 22, https://musiccanada.com//wp-content/uploads/2017/10/The-Value-Gap-Its-Origins-Impacts-and-a-Made-in-Canada-Approach.pdf


Moreover, the same report found that Canada is well below global averages in downloading music from unauthorized sites or stream ripping from sites such as YouTube. Indeed, after years of implausibly claiming that Canadians were among the most active infringers, Music Canada now points to survey data that places Canada far below the global average. Canada is also notably far below the global average when it comes to smartphone use for music (only Japan ranks below Canada), which is likely a function of the high cost of data in Canada.

The so-called value gap will undoubtedly form a big part of the lobbying effort on copyright reform in Canada for the music industry (other sectors, including the publishing industry, have also recently adopted it notwithstanding the significant growth in education licensing spending since 2012). Yet politicians should not be so easily fooled: the industry’s own data points to a major digital success story coming on the heels of the 2012 copyright reforms with a surge in revenues and rapidly declining relevance of pirated music.

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SOCAN Financial Data Highlights How Internet Music Streaming is Paying Off for Creators

Michael Geist Law RSS Feed - Tue, 2017/11/21 - 10:10

Music industry lobby groups may frequently seek to equate the Internet with lost revenues, but an examination of financial data from one of Canada’s largest music copyright collectives demonstrates massive growth in earnings arising from Internet streaming including major services such as Youtube and Apple Music. While many collectives do not publicly disclose their revenues, SOCAN, which represents composers, songwriters, and music publishers, provides a detailed breakdown of revenues and distributions in its annual report.

The reports show that since the 2012 copyright reform in Canada, SOCAN has experienced incredible growth in Internet streaming revenues. The 2013 SOCAN annual report noted that it was the first year that the collective distributed Internet streaming revenues ($3.4 million in revenue), which coincided with a performing rights licence for Youtube and an agreement that made it easier to members to receive additional money for music posted to the video site. Tracking the growth of revenues through the annual reports for 2014 ($12.4 million), 2015 ($15.5 million) and 2016 ($33.8 million), Internet streaming revenue is now SOCAN’s fastest growing revenue source having overtaken cinema, private copying, and satellite radio revenues and likely to surpass concert revenues in the coming year.


SOCAN Internet Streaming Revenues Source: SOCAN Annual Reports 2013, 2014, 2015, 2016


SOCAN is just one music copyright collective and there are others that seek royalties for other participants in the music creation process. Indeed, the debate over Internet music streaming revenues is complex with many rights holders vying for revenues in a fast-growing segment of the market. Yet despite attempts to paint the Internet as a source of disappearing revenues for creators, the publicly-availability data tells a different story.

In the case of songwriters, composers, and music publishers, the data unmistakable: in the aftermath of the 2012 copyright reforms, SOCAN has generated a 10X increase in Internet streaming revenues with growth rates of over 100 per cent over the past year alone. That isn’t a value gap. It is enormous economic value being generated for the benefit of creators and those that invest in them under current Canadian copyright rules.

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Closed by Default: Why is Prime Minister Trudeau Using Restrictive Terms for Flickr Image Use?

Michael Geist Law RSS Feed - Fri, 2017/11/17 - 10:29

Yesterday’s post on the Canada, the TPP and intellectual property raised a concern unrelated to the content of the piece. Since updating my site several years ago, I use a Creative Commons licensed or public domain image for virtually every post, celebrating the remarkable creativity of people and organizations from around the world who make their work freely available for anyone to use. In searching for an updated image on the TPP, I encountered a problem that has arisen with increased frequency. Several governments posted relevant images from the meetings in Vietnam and the Philippines, but the Canadian images featured restrictive terms and conditions in the form of an all rights reserved approach.

For example, there are two pictures from the same meeting downloaded from Flickr accompanying this post. The one on the left is from the President of Mexico’s Flickr page and is subject to a Creative Commons licence that permits non-commercial re-use. The picture on the right, taken from Justin Trudeau’s Flickr page, is all rights reserved. While I believe that I can rely on fair dealing and the Copyright Act’s non-commercial user generated content provision to use the picture, the restrictive licensing approach, which has become pervasive within the federal government on Flickr, is out-of-step with the standard of governments around the world and inconsistent with the “open by default” commitment.

The Prime Minister’s web page explicitly states that the works on Flickr are subject to crown copyright with all rights reserved:

Images and videos available through the Prime Minister’s Twitter, Flickr, YouTube and the Prime Minister’s Volunteer Awards Facebook accounts are subject to a Canadian Crown Copyright with all rights reserved, unless otherwise specified. We use Creative Commons Licenses to enable the sharing and use of images and videos in accordance with the terms set out in the specified Creative Commons license.

The problem is that the images on Flickr do not use Creative Commons licences but rather state that they are all rights reserved.

An open licensing approach that permits at least non-commercial use is commonly used by leaders, parliaments, and government departments around the world, with most relying on either a Creative Commons licence or immediately placing the work in the public domain. Examples include the UK Prime Minister, the Prime Minister of India, the Presidents of France, Mexico, and the United States, the European Parliament, the Government of South Korea, Government of Guatemala, the National Assembly for Wales, and Australia’s Department of Foreign Affairs to name just a few. Many of these governments provide public domain licences that allow for use of any kind. In Canada, many provincial government also use more flexible licensing options including the Premier of Alberta, Province of British Columbia, Province of PEI, and Province of Newfoundland and Labrador.

The all rights reserved approach means that foreign and provincial governments (along with international organizations) are now often the primary source for openly licensed pictures of Canadian ministers. Want a picture of Trudeau with UK Prime Minister Theresa May? There are many with open licences from May, but similar pictures on Flickr from Trudeau are all rights reserved. Want a picture of Trudeau at the recent ASEAN or APEC meetings in Vietnam and the Philippines? The White House has a public domain one, but Trudeau’s pictures are again all rights reserved.

The situation is similar for pictures of most cabinet ministers. Pictures of ISED Minister Navdeep Bains from his department’s Flickr page are all rights reserved, but the Province of B.C. has an a Creative Commons licensed one. Finance Minister Bill Morneau’s photos are all rights reserved, but there are Creative Commons licensed images from the IMF and OECD. Canadian Heritage uses all rights reserved for its Flickr pictures (which are oddly focused on British royalty), but B.C. again offers a Creative Commons licensed one for Minister Melanie Joly. Global Affairs no longer seems to post political-related photos, but Foreign Affairs Chrystia Freeland has dozens of photos from other governments, leaders, ministers, and international organizations.

In fact, some Creative Commons licensed images posted to Flickr under the previous Conservative government have been removed altogether. I relied on a Creative Commons licensed images of former Prime Minister Harper from his own Flickr page in a 2015 post but it has since been made private. The same is true for an image of former International Trade Minister Ed Fast in a 2015 post on the TPP.

There are certainly alternatives to relying on Creative Commons licensed or public domain images for websites, educational materials or other uses. Many uses of a single image will qualify as fair dealing, provided they are used with one of the enumerated purposes under the law. Similarly, an original non-commercial work that incorporates other copyrighted works may qualify under the non-commercial user generated content exception. Further, these images may be posted elsewhere, perhaps with less restrictive terms.

Yet today Flickr is the largest online image platform for openly licensed images in the world with 381 million Creative Commons or public domain licensed images. With search functionality that makes it easy to work through millions of images, it is a remarkably useful tool for finding and using openly licensed works without the need for further copyright analysis or permissions. The government should be actively encouraging the use of its images, for which the public has paid through their tax dollars. Indeed, a government committed to open-by-default should not require people to engage in a copyright analysis to determine whether they can use an image of the Prime Minister or government officials. Absent the much-needed elimination of crown copyright, the government should immediately shift to Creative Commons or licences for its images on Flickr.


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Bursting the IP Trade Bubble: Canada’s Position on IP Rules Takes Shape With Suspended TPP Provisions

Michael Geist Law RSS Feed - Thu, 2017/11/16 - 14:29

In the months following the conclusion of the Trans Pacific Partnership, critics pointed to many specific problems in the text with respect to intellectual property, culture, privacy, and dispute resolution. TPP defenders consistently dismissed those concerns, yet last week’s successful Canadian demand to suspend many of the most problematic IP provisions (along with holding out for reforms to the cultural exemption) confirms that the government has recognized the validity of the criticisms. The government may yet cave to U.S. pressure in the NAFTA renegotiation, but it has established a clear position on culture and IP that better reflects the national interest.

For example, as part of my 50 day Trouble with the TPP series, I pointed to a surprising shift in Canadian trade policy with respect to culture. While Canada had long insisted that the cultural industries receive a full exemption, the Conservative government had agreed to important exceptions to that general rule in the TPP.  Buried in Annex II of non-conforming measures were two exceptions to the cultural exception that could be used to block efforts to create mandated Cancon contributions for foreign providers or regulatory restrictions on foreign audio-visual content. Leaving aside whether these would be “good” policy measures, I argued that they did not belong in a trade agreement. While some disagreed (I responded here), the government’s insistence that it will not agree to the CPTPP without addressing the cultural issue validates the concerns, suggesting that policy makers recognize what is obvious from the wording of the text, namely that the TPP would restrict Canadian cultural policy.

The same is true for the TPP copyright and patent provisions. TPP supporters have frequently sought to downplay the significance of copyright term extension, the loss of flexibility on technological protection measures, patent term extension, and fixing the minimum standard for biologics protections. In fact, those provisions extend far beyond international treaty requirements and restrict the ability for countries to tailor their intellectual property laws consistent with those global rules. While the U.S. has been a longstanding proponent of exporting its IP laws, other countries have had strong misgivings about the approach. The Conservatives were willing to cave on these issues during the TPP negotiations, but the Liberal decision to demand suspension of those provisions – which garnered agreement from other TPP countries – demonstrates the quiet opposition to more restrictive copyright and patent rules. Far from being out-of-step with our trading partners, Canadian policy preferences are actually widely shared with many other countries.

The big question is what comes next. On the TPP11 (or CPTPP), the remaining countries have agreed to give everyone an effective veto power with respect to new entrants. Therefore, rather than being used as an incentive to entice the U.S. back into the deal, it may be difficult for the U.S. to convince all remaining countries to unanimously support an end to the suspended provisions. Even if one holds out, the provisions remain suspended.

The TPP11 outcome also confirms – yet again – that there is simply no need for excessively restrictive IP rules in modern trade agreements. The TPP11, the Canada – South Korean trade agreement, and CETA all feature robust IP chapters but do not include provisions such as mandatory copyright term extension beyond international treaty requirements. The NAFTA negotiations, however, will represent a much more difficult challenge as the U.S. is likely to re-assert TPP-style demands in that agreement. Canada may have a tougher time fending off U.S. pressure given the myriad of contentious issues – some reports suggest that IP will be an area to deal if the U.S. compromises on other issues – but its TPP position highlights that politicians and policy makers recognize that extending the term of copyright or patents and limiting future IP and cultural policy flexibility is not in Canada’s national interest.

The post Bursting the IP Trade Bubble: Canada’s Position on IP Rules Takes Shape With Suspended TPP Provisions appeared first on Michael Geist.

Canada Revenue Agency Obtains Broad Court Order for Years of PayPal Data

Michael Geist Law RSS Feed - Tue, 2017/11/14 - 13:46

The Canada Revenue Agency has obtained a federal court order requiring PayPal to hand over years of transactional information from all business accounts in Canada. The scope of the order is incredibly broad, covering any business account holder who sent or received a payment over a nearly four year period from January 1, 2014 to November 10, 2017. The information to be disclosed includes:

  • The full name of every individual or corporation holding a business account that has a Canadian address;
  • The date of birth of each individual holding a business account;
  • The business name, if applicable;
  • The telephone number(s) of the corporation or individual holding the business account, if available;
  • The full address(es) of the corporation or individual holding the business account;
  • The email address of the corporation or individual holding the business account;
  • The Social Insurance Number and/or Business Number of the corporation or individual holding the Business Account, if available.
  • The total number and value of received transactions for each calendar year between January 1, 2014 and November 10, 2017.
  • The total number and value of sent transactions for each calendar year between January 1, 2014 and November 10, 2017.

PayPal has indicated that it must comply with the order within 45 days from November 10th (the date the order was issued). The order will presumably allow CRA to conduct audits of thousands of small businesses that use PayPal for transactions. The issue has arisen in other jurisdictions. For example, the UK has been working on legislation that would allow for the collection of “bulk” information from Internet companies.

The Canadian order indicates that CRA intends to use the information to “combat the underground economy” and that there is no obligation to demonstrate that there is an existing investigation or audit. In fact, there is not even the need to demonstrate that “a genuine and serious inquiry” exists.  The order also reveals that PayPal objected to the breadth of the order.  It states that the court:

“considered the concerns expressed by PayPal with respect to the proposed Unnamed Persons Requirement, namely that the authorization sought by the Minister would interfere with the privacy of PayPal’s clients and that the Unnamed Persons Requirement is overly broad and unreasonable given the absence of any threshold amount for each transaction targeted by the requirement;”

It rejected those arguments, observing that the expectation of privacy with respect to business records is very low.  It also concluded that PayPal had the relevant information and that it did not file evidence that the order was overbroad or reached a disproportionate number of persons.

Ensuring that tax laws are respected is obviously important, yet many of PayPal’s business account records are presumably not similar to those typically found in larger businesses. Indeed, the business account may be often be closer to individual, identifiable records that might carry a higher level of expectation of privacy. PayPal apparently fought against the order, but having lost, will now be required to hand over a massive trove of financial data dating back years to Canada’s tax authorities without a threshold or other limitations.

The post Canada Revenue Agency Obtains Broad Court Order for Years of PayPal Data appeared first on Michael Geist.

Canada’s Billion Dollar Wireless Cash Grab: CRTC Data Shows Overage Fees Now Exceed Roaming Revenues

Michael Geist Law RSS Feed - Tue, 2017/11/14 - 10:41

The CRTC’s release of the 2017 Communications Monitoring Report ushered in the usual conflicting reports on the state of communications services in Canada. I found the most compelling take to be Tefficient’s data charts that show Canadian wireless companies generating revenue per GB that is the highest in the developed economy world (literally off-the-chart) alongside mobile data usage growth rates that are among the slowest on record. The Canadian Wireless Telecommunications Association described the growth rate as “impressive”, but when just about everyone has faster growth rates, it is readily apparent that high wireless costs in Canada have a negative impact on usage.

Digging further into the data, the CRTC provides insight into an oft-overlooked source of revenue for the carriers: overage charges, which represent an ongoing source of frustration for many consumers. While many carriers have unlimited broadband plans, unlimited wireless plans are rare, leaving subscribers to carefully monitor their data usage. Based on the CRTC data, however, many find themselves exceeding their monthly cap fairly regularly as data overage charges constitute 6 per cent of total retail wireless revenues:

In 2016, of companies that reported data overage charges, approximately 6.0% of their total retail mobile revenues were reported to be directly from revenues collected from subscribers who exceeded allowable monthly data limits; the revenues excluded charges for flex-type plans, domestic and international roaming, and text messaging services.

Given that retail wireless revenues exceeded $23 billion, annual overage charges in Canada easily exceed a billion dollars per year. By comparison, wireless long distance revenues generated $547 million and roaming revenues hit $960 million. In other words, Canadian wireless carriers make more money from overage charges than from either long distance fees or roaming costs. In fact, with total data revenues at $11.9 billion, about 1 of every 10 dollars earned from data stems from overage charges. The revenues from overage charges are not limited to wireless services either. The report also notes that Canadian households paid $100 million in broadband Internet overage charges or roughly 1 per cent of residential Internet service provider revenues.

Not only are overage charges a significant source of revenue, but several carriers recently increased them by as much as 40 per cent. For example, this summer Rogers boosted its overage charge on wireless data by 40 per cent and Bell raised it by the same amount over a two year period. Given that a 2016 CRTC survey found that nearly half of consumers pay overage charges, the increases alone are likely to result in hundreds of millions in additional consumer costs.

With a combined total of nearly $1.5 billion in consumer overage charges from retail wireless and broadband services, the costs have a significant impact on affordability. Communications companies have introduced tools to monitor usage and the CRTC wireless code mandates express consent when consumers exceed $50 in data overage charges in a single billing cycle, yet the record suggests that more is needed.

The most obvious solution would be the availability of unlimited wireless data plans, which are commonly found elsewhere. Companies such as Bell and Rogers claim that unlimited plans are not feasible, but the reality is that with limited competition and more than a billion dollars per year in revenue from overage charges, there is little incentive for the companies to tinker with the current system. Absent a more competitive wireless marketplace, Canada seems destined to continue to have some of the slowest usage growth rates as consumers conserve their data use and grapple with plans that result in 1 of every 10 dollars being spent on data going to overage fees.

The post Canada’s Billion Dollar Wireless Cash Grab: CRTC Data Shows Overage Fees Now Exceed Roaming Revenues appeared first on Michael Geist.

No Deal is Better than a Bad Deal: Why Canada Won the TPP By Standing Up for Balanced IP, Culture, and the Auto Sector

Michael Geist Law RSS Feed - Mon, 2017/11/13 - 11:15

The end-game in trade negotiations always generates more than its fair share of drama and last week’s effort to re-work the Trans Pacific Partnership without the United States was no different. Canada was squarely in the spotlight with Prime Minister Justin Trudeau a no-show at a ministerial meeting that was attributed to a scheduling error, but had the hallmarks of gamesmanship designed to demonstrate a willingness to walk away from the deal.

I posted over the weekend on some of the key IP provisions that have been suspended and published an op-ed in the Globe and Mail that argues that the result was a major win for Canada as the government leveraged its position as the second largest economy left in the TPP to extract significant concessions on intellectual property, culture, and the auto sector. Indeed, despite pressure to cave on key demands from the Japanese and Australian governments, Canada stood its ground and is helping to craft a trade deal that better reflects a balanced approach on challenging policy issues.

In advance of meetings last week in Vietnam, Mr. Trudeau had signalled that Canada would not be rushed into a deal simply for the sake of an agreement. With pressure on multiple trade fronts and misgivings about the terms of a trade deal that was concluded by the Conservatives weeks before the 2015 federal election, a few tweaks might not be enough to salvage the flawed TPP. The decision to go-slow and seek further negotiations may draw the ire of a few governments anxious to conclude the TPP, but it made both strategic and policy sense.

From a strategic perspective, Canada was a late entrant to the TPP negotiations, arriving well after the basic framework had been established and several of the chapters concluded. In fact, the TPP only became a trade priority after the Harper government identified the risks of remaining on the outside of a deal that included the U.S. The decision to participate was primarily defensive with some studies projecting only marginal economic gains.

With the U.S. now out of the TPP, Canada’s primary strategic objective was gone. That left a deal that offered some benefits for increased trade with Japan, but little else given that Canada already has free trade agreements with several other TPP countries such as Mexico, Chile, and Peru.

Further, the TPP never fully reflected some of the Liberal government’s trade priorities, including adequately addressing labour regulation and indigenous rights. Addressing those issues to advance the goal of a “progressive” agreement would require far more than some modest drafting changes.

The contentious NAFTA renegotiation has upended Canada’s trade priorities since the U.S. remains our dominant trading partner. The overlap between NAFTA and the TPP represents a particularly thorny issue. For example, auto sector provisions have emerged as some of the most challenging of the NAFTA talks, threatening to dramatically change longstanding rule of origin regulations that have served as the basis for a critical North America-wide industry. To hamstring the Canadian NAFTA position on the automotive sector in order to reach a TPP agreement would have swapped short-term gain for long-term pain. As a result, Canada successfully argued that the issue should remain subject to further negotiation.

The trouble with the TPP11 extended beyond strategic shortcomings as the substantive provisions in several areas were widely viewed as coming at a significant domestic cost. This is particularly true for the intellectual property chapter, where the original agreement included patent provisions that would likely increase the cost of pharmaceuticals and copyright rules that would lock down content for decades through the extension of the term of copyright beyond the standard established at international law.

The IP chapter largely reflected U.S. demands and with its exit from the TPP, an overhaul that more closely aligns the agreement to international standards was needed. Canada succeeded on that front too with an agreement to suspend most of the controversial IP provisions including those involving copyright term, patent extension, biologics protection, Internet provider liability, and digital lock rules.

The TPP was also an outlier on cultural policy, departing from the longstanding Canadian approach by omitting a full cultural exception and creating unprecedented restrictions on policies to support the creation of Canadian content. The absence of robust cultural protections in the TPP had been a simmering issue for months. With the issue becoming increasingly sensitive in light of the recent release of a digital cultural policy, acquiescing to a trade agreement that raised alarm bells within the cultural community would have bad policy and bad politics, leaving Canada to successfully argue for further discussions on a cultural exemption.

Global Affairs Minister Chrystia Freeland and International Trade Minister François-Philippe Champagne inherited a trade policy that seemed to prioritize any deal over a good deal. Agreement on the TPP11 (now rebranded the Comprehensive and Progressive Agreement for Trans Pacific Partnership) remains a possibility, but standing firm on Canadian interests with a willingness to walk away rightly recognized that no deal is better than a bad one.

The post No Deal is Better than a Bad Deal: Why Canada Won the TPP By Standing Up for Balanced IP, Culture, and the Auto Sector appeared first on Michael Geist.

Rethinking IP in the TPP: Canadian Government Plays Key Role in Suspending Unbalanced Patent and Copyright Rules

Michael Geist Law RSS Feed - Sat, 2017/11/11 - 09:54

Years of disappointment in trade negotiations have left many Canadian intellectual property watchers hoping for the best, but expecting the worst when it comes to the IP provisions in trade deals. In earlier talks, Canadian negotiators would often advocate balanced positions during the negotiations, but ultimately cave to (primarily) U.S. pressures during the final round of talks. Given that history, this week’s outcome of the TPP11 is reason for celebration as the second largest economy in the TPP finally acted like it. The Liberal government demonstrated genuine leadership in demanding significant changes to the flawed TPP intellectual property chapter and refusing to back down under intense pressure from some of the negotiating parties. The result isn’t perfect, but the newly named Comprehensive and Progressive Agreement for the Trans Pacific Partnership (CPTPP), which still requires considerable negotiation, features a significantly improved IP chapter that suspends some of the most problematic provisions.

Weeks after the release of the TPP text in 2015, I wrote a lengthy series on the Trouble with the TPP.  Many of the most problematic provisions, including copyright term extension, digital lock rules, and intermediary liability have been suspended from the CPTPP at the insistence of the Canadian delegation. Their removal is a remarkable victory for those that argued against overbroad, restrictive copyright provisions in the TPP and maintained that there was no reason to include unbalanced copyright provisins in a modern trade agreement.

The full list of suspended IP provisions, with links to my original posts on the issues in the Trouble with the TPP series, include:

In addition to the IP provisions, the CPTPP includes suspension of some ISDS provisions, resolution of telecommunications disputes, and the need to address Canadian concerns on cultural protections (analyzed here, here, and here). What remains isn’t perfect – many of the concerns associated with the e-commerce chapter are left untouched – but the IP changes are very important. They restore some balance to that chapter and signal that Canadian officials are prepared to give more than just lip service to the issue when it comes to negotiating contentious IP provisions with our trading partners.

The post Rethinking IP in the TPP: Canadian Government Plays Key Role in Suspending Unbalanced Patent and Copyright Rules appeared first on Michael Geist.

Global Music Lobby Groups Hit Ottawa in Blitz Over Copyright Term Extension

Michael Geist Law RSS Feed - Wed, 2017/11/08 - 10:00

Global groups such as the International Confederation of Music Publishers and the U.S. National Music Publishers Association came to Ottawa this week to lobby the government to extend the term of copyright beyond the Berne Convention standard of life of the author plus an additional 50 years. The lobbying effort kicked off with a Hill Times piece, followed by an evening wine and dine event with politicians, a panel from the supposedly progressive Pearson Centre for Progressive Policy, and then yet more lobbying with Canadian music lobby groups. The lobbying campaign comes on the heels of the controversial 2015 copyright extension of sound recordings, which some groups used to sow confusion about the term of protection for sound recordings (from 50 to 70 years) with the term of protection for the composition or written work (frequently longer at life plus 50 years).

The possibility of term extension could come from two policy processes: trade talks and domestic review. On the trade front, Canadian officials are currently in Vietnam for talks that might lead to a conclusion of the TPP11. The original TPP included a term extension to satisfy U.S. pressure. Press reports indicate that Canada is one of several TPP countries that is seeking to freeze many IP provisions in a re-worked TPP, likely including the term extension requirement (freezing would mean that it would not take effect). There are also the NAFTA negotiations which could involve term extension, though all three countries currently have different (but internationally compliant) terms. Alternatively, the domestic review of the Copyright Act will take place over the coming year and those same groups can be expected to push for term extension as part of that process.

Yet the recent round of lobbying demonstrates that there are few good policy arguments to support term extension. Indeed, the argument appears to amount to just one: the U.S. and Europe have extended term, so Canada should follow suit. But that isn’t a policy argument nor based on compelling evidence that term extension would serve any of the goals of copyright policy such as increased incentives to create (no one seriously thinks that an additional 20 years of protection after death would result in the creation of more works) or increased access. In fact, David Lametti, the Parliamentary Secretary for the Minister of Innovation, Science and Economic Development and a leading IP expert, has written that we should re-think copyright terms by shortening the term of protection and adding registration requirements.

Indeed, there is considerable evidence that term extension would hurt access, increase costs for consumers, and harm Canadian education efforts that frequently rely on public domain materials. The negative effects of term extension has been confirmed by many economists, including in a study commissioned by Industry Canada, which have concluded that extending the term simply does not create an additional incentive for new creativity. Moreover, studies in other countries that have extended term have concluded that it ultimately costs consumers as additional royalties are sent out of the country. New Zealand, which faces a similar requirement, has estimated that an extension would cost its economy NZ$55 million per year. The Canadian cost is undoubtedly far higher. Rufus Pollock’s work has examined the value of the public domain and Paul Heald has written several important articles on the economic importance of the public domain. Heald found that Kickstarter projects based on public domain works were more likely to succeed and that commercial firms often use public domain works to create new commercial products.

The damage caused by the term extension involves more than just economic costs. It also creates a massive blow to access to Canadian heritage. Canadian publishers such as Broadview Press, an independent academic publisher that has been a vocal proponent of copyright, has warned about the dangers of the term extension to its business and the academic community:

Unlimited, or excessively long, copyright terms have often kept scholars from publishing (or even obtaining access to) material of real historical or cultural significance. They have severely restricted certain options for university teaching as well. Broadview’s editions of Mrs. Dalloway and of The Great Gatsby (edited by Jo-Ann Wallace and by Michael Nowlin, respectively), for example, are to my mind unrivalled. Each includes far more than just the text itself: explanatory notes, extended introductions, and an extraordinary range of helpful and fascinating background material in a series of appendices. They offer a truly distinctive pedagogical option. But instructors and students in the USA are still not allowed access to those editions.

Currently, we at Broadview are looking at publishing similar editions of works by other authors who have been dead for more than 50 but fewer than 70 years—works such as Orwell’s Animal Farm and 1984, for example; a Broadview edition of such works, with the appendices of contextual materials that are a feature of almost every Broadview edition, would provide highly valuable context for students at all levels. We are also looking forward to January 1, 2016, when we will finally be able to make the superb Broadview edition of The Waste Land and other Poems—with its excellent explanatory notes and extensive range of background material on modernism—available in Canada. (Eliot died in 1965.)

As I noted earlier this year, term extension would have a damaging effect on education beyond the loss of public domain compilations. 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.

Of the top 20 titles, fully half are in the public domain today or are about to enter the public within the next two years. The importance of the public domain within the classroom extends far beyond the most popular works. 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. These books are widely used as they represent 35% of the total mentions. Expanding even further to the entire list of 695 books, 96 books 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 the blind and sight impaired.

Second, there is another large category of works currently used in Canadian classrooms beyond the nearly 100 public domain titles. In fact, there are dozens of titles that are scheduled to enter the public domain within the next 20-25 years. These are the works that would be directly affected should Canada agree to extend the term of copyright as part of the TPP or NAFTA negotiations.

The downsides of term extension to the Canadian economy, culture, and education are readily apparent. Proponents offer politicians little more than a nice glass of wine and assurances that other countries have done it so Canada should too. Our trade negotiators and politicians should know better and should stand ready to respond that Canadian copyright is fully compliant with international law without the need to implement an expensive and unnecessary term extension.

The post Global Music Lobby Groups Hit Ottawa in Blitz Over Copyright Term Extension appeared first on Michael Geist.

Quebec Digital Sales Tax Bill Demonstrates the Complications That Come With Implementing a “Netflix Tax”

Michael Geist Law RSS Feed - Mon, 2017/11/06 - 10:50

The public policy battle over a digital sales tax to cover services such as Netflix continues in Canada with the introduction last week of a Quebec private members bill that would require the collection and remission of provincial sales tax by “persons with a significant online presence.” I’ve already written extensively about the longstanding policy work on digital sales taxes, the misleading claims about a level playing field, and how Canadian subscribers can pay the sales tax on Netflix today if they so choose. While there is an inevitably about digital sales taxes – it will come once global standards are sorted out – some still want the tax now without much regard for the challenges of implementation.

For example, Quebec Bill 997 adopts the “just do it” approach to digital sales tax. The bill covers the waterfront of digital tax issues: sales tax collection for those with a significant online presence, penalties for failure to file income tax returns, as well as penalties for payment providers who do not report purchases in the province when asked and for sites that conceal data about a significant provincial online presence.

The key phrase in the bill is “significant online presence”, which triggers most of the obligations. How is the phrase defined?  The bill states:

person is deemed to have a significant online presence if

(1) the person made a significant number of sales or service contracts with persons resident in Québec;
(2) a significant number of persons visit the website, from locations in Québec, through which the person’s goods and services are available;
(3) a significant number of payments are made to the person by persons located in Québec for the provision of goods or services; or
(4) the person collects and uses data of a personal nature from persons resident in Québec.

In other words, it isn’t really defined since a significant number of sales, visits or payments may mean different things to different businesses depending on their size and services. Further, mandated collection solely on the basis of website visitors or data collection seems problematic, requiring increased monitoring of website usage and tax collection with only a handful of sales. The collection and remission of sales taxes would create a non-trivial administrative burden that requires better than vague references to significant website visitors or data collection.

The challenges associated with the issue are not unique to the Quebec bill. The OECD has been actively working on digital sales tax issues, publishing a 2015 report that has served as the basis for digital tax policy efforts in many countries and launching a public consultation earlier this year that included a public event held last week in California.

The call for comments generated dozens of comments from groups from around the world, though notably no major Canadian organizations participated. A review of the hundreds of pages reveals a wide range of digital tax issues and proposals that would have enormous implications for the digital economy. On the issue of digital sales tax, it is clear that progress is being made, but that there remains concerns with the lack of consistency in approach between jurisdictions. This leads to a complicated compliance regime that is very costly, particularly for small and medium sized businesses.

Just how complicated can it get? The Federation of German Industries identified the following challenges with digital sales taxes:

Reverse-charge would not be a proper way of taxation since private final customers should not or cannot properly levy and remit VAT/GST. In this respect it seems a proper way to oblige the supplier itself to collect also local VAT in the destination country.

However, suppliers need to registers for VAT/GST in foreign countries where we identify the following difficulties:

  • Different local rules for registration
  • Different languages, different official VAT returns, different filing and payment deadlines in different countries
  • Different tax rates, different invoicing requirements to be met and to be permanently monitored
  • Different regimes in case of audits or requests
  • Overall significant burden for VAT/GST compliance in many countries, if supplies are made to customers in different countries
  • Significant burden combined with critical deadlines when remitting and paying VAT cross-border wise (international payments)

The submission also highlighted the challenges of place of supply rules with the need to reconcile accuracy and flexibility for digital services.

The Business and Innovation Advisory Committee at the OECD submission also points to some of the compliance challenges associated with digital sales taxes. Its recommendation includes:

Countries should be encouraged to introduce tools designed to alleviate the VAT/GST compliance burden facing particularly foreign businesses. These tools should include digital measures (e.g., allowing for remote e-filing), sensible registration thresholds, and safeguards against unnecessary additional registrations with no need for local bank accounts, local fiscal representation, local invoicing, and local language requirements. Such measures could significantly contribute to achieving greater levels of certainty and consistency.

The CBI, a leading British business association, provides best practices on digital sales taxes from around the world, including relatively high thresholds in Australia. Differing approaches is also a theme in a submission from KPMG, who note the following areas of inconsistency:

  • scope (just few digital services v. all services; B2C v. B2C + B2B)
  • liabilities of electronic data processors (“EDPs”) vary greatly between jurisdictions
  • registration threshold (nil v. same as domestic businesses)
  • registration (simplified registration v. standard registration) 
  • returns (complex v simple returns; monthly v. quarterly returns) 
  • invoicing requirements (required or not)
  • bookkeeping requirements 
  • data collection requirement (is the customer a business or not; where is the consumer located, etc.) 

All of this points to the fact that there is work being done on digital sales taxes around the world with active engagement from governments, businesses, and tax experts. Those efforts should ultimately lead to widespread digital sales tax implementation, but provide a reminder that legislative solutions that work for everyone requires more than poorly defined provisions such as those found in the latest Quebec bill.

The post Quebec Digital Sales Tax Bill Demonstrates the Complications That Come With Implementing a “Netflix Tax” 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.

Routing Detours: Can We Avoid Nation-State Surveillance?

Freedom to Tinker - Tue, 2016/08/30 - 18:44
Since 2013, Brazil has taken significant steps to build out their networking infrastructure to thwart nation-state mass surveillance.  For example, the country is deploying a 3,500-mile fiber cable from Fortaleza, Brazil to Portugal; they’ve switched their government email system from Microsoft Outlook to a state-built system called Expresso; and they now have the largest IXP […]

Differential Privacy is Vulnerable to Correlated Data — Introducing Dependent Differential Privacy

Freedom to Tinker - Fri, 2016/08/26 - 09:57
[This post is joint work with Princeton graduate student Changchang Liu and IBM researcher Supriyo Chakraborty. See our paper for full details. — Prateek Mittal ] The tussle between data utility and data privacy Information sharing is important for realizing the vision of a data-driven customization of our environment. Data that were earlier locked up […]

Language necessarily contains human biases, and so will machines trained on language corpora

Freedom to Tinker - Wed, 2016/08/24 - 16:32
I have a new draft paper with Aylin Caliskan-Islam and Joanna Bryson titled Semantics derived automatically from language corpora necessarily contain human biases. We show empirically that natural language necessarily contains human biases, and the paradigm of training machine learning on language corpora means that AI will inevitably imbibe these biases as well. Specifically, we look at […]
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