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Lobbying & Licensing: Behind the Recording Industry’s Campaign to Squeeze Out New Competitors

Michael Geist Law RSS Feed - Tue, 2015/05/05 - 08:31

My recent posts on the government’s surprise budget announcement that it plans to extend the term of copyright protection for sound recordings generated considerable private feedback, with several industry sources suggesting that the change is not quite what it seems. In fact, despite painting the reform as an effort to protect the rights of artists, foreign record companies have been primarily concerned with eliminating new competitors who offer cheaper, legal public domain recordings of popular artists such as the Beatles, Beach Boys, Bob Dylan, and the Rolling Stones.

From a consumer perspective, there is little doubt that the change will lead to higher prices for music. Multiple studies on copyright term extension for sound recordings have concluded that public domain recordings encourage competition between release companies and drive down the price for consumers. The songwriters are paid either way, but the consumers win with more choice and lower priced music.

My weekly technology law column (Toronto Star version, homepage version) notes that while some artists have lent support to the government’s proposed changes, the bigger story is what has been happening behind the scenes. As new public domain-based recordings began to appear at major Canadian retailers, foreign record labels adopted a two-pronged strategy: intense lobbying for legislative changes to lock down recordings for decades and blocking royalty payments to copyright owners to keep the new competitors out of the market.

The lobbying campaign started in the fall with Music Canada, the lead recording industry lobby group, hiring Tanya Peatt as its new Director of Regulatory Affairs. Peatt, who served as Industry Minister James Moore’s lead copyright policy advisor for five years, was charged with responsibility for the management and strategic direction of the industry’s relationship with the federal government.

Weeks later, Music Canada registered lobbyists began near-monthly meetings with Patrick Rogers, the Director of Policy for Canadian Heritage Minister Shelly Glover. Rogers is the former Director of Parliamentary Affairs with the Prime Minister’s Office. While a government spokesperson indicated that “it is not our practice to comment on the content of meetings with stakeholders”, the meetings appear to have had their desired effect with the copyright changes promised in the budget.

Amy Terrill, Music Canada’s Vice-President of Public Affairs defended the approach, voicing support for the changes and noting that “we believe that it is important to promote and protect the value of music and its production and we are a passionate advocate for music and those who create it. As part of that advocacy, we meet regularly with elected and non-elected representatives of all levels of government.”

If the backroom lobbying campaign does not surprise, the effort to stop copyright owners from being paid surely does. New competitors in the Canadian marketplace obtained “pay as you press” licences from the Canadian Musical Rights Reproduction Agency (CMRRA), which cover the copyright royalties for music publishers. The licences require payment for every song included on a record, ensuring that the payments add up quickly.

Those licences covered the initial run of records that made their way into Canadian stores and made sure that the artists were paid for the use of their work. Given the initial sales and the royalty rates, the low-cost records generated thousands in royalties for the copyright holders.

Yet once the major record labels became aware that the licences were being used to create competitive products, they ordered CMRRA to stop issuing any licences. CMRRA advised the new competitors that it had no choice but to stop issuing the licence and that the decision stemmed from the fact that the master recordings were in the public domain. Interestingly, these licences are compulsory in the United States and the United Kingdom, where permission from the copyright owner is not required.

Without the CMRRA licence, the new competitors are unable to compete in the marketplace. When combined with the government’s legislative proposal, that leaves few winners: foreign record labels can maintain their high prices, but consumers face the prospect of less choice and artists lose as a new source of revenue since re-releases of older titles and new public domain compilations are effectively blocked from the Canadian market.

The post Lobbying & Licensing: Behind the Recording Industry’s Campaign to Squeeze Out New Competitors appeared first on Michael Geist.

Behind the Recording Industry’s Campaign to Squeeze Out New Competitors

Michael Geist Law RSS Feed - Tue, 2015/05/05 - 08:18

Appeared in the Toronto Star on May 2, 2015 as Behind the Recording Industry’s Latest Campaign

Last week’s column on the government’s surprise budget announcement that it plans to extend the term of copyright protection for sound recordings generated considerable private feedback, with several industry sources suggesting that the change is not quite what it seems. In fact, despite painting the reform as an effort to protect the rights of artists, foreign record companies have been primarily concerned with eliminating new competitors who offer cheaper, legal public domain recordings of popular artists such as the Beatles, Beach Boys, Bob Dylan, and the Rolling Stones.

From a consumer perspective, there is little doubt that the change will lead to higher prices for music. Multiple studies on copyright term extension for sound recordings have concluded that public domain recordings encourage competition between release companies and drive down the price for consumers. The songwriters are paid either way, but the consumers win with more choice and lower priced music.

While some artists have lent support to the government’s proposed changes, the bigger story is what has been happening behind the scenes. As new public domain-based recordings began to appear at major Canadian retailers, foreign record labels adopted a two-pronged strategy: intense lobbying for legislative changes to lock down recordings for decades and blocking royalty payments to copyright owners to keep the new competitors out of the market.

The lobbying campaign started in the fall with Music Canada, the lead recording industry lobby group, hiring Tanya Peatt as its new Director of Regulatory Affairs. Peatt, who served as Industry Minister James Moore’s lead copyright policy advisor for five years, was charged with responsibility for the management and strategic direction of the industry’s relationship with the federal government.

Weeks later, Music Canada registered lobbyists began near-monthly meetings with Patrick Rogers, the Director of Policy for Canadian Heritage Minister Shelly Glover. Rogers is the former Director of Parliamentary Affairs with the Prime Minister’s Office. While a government spokesperson indicated that “it is not our practice to comment on the content of meetings with stakeholders”, the meetings appear to have had their desired effect with the copyright changes promised in the budget.

Amy Terrill, Music Canada’s Vice-President of Public Affairs defended the approach, voicing support for the changes and noting that “we believe that it is important to promote and protect the value of music and its production and we are a passionate advocate for music and those who create it. As part of that advocacy, we meet regularly with elected and non-elected representatives of all levels of government.”

If the backroom lobbying campaign does not surprise, the effort to stop copyright owners from being paid surely does. New competitors in the Canadian marketplace obtained “pay as you press” licences from the Canadian Musical Rights Reproduction Agency (CMRRA), which cover the copyright royalties for music publishers. The licences require payment for every song included on a record, ensuring that the payments add up quickly.

Those licences covered the initial run of records that made their way into Canadian stores and made sure that the artists were paid for the use of their work. Given the initial sales and the royalty rates, the low-cost records generated thousands in royalties for the copyright holders.

Yet once the major record labels became aware that the licences were being used to create competitive products, they ordered CMRRA to stop issuing any licences. CMRRA advised the new competitors that it had no choice but to stop issuing the licence and that the decision stemmed from the fact that the master recordings were in the public domain. Interestingly, these licences are compulsory in the United States and the United Kingdom, where permission from the copyright owner is not required.

Without the CMRRA licence, the new competitors are unable to compete in the marketplace. When combined with the government’s legislative proposal, that leaves few winners: foreign record labels can maintain their high prices, but consumers face the prospect of less choice and artists lose as a new source of revenue since re-releases of older titles and new public domain compilations are effectively blocked from the Canadian market.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

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Study Reports Big Drop in Spam Following Canadian Anti-Spam Law Implementation

Michael Geist Law RSS Feed - Thu, 2015/04/30 - 08:24

The launch of Canada’s anti-spam law generated considerable criticism suggesting that the law was unenforceable and would not have a discernible impact on spam. Recent enforcement actions by the CRTC and the Competition Bureau, which led to millions on fines, demonstrates that the law can be used to target businesses that run afoul of the law. Now a new study from Cloudmark, a network security firm, concludes that there was a significant drop in spam originating from Canada once the law took effect. Moreover, Canadians received considerably less email after CASL was implemented. Cloudmark states:

Last year Canada implemented one of the strongest anti-spam laws in the world, CASL. We took a close look at the impact, and the results surprised us. We saw a 37% reduction in spam originating from Canada, but it wasn’t just spam that went down. Over all, Canadians received 29% less email after CASL was implemented. We believe this is because there was a lot of marketing email which was not technically spam but did not meet the stringent requirements for affirmative consent required by CASL. The Canadian law is proving effective in reducing inbox clutter and could act as a model for stronger anti-spam laws in the US, UK and other countries.

Indeed, the charts posted in the full Cloudmark report are striking, showing a noticeable drop in spam originating in Canada and email received in Canada after CASL was implemented. It is still early days for Canada’s anti-spam law, but the Cloudmark report suggests that it is having an impact and touts it as a model for others.

The post Study Reports Big Drop in Spam Following Canadian Anti-Spam Law Implementation appeared first on Michael Geist.

Canadian Government on Copyright Notice Flood: “It’s Not a Notice-and-Settlement Regime”

Michael Geist Law RSS Feed - Wed, 2015/04/29 - 08:43

The flood of copyright notices in Canada continues to attract attention and generate concern among many Canadians. I’ve posted several pieces on the issue, including a recent post on what recipients should consider if they receive a notice. I still receive daily emails from notice recipients, with some admitting that they quickly paid the settlement in a panic and now fear that they may have opened the door to even more settlement demands. In response to this copyright abuse, I was pleased to participate in an open letter signed by many groups calling on the government to fix the loopholes in the notice-and-notice system by prohibiting the inclusion of settlement demands within the copyright notices.

A recent Metro article suggests that the government is well aware that the system is being misused. Industry Minister James Moore’s press secretary Jake Enwright emphasizes that “there is no obligation for Canadians to pay these settlements” and that the current system is “not a notice-and-settlement regime.” Those are encouraging words that come as close as the government can to tell consumers that it does not believe that settlements should be included in the notices and to hint that it does not expect Canadians to pay.

With CEG TEK, the primary notice sender, leaving little doubt that it intends to continue, it falls to the government to address the problem. Enwright says that the government is waiting for the industry to identify an appropriate solution, but the real problem lies with the absence of regulations that prohibit the inclusion of settlement demands within notices that were designed to educate, not bully Canadians into paying pricey settlements. The government often talks about a copyright balance, yet it has decided to move ahead with copyright term extension without any consultation following backroom lobbying from the recording industry and is somehow is content to leave thousands of Canadians without protection against misuse of the very system it created.

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Canada joins Marrakesh Treaty

Sara Bannerman - Tue, 2015/04/28 - 14:42
I have long called on the Canadian government to join the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled. yesterday, the Toronto Star reports that Industry Minister James Moore announced Canada's accession.  This is great news.

Eight countries have ratified or acceded to the Marrakesh Treaty, which will enter into force when that number reaches 20.  Canada's accession brings that number to 9.  Canada is the first G7 country to implement the treaty.

The Power of Backroom Lobbying: How the Recording Industry Got Their Copyright Term Extension

Michael Geist Law RSS Feed - Tue, 2015/04/28 - 09:35

The government’s unexpected budget decision to extend the term of copyright for sound recordings came as a surprise to most copyright watchers, but not the music industry lobby. Music Canada (formerly the Canadian Recording Industry Association) was ready within minutes with a press release, backgrounder, and quotes from musicians that were previously critical of Prime Minister Stephen Harper. How did the industry seemingly know this was coming?

The monthly lobbyist communications reports tell the story as beginning last fall, Music Canada registered lobbyist David Dyer met almost monthly with Patrick Rogers, the Director of Policy for Canadian Heritage Minister Shelly Glover. The meetings began in November at roughly the same time as Universal Music began expressing concern about the Canadian distribution of public domain Beatles records. The lobbyist registry lists meetings on November 10, November 26, December 5, February 17, and March 18. In addition, there was a meeting with James Maunder, Chief of Staff to Industry Minister James Moore on November 28th, though it is clear that Canadian Heritage had the lead on the issue.

Near monthly access to Rogers paid off with promise to extend the term of copyright despite the absence of public consultation on the issue, increased consumer costs, and reduced choice. By comparison, Europe spent years of study and intense debate over whether to extend the term of copyright, with numerous experts reports warning against it and many European countries opposing the measure. Rogers was apparently an excellent internal advocate, particularly given his experience with the Prime Minister’s Office. Rogers is the former Manager of Parliamentary Affairs with the Prime Minister’s Office. If the name is familiar, it may be because he is named in the RCMP allegations against Senator Mike Duffy. Indeed, the RCMP evidence indicates that he was involved in meetings and emails related to the Duffy affair and recent reports indicate that he may be called to testify at the Duffy trial.

I asked Canadian Heritage officials to comment on the nature of the discussions between Music Canada lobbyists and ministry officials. Their response simply stated “It is not our practice to comment on the content of meetings with stakeholders.” In this case, there is no need. The outcome says it all.

The post The Power of Backroom Lobbying: How the Recording Industry Got Their Copyright Term Extension appeared first on Michael Geist.

Competition Killer: Why the Copyright Term Extension For Sound Recordings Will Limit Consumer Choice and Increase Costs

Michael Geist Law RSS Feed - Mon, 2015/04/27 - 10:16

As the negative coverage of the government’s surprise decision to extend the term of copyright for sound recordings and performances mounts (Billboard, National Post), it is worth remembering that it is Canadian consumers that will bear the costs with decreased choice and increased prices. I touch on this in my weekly technology law column (Toronto Star version, homepage version), but a more detailed discussion is warranted (see here, here, and here for previous posts on the proposed extension).

The question of competition and consumer costs was addressed in several leading European reports on intellectual property and term extension. The University of Cambridge’s Centre for Intellectual Property and Information Law reviewed the economic evidence related to term extension for sound recordings, stating:

When a music company or artist earns more because of a term extension that money must come from somewhere. Crudely, there are only two possibilities. On the one hand, the money came from some other firm, perhaps the “public domain specialist”, who, in the absence of a term extension, would have been able to enter the market for as a seller of the recording. On the other hand, the money came from end-users who without a term extension would have been the recipients of lower prices. Theory inclines us towards the second possibility: greater competition to supply a recording once it enters the public domain should operate to drive down prices, transferring value from producers to consumers.

The Gowers Review of Intellectual Property, a leading independent UK report, comes to much the same conclusion:

As sound recordings of enduring popularity enter the public domain, economic theory suggests that competition between many release companies will drive down the price, just as has occurred in the public domain book market for classic literature. Therefore, the review believes that most of the increased revenue from term extension would come directly from consumers who would pay higher (i.e. monopoly) prices for longer.

So did a report for the European Commission conducted by the Institute for Information Law at the University of Amsterdam, which noted:

when the exclusive reproduction right for phonograms expires, any competing record company can make use of it and release the same recording potentially at lower prices. An extended protection would prolong the temporary monopoly of the original phonogram producers, preventing the downward pressure of competition on prices. As a result, consumers would continue to pay higher prices for certain sound recordings for several years.

Canadian consumers are seeing this issue unfold right now at Walmart Canada. A search for the Beatles reveals many choices, the overwhelming majority of which are offered by Universal Music, the international record giant. But consider these results and guess which is not offered by Universal Music.

Beatles at Walmart, Walmart.ca

The answer is unsurprisingly the $5 record, which is far cheaper than anything else being offered. It is a public domain record released by Stargrove Entertainment featuring 11 songs, virtually all written by Lennon and McCartney. The composers are paid royalties for their work. What distinguishes this record is that it is a non-Universal record offered at a much lower price.

As the Gowers review predicted, public domain recordings encourage competition between release companies and drive down the price for consumers. The songwriters are paid either way, but the consumers win with more choice and lower priced music. Increased competition is good for consumers and for the creators of the songs, yet the government’s decision to extend the term of copyright for sound recordings effectively reduces choice and eliminates competitors. Given the outcome that generates profit for record companies decades after their investment at the expense of consumers, it should come as little surprise to find that Music Canada, the lead record company lobby group, engaged in extensive lobbying with the Director of Policy at the Minister of Canadian Heritage in the months leading up to the budget. More on their lobbying campaign in an upcoming post.

The post Competition Killer: Why the Copyright Term Extension For Sound Recordings Will Limit Consumer Choice and Increase Costs appeared first on Michael Geist.

Behind the Government’s Multi-Million Dollar Budget Gift to the Recording Industry

Michael Geist Law RSS Feed - Mon, 2015/04/27 - 10:10

Appeared in the Toronto Star on April 25, 2015 as Music Copyright Changes in Federal Budget Hit a Sour Note

The Conservative government’s budget last week included benefits for some families, assistance for seniors, and future tax reductions for small businesses. While those measures were widely anticipated, more surprising was the multi-million dollar gift to foreign record companies, who were overjoyed at the decision to extend the term of copyright and keep some sound recordings out of the public domain for decades.

The government unexpectedly announced that it was extending the term of copyright for sound recordings and performances from the current 50 years of protection to 70 years. While the industry emphasized the expiry of copyright for creators, the reality is that copyright in songs lasts for the life of the songwriter plus an additional 50 years. What is therefore at stake with the government’s proposed copyright term extension is not copyright in the song, but rather in the sound recording. Recording companies, not the artists, often hold those rights.

The European Union debated copyright term extension for these rights several years ago and studies on the issue found that the vast majority of revenues went to the record labels, rather than the artists. For example, one study estimated that the costs to the public would exceed one billion euros with 72 per cent of the benefits going to record labels.

The European Union ultimately passed an extension from 50 to 70 years in 2011, but not without significant opposition from member states. Eight countries – Belgium, Czech Republic, Luxembourg, Netherlands, Romania, Slovakia, Slovenia and Sweden – all voted against, while Austria and Estonia abstained. Sweden argued that the extension was “neither fair nor balanced”, while Belgium feared that it would mainly benefit record producers and negatively affect access to cultural materials in libraries and archives.

While the European experience on term extension for sound recordings and performances is instructive, there have been Canadian studies that have reached similar conclusions. Industry Canada commissioned University of Montreal economist Abraham Hollander to examine the issue in 2005 and his study concluded that the economic value of a term extension to the recording industry was very small.

Not only is the economic benefit tiny, but the issue was scarcely on the public radar screen. It was rarely raised during the 2012 copyright reform process. Moreover, last year the Standing Committee on Canadian Heritage conducted a major review of the music industry in Canada with dozens of witnesses taking the time to appear or submit briefs. The final report and the government’s response never identified the term of protection for sound recordings and performances as a concern.

The decision is particularly puzzling given the government’s efforts to paint itself as pro-consumer and anti-piracy. In recent months, the Canadian market had begun to see new cheaper music choices of popular artists such as the Beatles offered through retail giants like Walmart. Those records were offered for a fraction of the price of major labels, yet the copyright holders were still compensated for the work.

Extending the term of copyright will remove those choices from the market at the very time that Industry Minister James Moore and Canadian Heritage Minister Shelly Glover have emphasized the need to find ways to encourage consumers to pay for music. Further, it will raise prices and harm small innovative Canadian companies in order to ensure that large foreign record labels maintain their profits.

The government has characterized the reforms as good for the Canadian economy, yet the opposite would appear to be true. Music industry lobbyists met repeatedly with Canadian Heritage officials in the months leading up to the budget and appear to have walked away with copyright reforms that will result in copyright holders in the songs earning less revenue, the Canadian public domain being harmed, and new Canadian business models based on the public domain being extinguished.


Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

The post Behind the Government’s Multi-Million Dollar Budget Gift to the Recording Industry appeared first on Michael Geist.

Is the Great Canadian Copyright Giveaway Really About Some Cheap Beatles Records?

Michael Geist Law RSS Feed - Thu, 2015/04/23 - 15:32

The government’s surprise decision to include copyright term extension for sound recordings and performances in this week’s budget is being painted by the music industry as important for Canadian artists. But sources suggest that the key reason for the change is lobbying from foreign record labels such as Universal Music and Sony Music, who were increasingly concerned with the appearance of public domain records from artists such as the Beatles appearing on store shelves in Canada. As discussed in this post, Canadian copyright law protects the song for the life of the author plus 50 years. However, the sound recording lasts for 50 years. That still provides decades of protection for record companies to profit from the records, but that is apparently not long enough for them.

Earlier this year, a Canadian company called Stargrove Entertainment began selling two Beatles records featuring performances that are in the public domain in Canada. The records were far cheaper than those sold through Universal Music and were picked up by retail giant Walmart, who continues to list the records on their website (Can’t Buy Me Love, Love Me Do). There were additional titles featuring the Rolling Stones, Bob Dylan, and the Beach Boys. Some of the titles are still available for sale through Walmart.

The Stargrove Entertainment records provided Canadian consumers with low-priced alternatives while still ensures that the authors of the songs received the approriate royalties. While the sound recording is in the public domain for these works, the song itself remains subject to copyright. Therefore, the song writers were still paid for every record sold. The difference is that Universal Records was not profiting from the sale. Instead, a small Canadian company was succeeding in selling the records at a lower price to Canadian consumers.

The Stargrove Entertainment records effectively broke the monopoly enjoyed by Universal Music and Sony Music over these popular artists by offering consumers more choice at better prices. After pressure on distributors and retailers failed to stop the sales, the companies began lobbying the government to change the law. Indeed, Music Canada lobbyists met with officials in the Minister of Canadian Heritage’s office in both February and March of this year.  The Harper government’s decision to cave to pressure from a couple of foreign record labels in a matter of months is remarkable. After years of concern that consumers don’t pay for music, there was a Canadian company that was offering consumers lower-priced versions of music with full payments to the songwriters. Yet because foreign record companies were not also profiting, they sought to change the law and stop the sales.

The government characterizes the reforms as good for the Canadian economy, yet the opposite is true. The changes benefit large foreign record labels at the expense of a small Canadian upstart and ensure that consumer prices for music remain high. As a result, the copyright holders in the songs will earn less revenue, the Canadian public domain is harmed, and new Canadian business models based on the public domain are extinguished.

The post Is the Great Canadian Copyright Giveaway Really About Some Cheap Beatles Records? appeared first on Michael Geist.

Canadian Recording Industry: Works Entering the Public Domain Are Not in the Public Interest

Michael Geist Law RSS Feed - Thu, 2015/04/23 - 10:22

On World Book and Copyright Day, it is worth noting how Graham Henderson, the President of Music Canada (formerly the Canadian Recording Industry Association) characterized the government’s decision to extend the term of copyright in sound recordings and performances:

With each passing day, Canadian treasures like Universal Soldier by Buffy Sainte-Marie are lost to the public domain. This is not in the public interest.  It does not benefit the creator or their investors and it will have an adverse impact on the Canadian economy.”

This statement raises several issues. First, it should be noted that the song Universal Soldier by Buffy Sainte-Marie is not in the public domain nor will it be entering the public domain for decades. As the songwriter, Buffy Sainte-Marie still holds copyright in the song and will do so for her entire lifetime plus an additional 50 years (Howard Knopf further explains the issue of copyright term in songs in this post).

What is at stake with the government’s proposed copyright term extension is not copyright in the song, but rather in the sound recording or performance. Those rights are often held by recording companies, not the artists. They are not authors rights, but rather “related rights” that are found in particular recordings. European studies on term extension for these rights found that the vast majority of revenues went to the record labels, not the artists.

Second, Henderson offers up a vision of the public domain where increasing access to works is somehow counter to the public interest. How would the public be better served by having less access and fewer works in the public domain? The recording industry would obviously like to keep works from entering the public domain so that it can continue to profit from them decades after having recouped their initial investment. Yet it hard to see how anyone can credibly claim that works are “lost” to the public domain and that the public interest in not served by increased public access.

Third, Henderson claims that works entering the public domain have an adverse effect on the Canadian economy. Numerous studies on the economic impact of the public domain find precisely the opposite. For example, 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. Most recently, 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. James Boyle’s book on the public domain is essential reading as is Yochai Benkler’s work on this issue. The expert analysis demonstrates that copyright term extension hurts the economy and the government’s decision to extend the term of copyright in sound recordings in Budget 2015 is likely to both harm the Canadian economy and undermine Canadians’ access to their cultural heritage.

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The Great Canadian Copyright Giveaway: Why Copyright Term Extension for Sound Recordings Could Cost Consumers Millions

Michael Geist Law RSS Feed - Wed, 2015/04/22 - 08:45

Randy Bachman, the well-known Canadian musician, found himself embroiled in a public fight with Prime Minister Stephen Harper last year when Harper used his song “Takin’ Care of Business” as a theme song for a major speech. Bachman said he probably would not have granted permission to use the song, since “I don’t think he’s taking care of business for the right people or the right reasons.” Bachman was singing a different tune yesterday as the government released its budget and apparently took care of the right people – record companies. Despite no study, no public demands, and the potential cost to the public of millions of dollars, the government announced that it will extend the term of copyright for sound recordings and performances from 50 to 70 years. For that giveaway, Bachman was quoted as saying “thanks for the term extension PM Harper, you really are taking care of business.”

While the government lined up industry supporters to praise the term extension, the decision is unexpected and unnecessary (it also announced that it will accede to the Marrakesh copyright treaty for the blind, but that should not require significant domestic reforms). The music industry did not raise term extension as a key concern during either the 2012 copyright reform bill or the 2014 Canadian Heritage committee study on the industry. Experience elsewhere suggests that the extension is a windfall for record companies, with little benefit to artists or the public. In fact, many countries that have implemented the extension have been forced to do so through trade or political agreements, while signalling their opposition along the way.

[Update: New post linking the term extension to lobbying from Universal Music over the release of cheaper public domain Beatles records in Canada.]

Canada will extend term without any public discussion or consultation, yet other studies have found that retroactive extension does not lead to increased creation and that the optimal term length should enable performers and record labels to recoup their investment, not extend into near-unlimited terms to the detriment of the public. For Canadian consumers, the extension could cost millions of dollars as works that were scheduled to come into the public domain will now remain locked down for decades.

For example, the 2006 Gowers Report on Intellectual Property, a wide ranging and well respected government-sponsored review in the UK, came out against term extension for sound recordings and performances:

In conclusion, the Review finds the arguments in favour of term extension unconvincing. The evidence suggests that extending the term of protection for sound recordings or performers’ rights prospectively would not increase the incentives to invest, would not increase the number of works created or made available, and would negatively impact upon consumers and industry. Furthermore, by increasing the period of protection, future creators would have to wait an additional length of time to build upon past works to create new products and those wishing to revive protected but forgotten material would be unable to do so for a longer period of time. The CIPIL report indicates that the overall impact of term extension on welfare would be a net loss in present value terms of 7.8 per cent of current revenue, approximately £155 million.

A Dutch study on intellectual property reached the same conclusion, noting that the arguments in favour of extension were unconvincing and that the extension would create significant costs for consumers and society as a whole. It concluded:

To conclude, the arguments made in favour of a term extension are not convincing. Many arguments already fall outside the objectives of related rights protection for phonograms. The fact that some recordings still have economic value as rights therein expire, cannot in itself provide a justification for extending the term of protection. Related rights were designed as incentives to invest, without unduly restricting competition, not as full-fledged property rights aimed at preserving ‘value’ in perpetuity. Other arguments do not convince because a term extension would either be ineffective in addressing the concerns in question, because there are other, better remedies available or advisable, or because the costs of an extension would outweigh its eventual benefits. The term of related rights must reflect a balance between  incentives, market freedom and costs for society. This balance will be upset when terms are extended for the mere reason that content subject to expiration still has market value. The public domain is not merely a graveyard of recordings that have lost all value in the market place. It is also an essential source of inspiration to subsequent creators, innovators and distributors.

With many more studies and reports reaching the same conclusion (see here, here, here, and here) – some estimating that the costs to the public would exceed one billion euros with 72 percent of the benefits going to record labels – the issue unsurprisingly proved very controversial in Europe. The European Union ultimately passed an extension from 50 to 70 years in 2011, but not without significant opposition from member states.  Eight countries – Belgium, Czech Republic, Luxembourg, Netherlands, Romania, Slovakia, Slovenia and Sweden – all voted against, while Austria and Estonia abstained.  Sweden argued that the extension was “neither fair nor balanced”, while Belgium argued that it would mainly benefit record producers and negatively affect access to cultural materials in libraries and archives.

Belgium’s concern regarding the lack of benefit for artists was also reflected in the Gowers report, which noted:

If the purpose of extension is to increase revenue to artists, given the low number of recordings still making money 50 years after release, it seems that a more sensible starting point would be to review the contractual arrangements for the percentages artists receive.

While the European experience on term extension for sound recordings and performances is instructive, there have been Canadian studies that have reached similar conclusions. Industry Canada commissioned University of Montreal economist Abraham Hollander to examine the issue in 2005.  Hollander’s study found that the economic value of a term extension to the recording industry was very small:

[Sound recordings] are protected for a period of 50 years from fixation. Adding 20 years of protection would contribute 2.3% to the present value of royalties under a 7% discount rate, assuming that the flow of royalties remains unchanged during the whole period. Under identical assumptions, extending the protection period to 100 years would contribute a mere 3.0% to the present value. This, however, is true only if the royalty flow remains constant over time. When the annual royalties decline rapidly over time, as is typical, the increase in present value would be considerably smaller.

Not only have the studies come out against term extension, but copyright stakeholders have not publicly emphasized the issue. Term extension for sound recordings and performances was nowhere to be found among the thousands of submissions to the 2010 copyright consultation, it was not discussed in the 2002 Canadian roadmap for copyright reform, and groups like the Canadian Independent Record Production Association and the American Federation of Musicians of the United States and Canada did not raise it in their submissions on copyright reform. The music industry’s form letter did not discuss term extension and it was not an issue that was prominently raised in the 2012 copyright reforms. In fact, just last year the Standing Committee on Canadian Heritage conducted a major review of the music industry in Canada with dozens of witnesses taking the time to appear or submit briefs. The final report and the government’s response never raise the term of protection for sound recordings and performances as a concern.

Why is the government using the budget to enact copyright term extension that primarily benefits foreign record labels, has proven controversial elsewhere, has been largely dismissed by numerous studies (including one funded by the government), was not the subject of a major public campaign from stakeholders, and that could cost Canadians millions of dollars?

My best guess is the Trans Pacific Partnership agreement. The TPP is nearing the end game and the U.S. is still demanding many changes to Canadian copyright law, including copyright term extension for all works (not just sound recordings). The Canadian government’s strategy in recent years has been to enact reforms before the trade agreements are finalized in order to enhance its bargaining position. For example, it moved forward with notice-and-notice rules for Internet providers without the necessary regulations in order to have the system in place and protect it at the TPP talks. It may be trying to do the same here by extending term on sound recordings and hoping that that concession satisfies U.S. copyright demands. Yet the concession comes at a significant price – locked down works and increased costs to consumers -  while providing another reminder that too often Canadian copyright law is effectively written by U.S. lobby groups who do not have Canadian interests in mind.

The post The Great Canadian Copyright Giveaway: Why Copyright Term Extension for Sound Recordings Could Cost Consumers Millions appeared first on Michael Geist.

Copyright For Sale: How the Sony Documents Illustrate the Link Between the MPAA and Political Donations

Michael Geist Law RSS Feed - Tue, 2015/04/21 - 10:26

The linkage between political funding and the major copyright lobby groups is not a new issue as for years there have been stories about how groups like the MPAA and RIAA fund politicians that advance their interests. Sites like OpenSecrets disclose the spending, though it gets complicated given how much money comes from individual companies or corporate executives. While those sites tell the story of how much, the recent leak of Sony emails reveal the how. They demonstrate the coordinated efforts by the MPAA to raise hundreds of thousands of dollars for certain politicians with direct efforts from MPAA CEO Christopher Dodd to solicit donations from among the Hollywood studios. This will not be news to those who have been following Lawrence Lessig in recent years, but the matter-of-fact tone of these emails is still revealing.

Some of the examples include efforts by Dodd, a former Democratic Senator, to raise $40,000 per studio for Judiciary Chair Bob Goodlatte:

Call from Dodd re NRCC/Judiciary Chairman Bob Goodlatte:  Chairman Goodlatte has established a new fundraising committee that would allow contributions to his effort WITHOUT giving to the NRCC (all of the studios had the same sensitivity on this as we did).  Dodd is likely to call you with this news, tell you that the studio should support with $40k each, and tell you about the tentative date/time for this fundraiser (likely a lunch on 11/22).  Our PAC can give $15k, the rest would need to come from individual execs.

The Goodlatte fundraiser raised concerns among the studios, yet it later expanded into a breakfast fundraiser for Goodlatte and a lunch fundraiser for Senator Orrin Hatch:

With respect to the timing of a fundraiser either just before/just after the LACS event, I understand Dodd will be calling board members early next week to make a fundraising push – both for Goodlatte and/or the NRCC (the expectation is an aggregate of $100k) and Orin Hatch and/or NRSC (also 100k, which smells a little bit like a Disney play regarding corp. tax reform).  Given that we have given to these folks this cycle, I think much of this would have to be personal money versus PAC dollars – I’m evaluating and will circle back with details in terms of what could be absorbed by our PAC, but wanted you to have the state of play now.  FWIW, I’ve told Joanna that I have doubts regarding our ability to meet goals if this is all personal $$$ (roughly 34k).

Another email noted that more money could be given to Hatch through the Sony PAC.

Fundraising is not limited to senators. There are also fundraising for members of the House of Representatives (this one for Karen Bass) and fundraising for state governors, including New York Governor Andrew Cuomo, which cost $10,000 per couple.

If that were not enough, there is also a strategy to expand the ability to provide funding to an MPAA political action committee:

MPAA membership expansion for PAC contribution purposes: For legal/structural reasons, the MPAA PAC can only solicit contributions from senior MPA execs and the member companies… This means that Dodd finds himself routinely on the other side of an enormous number of fundraising requests with roughly $50k a year to draw from.  It’s not vetted yet, but I think he wants to float a concept that would allow the membership to change in such a way to allow more individuals to contribute to the MPA PAC (e.g., if there was some high-level producer or studio exec as a “member” of some sort then they could contribute individually, etc.).  Depending on the approach, this would have FEC implications and labor relations implications – I think he understands that, but really wants to gauge reactions from board in terms of exploring viability of this.

What does all of this buy? The emails show lunch with the President of the United States, direct calls with the head of the USTR, and meetings with Prime Ministers (Spain, UK). Further, while there are no references to Canadian meetings in the Sony documents, I wrote in 2012 about meetings between Dodd and then-Canadian Heritage Minister James Moore, then-Foreign Minister John Baird, and then-Industry Canada Senior Associate Deputy Minister Simon Kennedy, all on the same day. The post included a briefing note I obtained under the Access to Information Act that discussed MPAA demands and the Canadian response.

The post Copyright For Sale: How the Sony Documents Illustrate the Link Between the MPAA and Political Donations appeared first on Michael Geist.

Race to the Bottom: Why Government Tax Credits For Film and TV Production Don’t Pay

Michael Geist Law RSS Feed - Mon, 2015/04/20 - 10:07

The Nova Scotia government has been embroiled in a high profile controversy for the past week following its decision to slash tax credits available to film and television production in the province. The decision sparked an immediate backlash from the industry, which staged a major protest last Wednesday across from the legislature in Halifax.

While the government’s approach is certainly open to criticism – abruptly cutting the tax credits without warning may force the cancellation of long-planned productions this summer – the larger question of whether it should provide massive tax relief to the film and television industry is an important one. Eliminating or cutting the programs is politically difficult given the star power associated with film and television production, yet a growing number of studies have found that film and television tax credits do not deliver much bang for the buck.

My weekly technology law column (Toronto Star version, homepage version) notes that the widespread use of film and television production tax subsidies dates back more than two decades as states and provinces used them to lure productions with the promise of new jobs and increased economic activity. The proliferation of subsidies and tax credits created a race to the bottom, where ever-increasing incentives were required to distinguish one province or state from the other.

In recent years, governments have begun to rethink the strategy. States such as Arizona, Michigan, New Mexico, and Iowa suspended or capped their programs. Louisiana found that it lost $170 million in tax revenue in a single year. In Canada, the Quebec government’s taxation review committee recently admitted that its provincial film production tax credit was not profitable and that numerous studies find that there is little economic spinoff activity.

But the most notable Canadian study on the issue has never been publicly released and is rarely discussed. The Ontario government’s Ministry of Finance conducted a detailed review of the issue in 2011, delivering a sharply negative verdict on the benefits associated with spending hundreds of millions of dollars each year in tax credits. It recommended eliminating a 25 per cent tax credit for foreign and non-certified domestic productions that would have saved $155 million per year.

A copy of the presentation to cabinet, obtained under the Freedom of Information Act, identifies at least four major problems with the provincial film and television tax credit approach.

First, rather than encouraging increased spending, government subsidies represent the majority of financing for film and television production. In 2010, tax credits, grants, and other public funding mechanisms subsidized approximately 60 per cent of all Ontario-based film and television production spending. Moreover, the corporations that claim tax credits pay no tax at all, with the total value of the tax credits being 6 times greater than the total tax income of domestic claimants.

Second, the sector is becoming more dependent on government support. In 1998, film tax credit expenditures constituted six per cent of production costs. Ten years later, there were fewer productions in Ontario, but the film tax credit expenditures were responsible for 30 per cent of the costs.

Third, the mounting government expenditures might be justified if it resulted in the creation of long-term high paying jobs. However, the Ontario government study found that film sector wages were below the provincial average and that many of those jobs were temporary, project-based ones.

Fourth, evidence suggests that other factors beyond tax incentives play a key role in determining the location of production activity. For example, the Ontario experience over the past two decades shows that foreign production is typically highest when the Canadian dollar is low relative to the U.S. dollar.

While the economic evidence to support film and television tax credits is weak, that does not mean that governments should not support the industry since the importance of culture extends beyond dollars and cents. Nova Scotia’s decision may be unpopular with some, but it is likely to be emulated by other governments as they assess how to support the film and television industry in a more economically responsible and effective manner.

The post Race to the Bottom: Why Government Tax Credits For Film and TV Production Don’t Pay appeared first on Michael Geist.

Tax Credits for Film and TV Production a Race to the Bottom

Michael Geist Law RSS Feed - Mon, 2015/04/20 - 10:04

Appeared in the Toronto Star on April 18, 2015 as Tax Credits for Film and TV Production a Race to the Bottom

The Nova Scotia government has been embroiled in a high profile controversy for the past week following its decision to slash tax credits available to film and television production in the province. The decision sparked an immediate backlash from the industry, which staged a major protest last Wednesday across from the legislature in Halifax.

While the government’s approach is certainly open to criticism – abruptly cutting the tax credits without warning may force the cancellation of long-planned productions this summer – the larger question of whether it should provide massive tax relief to the film and television industry is an important one. Eliminating or cutting the programs is politically difficult given the star power associated with film and television production, yet a growing number of studies have found that film and television tax credits do not deliver much bang for the buck.

The widespread use of film and television production tax subsidies dates back more than two decades as states and provinces used them to lure productions with the promise of new jobs and increased economic activity. The proliferation of subsidies and tax credits created a race to the bottom, where ever-increasing incentives were required to distinguish one province or state from the other.

In recent years, governments have begun to rethink the strategy. States such as Arizona, Michigan, New Mexico, and Iowa suspended or capped their programs. Louisiana found that it lost $170 million in tax revenue in a single year. In Canada, the Quebec government’s taxation review committee recently admitted that its provincial film production tax credit was not profitable and that numerous studies find that there is little economic spinoff activity.

But the most notable Canadian study on the issue has never been publicly released and is rarely discussed. The Ontario government’s Ministry of Finance conducted a detailed review of the issue in 2011, delivering a sharply negative verdict on the benefits associated with spending hundreds of millions of dollars each year in tax credits. It recommended eliminating a 25 per cent tax credit for foreign and non-certified domestic productions that would have saved $155 million per year.

A copy of the presentation to cabinet, obtained under the Freedom of Information Act, identifies at least four major problems with the provincial film and television tax credit approach.

First, rather than encouraging increased spending, government subsidies represent the majority of financing for film and television production. In 2010, tax credits, grants, and other public funding mechanisms subsidized approximately 60 per cent of all Ontario-based film and television production spending. Moreover, the corporations that claim tax credits pay no tax at all, with the total value of the tax credits being 6 times greater than the total tax income of domestic claimants.

Second, the sector is becoming more dependent on government support. In 1998, film tax credit expenditures constituted six per cent of production costs. Ten years later, there were fewer productions in Ontario, but the film tax credit expenditures were responsible for 30 per cent of the costs.

Third, the mounting government expenditures might be justified if it resulted in the creation of long-term high paying jobs. However, the Ontario government study found that film sector wages were below the provincial average and that many of those jobs were temporary, project-based ones.

Fourth, evidence suggests that other factors beyond tax incentives play a key role in determining the location of production activity. For example, the Ontario experience over the past two decades shows that foreign production is typically highest when the Canadian dollar is low relative to the U.S. dollar.

While the economic evidence to support film and television tax credits is weak, that does not mean that governments should not support the industry since the importance of culture extends beyond dollars and cents. Nova Scotia’s decision may be unpopular with some, but it is likely to be emulated by other governments as they assess how to support the film and television industry in a more economically responsible and effective manner.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can be reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

The post Tax Credits for Film and TV Production a Race to the Bottom appeared first on Michael Geist.

The Error of Fast Tracking the Trans-Pacific Partnership Agreement

Freedom to Tinker - Fri, 2015/04/17 - 15:35
National media reported yesterday that a Congressional agreement has been reached on so-called “fast track” authority for the Trans-Pacific Partnership Agreement (TPP). This international agreement, having been negotiated under extreme secrecy by 12 countries including the United States, Australia, Canada, Japan, Malaysia and Singapore, is supposed to be an “ambitious, next-generation, Asia-Pacific trade agreement that reflects […]

Bitcoin is a game within a game

Freedom to Tinker - Fri, 2015/04/17 - 10:06
In this series on Bitcoin and game theory, I’ve argued that Bitcoin’s stability is fundamentally a game-theoretic proposition and shown how we’ve had blind spots for years in our theoretical understanding of mining strategy. In this post, I’ll get to the question of the discrepancy between theory and practice. As I pointed out, even though […]

Nobody’s Perfect: Leaked Contract Reveals Sony Requires Netflix To Geo-Block But Acknowledges Technology Is Imperfect

Michael Geist Law RSS Feed - Fri, 2015/04/17 - 09:59

The Wikileaks release of tens of thousands of Sony documents includes revelations about opposition to the copyright treaty for the blind, political fundraising, concerns about fair use in treaties, strategies to fund screening rooms in embassies to create a stronger will to protect studio interests, and personal calls to Prime Ministers (UK Prime Minister Cameron in this case) regarding the copyright law. The documents also show that Sony lobbied Netflix to stop Australian users from using VPNs to access the service. Yet it would appear that Sony’s own licence terms with Netflix opens the door to general VPN use.

The documents also include a stunning array of commercial documents, including licensing agreements with broadcasters and online video services around the world. A general search for Canadian documents immediately uncovered parts of the licensing agreement between Sony and Netflix, including the content protection requirements and obligations. Netflix is unsurprisingly requirement to encrypt all programs, use only pre-approved digital rights management systems, and meet various technical requirements.  Of great interest to many Netflix subscribers, particularly those that try to access U.S. Netflix, are the requirements related to geographic filtering. The provision states:

Geofiltering.

3.1    Licensee must utilize an industry standard geolocation service to verify that a Registered User is located in the Territory that must:
3.1.1.    provide geographic location information based on DNS registrations, WHOIS databases and Internet subnet mapping.
3.1.2.    provide geolocation bypass detection technology designed to detect IP addresses located in the Territory, but being used by Registered Users outside the Territory.
3.1.3.    use such geolocation bypass detection technology to detect known web proxies, DNS based proxies, anonymizing services and VPNs which have been created for the primary intent of bypassing geo-restrictions.
3.2.    Licensee shall use such information about Registered User IP addresses as provided by the industry standard geolocation service to prevent access to Included Programs, via the SVOD Service, from Registered Users outside the Territory.
3.3.    Both geolocation data and geolocation bypass data must be updated no less frequently than every two (2) weeks.
3.4.    Licensee agrees to periodically review geofiltering tactics during the Term of this Agreement.
3.5.    Licensor acknowledges that Internet Protocol (IP) based geolocation and geofiltering technologies may in some cases be circumvented by highly proficient and determined individuals or organizations.

The provision confirms several things. First, Hollywood studios are requiring Netflix to use geo-filtering technologies. Those technologies must be regularly updated and try to detect VPN services.  It is notable that detecting VPNs or web proxies that avoid geo-identification are limited to those that “have been created for the primary intent of bypassing geo-restrictions.” That may explain why Netflix would focus on VPN services that market themselves as primarily allowing for access to U.S. Netflix, while not stopping general VPN services that are used for a wide range of purposes, including protecting personal privacy.

Second, the provision does not include other geographic measures, such as credit card confirmation to a specific country (as is used in other Sony agreements). This may reflect the fact that users are entitled to access the service while traveling and may access U.S. Netflix while in the U.S. The service therefore restricts based on where a user is located when accessing the service, not where they reside.

Third, there is a provision that acknowledges that the geolocation technologies can be circumvented by “highly proficient and determined individuals or organizations.” These terms do not appear to be defined, which may create sufficient flexibility to allow Netflix to argue that it meets Sony’s contractual requirements on geo-filtering but that the Hollywood studio itself has acknowledged the imperfections of the technology which can be circumvented.

The post Nobody’s Perfect: Leaked Contract Reveals Sony Requires Netflix To Geo-Block But Acknowledges Technology Is Imperfect appeared first on Michael Geist.

Canada's Copyright Mystique

Sara Bannerman - Wed, 2015/04/15 - 15:14
Two recent law review articles, both responding to the July 2012 release of the Supreme Court of Canada's "pentalogy" of decisions on copyright, take somewhat opposite views of the relationship of the Court's decision to Canadian copyright history.

Professor Ysolde Gendreau of Université de Montréal's law school argues[1] that Canadian copyright law, leading up to the Court's decision, lacked a statement of a broad purpose or philosophy of Canadian copyright.  There was, for example, no statement in the preamble to the Canadian Copyright Act outlining the act's overall purpose.  It also lacked an "historical mystique" that would lend an historical purpose to Canadian copyright, the way that, for example, the storied history of the French authors' rights movement lends understanding to the interpretation of French copyright today.  Given this absence, the Court strode into the void and fashioned for Canadians a purpose that placed users' rights on a similar level with authors' rights in Canadian copyright law--a step that Gendreau believes has "no textual foundation."

Professor Myra Tawfik of the University of Windsor's law school argues[2], on the other hand, that the Court, rather than taking a wrong turn in the absence of clear directional purpose, "demonstrates  a depth of understanding of, and a confidence in, Canada's own particular copyright story"--a story that is very different from those of countries like France, the US, or the UK.  Tawfik argues that the Court now finds itself not in a relative void, but rather in the midst of a fairly developed area of Canadian law: "Canadian copyright law is sufficiently well developed and internally coherent to stand on its own merits."

Both authors note that the literature on the "historical mystique" of Canadian copyright is beginning to appear; they cite my book, The Struggle for Canadian Copyright, Eli McLaren's Dominion and Agency, and Pierre-Emmanuel Moyse's "The Colonies Strike Back" chapter as offering some of the history of Canadian copyright.

In my view, Professor Tawfik's view is correct. The Court's view of the purpose of Canadian copyright law, which places users' rights on a similar footing to those of authors, reflects longstanding concerns in Canadian copyright history with the accessibility of books, their affordability, and also with developing Canadian creative industries and encouraging Canadian creativity.  The developing range of literature on Canadian copyright history reflects this.

 --
1. Gendreau, Ysolde. "Recent Canadian Development: Fair Dealing: Canada Holds to its Position." J. Copyright Soc'y 60 (2013): 673-673.


2. Tawfik, Myra J. "The Supreme Court of Canada and the" Fair Dealing Trilogy": Elaborating a Doctrine of User Rights under Canadian Copyright Law." Alberta L. Rev. 51 (2013): 191-201.

Canada’s Non-Commercial Copyright Fail: Why Did YouTube Mute a Holocaust Memorial Video?

Michael Geist Law RSS Feed - Wed, 2015/04/15 - 10:34

Holocaust Remembrance Day (Yom HaShoah) starts tonight with events planned around the world. Last year, my daughter Jordan participated in the March of the Living, an annual event that brings thousands of people from around the world to the concentration camps in Poland. The experience had a profound effect and since her return she has become increasingly active within the March of the Living organization including joining the Ottawa board of directors. As part of tonight’s Holocaust remembrance event in Ottawa, she was asked to create a video to commemorate last year’s trip including interviews with participants, pictures, and video. She spent hours interviewing 18 participants on their experience and worked through hundreds of photos and hours of video to create a five-minute snapshot.

Last week, she posted the video to YouTube in anticipation of tonight’s event. Within hours, she received a message from the event organizer’s wondering why so few interviews appeared on the video. When she looked into the issue, she found that YouTube had muted the audio track with interviews after a couple of minutes (at 2:14 to be precise). The reason? The video includes some copyrighted background music. YouTube’s approach when it matches audio to a copyrighted work is to mute the non-music track, though it provides an option to fill out a fair dealing/fair use claim. Jordan did that, pointing out that Section 29.21 of the Canadian Copyright Act provides specific protection for non-commercial user generated content.  The provision states:

It is not an infringement of copyright for an individual to use an existing work or other subject-matter or copy of one, which has been published or otherwise made available to the public, in the creation of a new work or other subject-matter in which copyright subsists and for the individual – or, with the individual’s authorization, a member of their household – to use the new work or other subject-matter or to authorize an intermediary to disseminate it, if

(a) the use of, or the authorization to disseminate, the new work or other subject-matter is done solely for non-commercial purposes;
(b) the source – and, if given in the source, the name of the author, performer, maker or broadcaster – of the existing work or other subject-matter or copy of it are mentioned, if it is reasonable in the circumstances to do so;
(c) the individual had reasonable grounds to believe that the existing work or other subject-matter or copy of it, as the case may be, was not infringing copyright; and
(d) the use of, or the authorization to disseminate, the new work or other subject-matter does not have a substantial adverse effect, financial or otherwise, on the exploitation or potential exploitation of the existing work or other subject-matter – or copy of it – or on an existing or potential market for it, including that the new work or other subject-matter is not a substitute for the existing one.

As of this morning, YouTube had not reinserted the audio track and Jordan spent many more hours creating a new version with different music.

The March of the Living video is precisely the kind of work that this provision is designed to cover: a non-commercial work with no substantial adverse effect on the work incorporated into the user-generated content. Yet more than two years after the provision took effect, YouTube and other online video providers have not adjusted their services to account for the Canadian law. In fact, a review of online video and social media sites finds that no one seems to account for the law within their terms and conditions or stated copyright policy.

During the copyright reform process, the non-commercial user generated content provision was cited as an innovative, “made-in-Canada” rule that provides legal protection for new creative works and the websites that host them.  During committee hearings, Google said:

Bill C-11′s protections for non-commercial, user-generated content will be important to creative communities in Canada. They allow creators to continue to confidently share their creations online with the world, and help foster the next generation of commercial successes.

Government MPs lauded the provision:

This exception recognizes that these new uses of creative content contribute to Canada’s cultural sector. For example, these uses can enhance interest in the original when videos of user-generated content go viral on the Internet. This innovative form of creation can also shed light on emerging talent from across our country and showcase it to the rest of the world. Of course the digital age does not just offer opportunities for creation; it also offers many unique opportunities for learning and education.

The decision by online video providers and social media sites to largely ignore the provision means lawful Canadian works will be muted or taken down contrary to the policy established by the government. There is no reason that online video providers can’t incorporate Canadian law into their service for their Canadian users by asking for affirmation that the work conforms to the provision upon posting (thereby creating a default that the work is lawful) or by creating a response mechanism that is consistent with user rights protections contained in Canadian copyright law.

The post Canada’s Non-Commercial Copyright Fail: Why Did YouTube Mute a Holocaust Memorial Video? appeared first on Michael Geist.

Decertifying the worst voting machine in the US

Freedom to Tinker - Wed, 2015/04/15 - 09:26
On Apr 14 2015, the Virginia State Board of Elections immediately decertified use of the AVS WinVote touchscreen Direct Recording Electronic (DRE) voting machine. This seems pretty minor, but it received a tremendous amount of pushback from some local election officials. In this post, I’ll explain how we got to that point, and what the […]
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