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The Trouble With the TPP, Day 48: U.S. Reserves Right to “Certify” Canada’s TPP Implementation

Michael Geist Law RSS Feed - Thu, 2016/03/10 - 10:20

The Trouble with the TPP series has focused on dozens of problematic provisions within the trade agreement and identified several implementation possibilities that might limit some of the harm. For example, the post on copyright term extension discussed how Canada could require copyright registration and notification of the extended term in order to qualify for further protection. Copyright registration would not eliminate all the harm to the public domain, but it would mean that only those that desire the extension would take the positive steps to get it, thereby reducing the costs of the TPP’s unnecessary copyright term extension.

Should Canada move toward ratification of the TPP, there is a concern that attempts to mitigate the harm of some provisions will face opposition from the U.S. While implementation flexibility is the goal of every negotiator, the U.S. reserves the right to “certify” whether other TPP countries have, in its view, properly implemented the agreement.

The certification process is not found in the TPP, yet it is a part of how the U.S. approaches trade agreements. Before any free trade agreement takes effect, the applicable U.S. legislation includes a provision requiring the President to determine whether the agreement’s partner(s) have taken measures to bring it into compliance with the deal. The certification process includes reviews from multiple U.S. agencies, including the USTR, State, Commerce, Agriculture, and Treasury.  If the President does not certify the other countries, the agreement does not take effect.

U.S. companies have already begun calls for an aggressive TPP certification process. For example, earlier this month Qualcomm appeared before a U.S. Senate committee hearing, stating:

Before a trade agreement with the United States can enter-into-force, the President must determine that the trading partner has taken the necessary steps for implementation of all obligations that are to take effect on day one of the Agreement. I cannot emphasize enough how critical this certification process is to ensuring that a trading partner has the necessary laws and regulations in place to implement its obligations before an Agreement enters into force. It is during this certification process when our ability to secure any necessary protections in our trading partners’ laws, consistent with the Agreement, is at its greatest. Certification may be the best opportunity the United States has to ensure that trading partners have taken all necessary domestic steps to implement and abide by their commitments.

Qualcomm continued by urging officials to create a “pre-certification checklist”.

How would the U.S. enforce its certification process?

As further discussed in tomorrow’s post, the TPP cannot take effect without U.S. ratification. The U.S. plans to withhold ratification until it is satisfied that the other TPP countries meet its certification requirements. The U.S. approach effectively grants it an additional opportunity to shape the TPP by establishing its own requirements on implementation and forcing others to abide by its interpretation of otherwise flexible provisions.

(prior posts in the series include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection, Day 9: Limits on Medical Devices and Pharma Data Collection, Day 10: Criminalization of Trade Secret Law, Day 11: Weak Privacy Standards, Day 12: Restrictions on Data Localization Requirements, Day 13: Ban on Data Transfer Restrictions, Day 14: No U.S. Assurances for Canada on Privacy, Day 15: Weak Anti-Spam Law Standards, Day 16: Intervening in Internet Governance, Day 17: Weak E-commerce Rules, Day 18: Failure to Protect Canadian Cultural Policy, Day 19: No Canadian Side Agreement to Advance Tech Sector, Day 20: Unenforceable Net Neutrality Rules, Day 21: U.S. Requires Canadian Anti-Counterfeiting Report Card, Day 22: Expanding Border Measures Without Court Oversight, Day 23: On Signing Day, What Comes Next?, Day 24: Missing Balance on IP Border Measures, Day 25: The Treaties With the Treaty, Day 26: Why It Limits Canadian Cultural Policies, Day 27: Source Code Disclosure Confusion, Day 28: Privacy Risks from Source Code Rules, Day 29: Cultural Policy Innovation Uncertainty, Day 30: Losing Our Way on Geographical Indications, Day 31: Canadian Trademark Law Overhaul, Day 32: Illusory Safeguards Against Encryption Backdoors, Day 33: Setting the Rules for a Future Pharmacare Program, Day 34: PMO Was Advised Canada at a Negotiating Disadvantage, Day 35: Gambling With Provincial Regulation, Day 36: Why the TPP Could Restrict Uber Regulation, Day 37: Breaking Digital Locks for Personal Purposes, Day 38: Limits on Canadian Digital Lock Safeguards, Day 39: Quiet Expansion of Criminal Copyright Provisions, Day 40: Mobile Roaming Promises Unfulfilled, Day 41: ISDS Rules Do Not Meet the Canada’s New “Gold” Standard, Day 42: The Risks of Investor-State Dispute Settlement, Day 43: Eli Lilly Is What Happens When ISDS Rules Go Wrong, Day 44: Canada’s Terrible ISDS Track Record, Day 45: Limited Economic Gains for Canada, Day 46: Limited Employment Gains or Even Job Losses for Canada, Day 47: Hits and Misses in the Agricultural Sector)

The post The Trouble With the TPP, Day 48: U.S. Reserves Right to “Certify” Canada’s TPP Implementation appeared first on Michael Geist.

Apple, FBI, and Software Transparency

Freedom to Tinker - Thu, 2016/03/10 - 09:00
The Apple versus FBI showdown has quickly become a crucial flashpoint of the “new Crypto War.” On February 16 the FBI invoked the All Writs Act of 1789, a catch-all authority for assistance of law enforcement, demanding that Apple create a custom version of its iOS to help the FBI decrypt an iPhone used by one of the San […]

The Trouble With the TPP, Day 47: Hits and Misses in the Agricultural Sector

Michael Geist Law RSS Feed - Wed, 2016/03/09 - 10:06

If the Trouble with the TPP is that it is unlikely to generate significant economic growth or create many new jobs (some studies predict job losses), where are the benefits? The agricultural sector is often pointed to as a likely winner with the expectation that more open markets will result in Canadian farmers selling more beef, pork, canola, and other products. Those predictions may prove true, but based on what the Standing Committee on International Trade has heard, there are many other agricultural sectors that stand to lose as a result of the deal.

The dairy industry is the most obvious sector that projects losses in the billions of dollars. Indeed, the Conservative government promised billions of taxpayer dollars as compensation for those losses. When the dairy industry appeared before the committee, it made it clear that it expects the Liberal government to honour the same payout, arguing that the compensation – which amounts to $150,000 per dairy farmer – is part of the agreement (even if not actually part of the TPP text).

In fact, the compensation extends to other supply managed sectors such as the chicken industry, which is also projecting losses due to the TPP (and CETA). In all, these various sectors expect $2.4 billion from an income guarantee program, $1.5 billion from quota-value guarantee program, $450 million for a processor modernization program, and $15 million for a market development initiative.

In other sectors, the impact of the TPP is modest at best. For example, the Canadian Vintners’ Association appeared before the committee to discuss the impact on the Canadian wine industry. With low tariffs already in place in several TPP countries, the impact will be modest unless Vietnam suddenly starts drinking a lot of Canadian wine. According to the CVA, the more important issue, which is not solved by the TPP, are domestic restrictions that limit sales of wine between provinces:

we’re working with one hand behind our back, actually two hands behind our back because we don’t have free trade within our own country. We can only ship wine – British Columbia, Manitoba and Nova Scotia are the only three provinces that have opened up their borders since the unanimous bill passed in the House of Commons and approved in the Senate in 2012. If we had those types of things in place, we can grow our domestic market and therefore take advantage of these agreements. With reduction in tariffs, New Zealand and Australia will continue to grow their market share here, and if we can’t compete, we won’t benefit domestically and we won’t benefit from the TPP.

In fact, the CVA noted that the U.S. opened up the wine market between states, which resulted in many smaller wineries increasing their domestic “exports”, thereby preparing them for a global market. Since that has not happened in Canada, even the CVA acknowledges that most Canadian wine producers are not ready to take advantage of the TPP.

(prior posts in the series include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection, Day 9: Limits on Medical Devices and Pharma Data Collection, Day 10: Criminalization of Trade Secret Law, Day 11: Weak Privacy Standards, Day 12: Restrictions on Data Localization Requirements, Day 13: Ban on Data Transfer Restrictions, Day 14: No U.S. Assurances for Canada on Privacy, Day 15: Weak Anti-Spam Law Standards, Day 16: Intervening in Internet Governance, Day 17: Weak E-commerce Rules, Day 18: Failure to Protect Canadian Cultural Policy, Day 19: No Canadian Side Agreement to Advance Tech Sector, Day 20: Unenforceable Net Neutrality Rules, Day 21: U.S. Requires Canadian Anti-Counterfeiting Report Card, Day 22: Expanding Border Measures Without Court Oversight, Day 23: On Signing Day, What Comes Next?, Day 24: Missing Balance on IP Border Measures, Day 25: The Treaties With the Treaty, Day 26: Why It Limits Canadian Cultural Policies, Day 27: Source Code Disclosure Confusion, Day 28: Privacy Risks from Source Code Rules, Day 29: Cultural Policy Innovation Uncertainty, Day 30: Losing Our Way on Geographical Indications, Day 31: Canadian Trademark Law Overhaul, Day 32: Illusory Safeguards Against Encryption Backdoors, Day 33: Setting the Rules for a Future Pharmacare Program, Day 34: PMO Was Advised Canada at a Negotiating Disadvantage, Day 35: Gambling With Provincial Regulation, Day 36: Why the TPP Could Restrict Uber Regulation, Day 37: Breaking Digital Locks for Personal Purposes, Day 38: Limits on Canadian Digital Lock Safeguards, Day 39: Quiet Expansion of Criminal Copyright Provisions, Day 40: Mobile Roaming Promises Unfulfilled, Day 41: ISDS Rules Do Not Meet the Canada’s New “Gold” Standard, Day 42: The Risks of Investor-State Dispute Settlement, Day 43: Eli Lilly Is What Happens When ISDS Rules Go Wrong, Day 44: Canada’s Terrible ISDS Track Record, Day 45: Limited Economic Gains for Canada, Day 46: Limited Employment Gains or Even Job Losses for Canada)

The post The Trouble With the TPP, Day 47: Hits and Misses in the Agricultural Sector appeared first on Michael Geist.

The Trouble With the TPP, Day 46: Limited Employment Gains or Even Job Losses for Canada

Michael Geist Law RSS Feed - Tue, 2016/03/08 - 10:02

Yesterday’s Trouble with the TPP post canvassed the economic studies released to date on the agreement, finding that the evidence suggests that the economic gains for Canada are modest at best. In addition to efforts to assess the economic growth impact of the TPP, some studies have also tried to estimate its effect on employment.

The Tufts University study referenced yesterday has a specific analysis on job growth. It anticipates that Canada will lose jobs as a result of the TPP, projecting a loss of 58,000 jobs in Canada. That ranks the third highest in the TPP, but the highest of all countries on a per capita basis.

Unifor, the union which represents Canadian auto workers at the big three, estimates that the TPP will place 20,000 automotive jobs at riskNot everyone agrees with that estimate, but other studies have concluded that recent Canadian free trade agreements are leading to lost automotive jobs. Unifor is scheduled to appear before the Standing Committee on International Trade today alongside Ford Canada, which has also criticized the TPP.

In fact, when even the Peterson Institute study, which is currently the most optimistic about the TPP, projects no job growth from the agreement (it argues that the agreement will create job churn in the U.S. and impose adjustment costs on some workers), politicians should be paying attention to concerns that the TPP will create significant costs but do little if anything to spur job growth in Canada.

(prior posts in the series include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection, Day 9: Limits on Medical Devices and Pharma Data Collection, Day 10: Criminalization of Trade Secret Law, Day 11: Weak Privacy Standards, Day 12: Restrictions on Data Localization Requirements, Day 13: Ban on Data Transfer Restrictions, Day 14: No U.S. Assurances for Canada on Privacy, Day 15: Weak Anti-Spam Law Standards, Day 16: Intervening in Internet Governance, Day 17: Weak E-commerce Rules, Day 18: Failure to Protect Canadian Cultural Policy, Day 19: No Canadian Side Agreement to Advance Tech Sector, Day 20: Unenforceable Net Neutrality Rules, Day 21: U.S. Requires Canadian Anti-Counterfeiting Report Card, Day 22: Expanding Border Measures Without Court Oversight, Day 23: On Signing Day, What Comes Next?, Day 24: Missing Balance on IP Border Measures, Day 25: The Treaties With the Treaty, Day 26: Why It Limits Canadian Cultural Policies, Day 27: Source Code Disclosure Confusion, Day 28: Privacy Risks from Source Code Rules, Day 29: Cultural Policy Innovation Uncertainty, Day 30: Losing Our Way on Geographical Indications, Day 31: Canadian Trademark Law Overhaul, Day 32: Illusory Safeguards Against Encryption Backdoors, Day 33: Setting the Rules for a Future Pharmacare Program, Day 34: PMO Was Advised Canada at a Negotiating Disadvantage, Day 35: Gambling With Provincial Regulation, Day 36: Why the TPP Could Restrict Uber Regulation, Day 37: Breaking Digital Locks for Personal Purposes, Day 38: Limits on Canadian Digital Lock Safeguards, Day 39: Quiet Expansion of Criminal Copyright Provisions, Day 40: Mobile Roaming Promises Unfulfilled, Day 41: ISDS Rules Do Not Meet the Canada’s New “Gold” Standard, Day 42: The Risks of Investor-State Dispute Settlement, Day 43: Eli Lilly Is What Happens When ISDS Rules Go Wrong, Day 44: Canada’s Terrible ISDS Track Record, Day 45: Limited Economic Gains for Canada)

The post The Trouble With the TPP, Day 46: Limited Employment Gains or Even Job Losses for Canada appeared first on Michael Geist.

The Trouble With the TPP, Day 45: Limited Economic Gains for Canada

Michael Geist Law RSS Feed - Mon, 2016/03/07 - 11:50

The Trouble with the TPP series has spent the past two months examining dozens of provisions in the agreement and their implications for Canadians and Canadian law. Yet beyond the new restrictions, missed opportunities, and business uncertainty, lies real doubt about the actual gains from the TPP. While certain groups were prepared to support the TPP sight unseen, the evidence continues to mount that there are very limited Canadian benefits from the deal. The next few days will consider the economic and employment implications of the TPP.

At a recent Standing Committee on International Trade hearing on the TPP, Brian Kingston, a Vice-President with the Business Council of Canada (formerly the Canadian Council of Chief Executives) was asked if there were any negatives about the deal. Incredibly, Kingston responded that he could not think of any, a position that was rebutted in the next hearing as agricultural groups talked about billions in losses. Further, Kingston was also asked about studies on the TPP. He indicated that the main study he had seen was from the Peterson Institute.

The Peterson Institute study is the most pro-TPP study released to date, yet even it projects only modest gains for Canada. For Canada, the gain by 2025 is estimated at 0.9 percent, one of the weakest gains among TPP countries. That places the estimate $22 billion in growth, which is not insignificant, but still relatively small given the size of the Canadian economy. But even those projections are open to doubt as critics argue that the study uses a faulty economic model and assumes untrue facts.

The Peterson Institute study paints the rosiest picture of TPP benefits for Canada. Dan Ciuriak, the former deputy chief economist at Foreign Affairs and International Trade Canada, has estimated the net gain at only 0.1 percent of GDP by 2035 or $2.7 billion. In a forthcoming study, Ciuriak’s numbers are even lower for Canada’s GDP growth due to the TPP. Ciuriak wrote in the Globe and Mail this weekend that “if there was ever an agreement destined to confirm the law of unintended consequences, it’s probably the TPP, by virtue of its overweening ambition and its flawed process.”

Those low numbers are echoed in a study from Tufts University that finds similar weak growth for Canada from the TPP.  That study estimates growth in ten years for Canada of 0.28 percent, third lowest in the TPP and virtually insignificant in terms of decade-long economic growth. Another study on the TPP’s economic impact, this one from the World Bank, ranks Canada as likely to  have some of the lowest growth rates from the deal among TPP countries.

In fact, some of these studies may understate the negative broader economic impact of the TPP. For example, the New Zealand government has conducted studies on the economic losses that will accrue due to intellectual property reforms such as copyright term extension and pharmaceutical protections.  For New Zealand alone, the costs run in the tens of millions of dollars for copyright. If those numbers are replicated in countries like Canada and Japan (which are also required to extend the term of copyright under the TPP), the price tag could run into the hundreds of millions of dollars.

There is certainly need for more study (and I am happy to post links to other reports), but the analysis to date suggests very limited economic gains for Canada in the TPP. That may be unsurprising given that Canada already has trade deals with nearly half of the TPP, but it should leave the government wondering whether all the costs and regulatory upheaval are worth the effort.

(prior posts in the series include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection, Day 9: Limits on Medical Devices and Pharma Data Collection, Day 10: Criminalization of Trade Secret Law, Day 11: Weak Privacy Standards, Day 12: Restrictions on Data Localization Requirements, Day 13: Ban on Data Transfer Restrictions, Day 14: No U.S. Assurances for Canada on Privacy, Day 15: Weak Anti-Spam Law Standards, Day 16: Intervening in Internet Governance, Day 17: Weak E-commerce Rules, Day 18: Failure to Protect Canadian Cultural Policy, Day 19: No Canadian Side Agreement to Advance Tech Sector, Day 20: Unenforceable Net Neutrality Rules, Day 21: U.S. Requires Canadian Anti-Counterfeiting Report Card, Day 22: Expanding Border Measures Without Court Oversight, Day 23: On Signing Day, What Comes Next?, Day 24: Missing Balance on IP Border Measures, Day 25: The Treaties With the Treaty, Day 26: Why It Limits Canadian Cultural Policies, Day 27: Source Code Disclosure Confusion, Day 28: Privacy Risks from Source Code Rules, Day 29: Cultural Policy Innovation Uncertainty, Day 30: Losing Our Way on Geographical Indications, Day 31: Canadian Trademark Law Overhaul, Day 32: Illusory Safeguards Against Encryption Backdoors, Day 33: Setting the Rules for a Future Pharmacare Program, Day 34: PMO Was Advised Canada at a Negotiating Disadvantage, Day 35: Gambling With Provincial Regulation, Day 36: Why the TPP Could Restrict Uber Regulation, Day 37: Breaking Digital Locks for Personal Purposes, Day 38: Limits on Canadian Digital Lock Safeguards, Day 39: Quiet Expansion of Criminal Copyright Provisions, Day 40: Mobile Roaming Promises Unfulfilled, Day 41: ISDS Rules Do Not Meet the Canada’s New “Gold” Standard, Day 42: The Risks of Investor-State Dispute Settlement, Day 43: Eli Lilly Is What Happens When ISDS Rules Go Wrong, Day 44: Canada’s Terrible ISDS Track Record)

The post The Trouble With the TPP, Day 45: Limited Economic Gains for Canada appeared first on Michael Geist.

Giving Pick-and-Pay a Chance: Why Skinny Basic Is Just the Start of More Competitive TV Pricing

Michael Geist Law RSS Feed - Mon, 2016/03/07 - 10:36

Canadians appear to have become so accustomed to an uncompetitive cable and satellite market typified by frequent price increases and restrictive options that many are failing to recognize the arrival of greater consumer choice. Last week’s launch of the new $25 basic “skinny” cable packages mandated by the Canadian Radio-television and Telecommunications Commission (CRTC) left many underwhelmed, as the patchwork of channels and hidden fees seemingly confirmed critics’ claims that consumers would be better off sticking with their existing, pricier packages.

My weekly technology law column (Toronto Star version, homepage version) acknowledges that there is plenty of room to criticize the cable and satellite companies. They have no intention of actively promoting the cheaper options and some seem determined to make them as unattractive as possible. However, the reality is that the combination of basic television service and the pick-and-pay model that must be offered by the end of the year is changing the marketplace for the better.

Start with the new cable and satellite basic packages, which differ significantly between companies. Cable companies such as Rogers and Shaw offer both Canadian and U.S. channels in their basic packages, making them viable choices for those looking for limited service that can be supplemented with streaming options such as Netflix. Bell, on the other hand, has loaded its package with French-language channels and none of the popular U.S. channels, thereby ensuring that there will be few takers among English-speaking households. Consumers looking for a cheaper option have a real (and obvious) choice.

Yet focusing solely on the value of a basic package misses most of the story.

First, the arrival of the basic package has sparked a re-examination of television packages more broadly, with the companies tweaking their more expensive alternatives to make them more attractive. For consumers who were thinking of cutting the cord, the changes may be just enough to stick with conventional cable or satellite services for now.

Second, the emergence of some product differentiation on even basic services should spark greater consumer willingness to shop around. Television services have long been exceptionally difficult for consumers to compare given the wide variability in packages and prices. The new CRTC requirements establish a level playing field, enabling consumers to finally make apples-to-apples comparisons among similarly priced basic packages as well as assessing the incremental costs of adding more channels or specialized services.

Third, the biggest benefits of the new system will come later this year when the full pick-and-pay requirements kick-in. Critics warn that consumers will be shocked by the high prices of some channels. However, early indications suggest that consumers interested in combining a basic service with some additional sports, news, or family-oriented channels will save hundreds of dollars a year when compared to bigger packages. Those larger packages obviously offer access to far more channels, but many consumers may place a very low value on channels they have never bothered to watch.

In fact, the choice is not limited to cable packages or pick-and-pay options. With numerous streaming alternatives, a growing number of consumers will rely on Netflix (or Shomi or CraveTV) for much of their entertainment programming and some may turn to sports streaming subscriptions directly from the leagues.

While not every company will offer an identical package, the CRTC’s mandated requirements have finally cracked open the door to competition and comparison shopping for television services. The new market will still take some time to unfold, but the benefits are likely to be felt by all consumers, whether content with basic services or willing to pay for access to hundreds of channels.

The post Giving Pick-and-Pay a Chance: Why Skinny Basic Is Just the Start of More Competitive TV Pricing appeared first on Michael Geist.

Why Skinny Basic Is Just the Start of More Competitive TV Pricing

Michael Geist Law RSS Feed - Mon, 2016/03/07 - 10:29

Appeared in the Toronto Star on March 7, 2016 as Skinny TV Packages Jump Start Competition

Canadians appear to have become so accustomed to an uncompetitive cable and satellite market typified by frequent price increases and restrictive options that many are failing to recognize the arrival of greater consumer choice. Last week’s launch of the new $25 basic “skinny” cable packages mandated by the Canadian Radio-television and Telecommunications Commission (CRTC) left many underwhelmed, as the patchwork of channels and hidden fees seemingly confirmed critics’ claims that consumers would be better off sticking with their existing, pricier packages.

There is plenty of room to criticize the cable and satellite companies. They have no intention of actively promoting the cheaper options and some seem determined to make them as unattractive as possible. However, the reality is that the combination of basic television service and the pick-and-pay model that must be offered by the end of the year is changing the marketplace for the better.

Start with the new cable and satellite basic packages, which differ significantly between companies. Cable companies such as Rogers and Shaw offer both Canadian and U.S. channels in their basic packages, making them viable choices for those looking for limited service that can be supplemented with streaming options such as Netflix. Bell, on the other hand, has loaded its package with French-language channels and none of the popular U.S. channels, thereby ensuring that there will be few takers among English-speaking households. Consumers looking for a cheaper option have a real (and obvious) choice.

Yet focusing solely on the value of a basic package misses most of the story.

First, the arrival of the basic package has sparked a re-examination of television packages more broadly, with the companies tweaking their more expensive alternatives to make them more attractive. For consumers who were thinking of cutting the cord, the changes may be just enough to stick with conventional cable or satellite services for now.

Second, the emergence of some product differentiation on even basic services should spark greater consumer willingness to shop around. Television services have long been exceptionally difficult for consumers to compare given the wide variability in packages and prices. The new CRTC requirements establish a level playing field, enabling consumers to finally make apples-to-apples comparisons among similarly priced basic packages as well as assessing the incremental costs of adding more channels or specialized services.

Third, the biggest benefits of the new system will come later this year when the full pick-and-pay requirements kick-in. Critics warn that consumers will be shocked by the high prices of some channels. However, early indications suggest that consumers interested in combining a basic service with some additional sports, news, or family-oriented channels will save hundreds of dollars a year when compared to bigger packages. Those larger packages obviously offer access to far more channels, but many consumers may place a very low value on channels they have never bothered to watch.

In fact, the choice is not limited to cable packages or pick-and-pay options. With numerous streaming alternatives, a growing number of consumers will rely on Netflix (or Shomi or CraveTV) for much of their entertainment programming and some may turn to sports streaming subscriptions directly from the leagues.

While not every company will offer an identical package, the CRTC’s mandated requirements have finally cracked open the door to competition and comparison shopping for television services. The new market will still take some time to unfold, but the benefits are likely to be felt by all consumers, whether content with basic services or willing to pay for access to hundreds of channels.

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 Why Skinny Basic Is Just the Start of More Competitive TV Pricing appeared first on Michael Geist.

Apple/FBI: Freedom of speech vs. compulsion to sign

Freedom to Tinker - Fri, 2016/03/04 - 10:00
This week I signed the Electronic Frontier Foundation’s amicus (friend-of-the-court) brief in the Apple/FBI  iPhone-unlocking lawsuit.  Many prominent computer scientists and cryptographers signed: Josh Aas, Hal Abelson, Judy Anderson, Andrew Appel, Tom Ball (the Google one, not the Microsoft one), Boaz Barak, Brian Behlendorf, Rich Belgard, Dan Bernstein, Matt Bishop, Josh Bloch, Fred Brooks, Mark Davis, […]

What Your ISP (Probably) Knows About You

Freedom to Tinker - Fri, 2016/03/04 - 02:27
Earlier this week, I came across a working paper from Professor Peter Swire—a highly respected attorney, professor, and policy expert.  Swire’s paper, entitled “Online Privacy and ISPs“, argues that ISPs have limited capability to monitor users’ online activity. The paper argues that ISPs have limited visibility into users’ online activity for three reasons:  (1) users […]

omitting facts, ignoring logic

Fair Duty by Meera Nair - Thu, 2016/03/03 - 23:18

Yesterday John Degen (poet, novelist and executive director of The Writers’ Union of Canada) presented his views concerning copyright and education via The Hill Times. The publication is behind a paywall, making it less than easy to acquire, read, or rebut. But if one is trying to lobby Parliament, the venue of publication is appropriate.

Degen is entitled to his opinions, but does readers a disservice by the distortion of history he presented. There might have been reasonable entertainment value from the diatribe, had the issue not involved the intellectual property rights of generations to come. Our parliamentarians could be forgiven for initially thinking that the copyright amendments of 2012 jettisoned the entirety of Section 3.1 (rights of copyright owners), exclusively to the benefit of teachers and students.

But may we assume that any Member of Parliament, in the face of such a hysterical outburst, as opposed to considered judgments from the Supreme Court of Canada, will investigate the rights and wrongs of the matter? That investigation would lead to the following facts:

  • Copyright is a system of limited rights, whereby the limits ensure balance is struck between the rights of copyright owners and rights of copyright users.
  • Fair dealing is one means by which limits are exercised; fair dealing is not piracy.
  • Fair dealing allows for some unauthorized uses of copyrighted material, subject to a fairness analysis.
  • That analysis was shaped by the Supreme Court of Canada in 2004; the justices have since walked-the-walk on multiple occasions.
  • In 2012, the range of fair dealing was expanded from only the options of private study and research, to include education, parody and satire.
  • Every Supreme Court decision supporting fair dealing occurred before the 2012 amendments took effect. Meaning, the inclusion of education was superfluous to establishing balance between owners’ rights and users’ rights.
  • Educational institutions make significant payments for purchased or licensed materials; the difference now is that such payments tend to flow directly to copyright owners and not to a middle-man collective entity such as Access Copyright.
  • Perfunctory announcements of declines in author’s incomes are, no more than perfunctory! One has to look at the larger context of any situation. A favorite report pointed to by The Writers’ Union (and Access Copyright) is a creation by PricewaterhouseCoopers which paints a dire picture of declining income to the educational textbook industry, with the seeming conclusion of an impending loss of quality educational content. However, the analysis within the report omits such basic details as the advent of quality content via open education resources and the global economic mayhem which began in 2008 and ensured individuals/institutions had less dollars to spend for years thereafter. Details are here.
  • The process of setting tariffs by the Copyright Board is complex, and educational institutions themselves are puzzled at the lack of involvement by national representatives. But to attribute a spiteful motive to Canadian education as a whole is hardly worthy of anyone who claims to be a standard bearer for the preservation of Canadian culture.

Some weeks ago Degen’s colleague Heather Menzies also presented her interpretation of history with respect to educational uses of copyrighted material; my rebuttal is here. It appears that the Writers’ Union of Canada is eager to wrap copyright in the maple leaf and hope that Canadians will overlook the absence of facts or logic.

 


fair use denied — part V

Fair Duty by Meera Nair - Fri, 2016/02/26 - 10:16

The conclusion to fair use denied (otherwise known as when wildest dreams collide with the creative process). For earlier installments see Part I, Part II,  Part III, and Part IV.

V. factor four and some last words

(4) The effect of the use upon the potential market for or value of the copyrighted work.

In the later twentieth century, this factor was deemed the most important element of a fairness analysis, with the peculiar logic that if a work could have been licensed, then it should have been licensed. A case which facilitated this avenue of thought is American Geophysical v. Texaco, whereby copying journal articles for the purpose of research was deemed infringement.[1] At appeal, the Court of Appeals for the Second Circuit affirmed the district court decision and emphasized that the presence of a means of licensing was reason to deny fair use.[2] As the Second Circuit represents the geographic region of New York, which is home to the core of American publishing, the decision carried further weight.

It is fitting then, that for nearly ten years, the Second Circuit has been instrumental in supporting a more nuanced interpretation of fair use. For instance, in Bill Graham Archives v. Dorling-Kindersley (2006) the Court showed a conspicuous disinterest in adding to licensing revenue even when mechanisms of licensing existed:

“It is indisputable that, as a general matter, a copyright holder is entitled to demand a royalty for licensing others to use its copyrighted work, and that the impact on potential licensing revenues is a proper subject for consideration in assessing the fourth factor.” (citations omitted). We have noted, however, that “were a court automatically to conclude in every case that potential licensing revenues were impermissibly impaired simply because the secondary user did not pay a fee for the right to engage in the use, the fourth fair use factor would always favor the copyright holder,” (citations omitted). …  Accordingly, we do not find a harm to BGA’s license market merely because DK did not pay a fee for BGA’s copyrighted images. [3]

In Authors Guild, Inc. v. HathiTrust (2013), the Court was emphatic that market impact was very precisely defined: “…  it is important to recall that the Factor Four analysis is concerned with only one type of economic injury to a copyright holder: the harm that results because the secondary use serves as a substitute for the original work….”[4]  More recently in Author’s Guild v. Google, Inc. (2015) which entailed unauthorized displays of snippets of copyrighted works, the Court sought to evaluate market harm by asking if the copying is: “done in a manner that results in widespread revelation of sufficiently significant portions of the original as to make available a significantly competing substitute (p.34).”[5]

Returning to the current situation, the excerpt used in this instance of play could not serve as a meaningful substitute for the song as a whole. If a complainant was to take the view that sanctioning the reproduction of snippets of works creates the conditions whereby an entire song could be assembled, I am happy to concede this point. Yes, it is theoretically possible. However, it would require a fair amount of serendipity—that a sufficient number of creators all favoured Wildest Dreams and have managed, between the group, to capture the entire 235 seconds of the song through independently chosen snippets. Yet even if such an extraordinary accumulation of creative instinct bore this fruit, it remains that the song as a whole is already sanctioned for enjoyment through vevo.com, making the assembly from snippets wholly unnecessary.

To be clear, using this snippet of Wildest Dreams, has no effect upon the market for Wildest Dreams. And having carried out the four-factor analysis, as required by American statutory law, the use of the snippet of Wildest Dreams in the playful manner described is consistent with fair use.

Last words

While the historical foundation and current structure of American copyright aims to secure the right to copy, neither constitutional imperative nor statutory language has deemed copyright a means of absolute control. It seems fitting then, to return to a cogent reminder offered by Fred von Lohmann in 2008: “Copyright law strives to strike a balance between creating adequate (not maximal) incentives for the creation and distribution of expressive works, while also ensuring widespread public access to and enjoyment of such works.”[6]

As stated at the outset, the degree to which Taylor Swift may, or may not, have any influence over the management of copyright in the production of songs that she performs, is unknown. But as a performer that prizes dialogue with her fans, perhaps Swift might consider using her influence to modify enforcement of copyright, to at least comply with the directive of the Ninth Circuit that fair use must be given consideration before the issuance of a takedown/strike notice.

Quite apart from observing the law, such consideration would help safeguard a realm of play that is necessary to bring forth future generations of song writers, musicians, artists, directors and performers. Something that, we can only hope, Swift would support.

 

Notes

[1] In 1978, publishers in the United States formed the Copyright Clearance Center and began marketing licenses for photocopy reproduction in workplace settings. Lawsuits followed shortly thereafter; “Regular reward notices began appearing in periodicals, offering monetary compensation to those who could furnish conclusive evidence of unauthorized copying. In 1985, numerous CCC-member scientific and technical journal publishers sued Texaco, a company that purchased a CCC photocopy license but, according to the CCC, had failed to accurately report the extent of its photocopying.” See Nicole B. Cásarez, Deconstructing the Fair Use Doctrine: The Cost of Personal and Workplace Copying after American Geophysical Union v. Texaco, Inc. (1996) 6 (2) Fordham Intell. Prop. Media & Ent. L.J. 640 at 644.

[2] “Despite Texaco’s claims to the contrary, it is not unsound to conclude that the right to seek payment for a particular use tends to become legally cognizable under the fourth fair use factor when the means for paying for such a use is made easier;” see American Geophysical Union v. Texaco, Inc., 60 F.3d 913 (2d Cir. 1994) at 931-32.  Rather than attempt further appeal, Texaco opted to settle; as a consequence, the licensing regime instituted by the Copyright Clearance Center of the United States was aggressively promoted; see Cásarez above note 1, at 649.

[3] Bill Graham Archives v. Dorling-Kindersley (2006), 448 F.3d 605 (2d Circ.2006),

[4] Authors Guild, Inc. v. HathiTrust 755 F.3d at 97.

[5] Author’s Guild v. Google, Inc., No. 13-4829 (2d Cir. 2015)

[6] Fred von Lohmann, “Fair Use as Innovation Policy,” 2008 Berkeley Technology Law Journal 23 (2) 1 at 10.


fair use denied — part IV

Fair Duty by Meera Nair - Thu, 2016/02/25 - 10:25

A copyright strike, a brief history of fair use, and the creative process; see Part I, Part II, and Part III.

IV. factors one, two and three of fair use

(1) The purpose and character of the use.

American commentary regarding the purpose of use tends to dwell upon the language of “tranformative”.[1] Entering fair use dialogue in 1994 via the Supreme Court decision Campbell v. Acuff-Rose, Inc., “transformative” was defined as “altering the original with new expression, meaning, or message.”[2] The scope of the definition has grown; now one may also probe whether the copy “served a different function from the original.”[3]

But the situation at hand does not lend itself to a claim of transformative. The use of the copy was for the same function as the original: the enjoyment of listening to the music. AL (despite being a budding filmmaker) did not have any pretensions to greater utility or message when she chose to include music with her conversation.

Fortunately, the lack of a transformative quality does not diminish the fairness of the purpose of this use. To engage in play is worthy of protection under fair use. If adults are to properly utilize the system of copyright to achieve its Constitutional imperative of “promoting the progress of science and the useful arts,” as detailed in Part III (of play and progress), it is vital to foster the spirit of play in our youth.

Thus, play is a suitable purpose and, in this instance, was undertaken with noncommercial motives.

(2) The nature of the copyrighted work.

Conventional wisdom has been that the more creative the copied work, the more this factor will not favour fair use. Returning again to Campbell (1994) the Supreme Court stated, “this factor calls for recognition that some works are closer to the core of intended copyright protection than others, with the consequence that fair use is more difficult to establish when the former works are copied.”[4] Yet,  in that same case, where the Court was evaluating a parodic-creative work, against its input-creative work, the Court also stated that the question of “nature” was of little help and declined to pronounce any assessment for this factor: “This fact, however, is not much help in this case, or ever likely to help much in separating the fair use sheep from the infringing goats in a parody case, since parodies almost invariably copy publicly known, expressive works.”[5]

Subsequently, various Appeals’ courts have emphasized that this factor neither assists with, nor detracts from, an argument of fair use.[6] The same should be said in this situation of play.

(3) The amount and substantiality of the portion used in relation to the copyrighted work as a whole.

It is taken as a matter of logic that the less one copies, the more likely the copying will be assessed as fair. Would-be fair users are instructed to examine the copied work from both a qualitative and quantitative perspective. Dire warnings are cast about taking the heart of a work, that one should avoid replicating the most distinctive aspects of a work. Yet for the use employed here, incorporating a recognizable song is the purpose, much like in the instance of parody as established in Campbell.

The recording industry goes to great lengths to penetrate individual consciousness with lyrics and music (the goal being to embed a desire for purchases of singles, albums, and concert tickets). But when cultural artifacts penetrate lives, those artifacts will show themselves in the personality of those lives. Sometimes the display is purely passive; for instance, the act of listening to music. But for others, the creative among us, passivity eventually gives rise to new production.

Replication and imitation are the foundations upon which future creativity is built. Judge Richard Posner of the United States Court of Appeals for the Seventh Circuit makes this point forcefully:

The pervasiveness of borrowing in literature is captured in Northrop Frye’s dictum that “poetry can only be made out of other poems; novels out of other novels.” Frye had some tart words about copyright. He notes the challenge to the assumptions underlying the copyright law posed by “a literature which includes Chaucer, much of whose poetry is translated or paraphrased from others, Shakespeare, whose plays sometimes follow their sources almost verbatim; and Milton, who asked for nothing better than to steal as much as possible out of the Bible.”[7]

The instinct to replicate and imitate needs to be nurtured early in life if those individuals are to become creative adults.

For the purposes of a conventional four-factor analysis of AL’s situation, the quantitative/qualitative aspects illustrate a minimal taking of Wildest Dreams. Only 36 seconds of the song were copied, and of that only 17 seconds were clearly audible. Of those 17 seconds, the first 12 seconds were purely instrumental. In the remaining five seconds of clarity, a listener would have heard the following lyrics: “He said let’s get out of this town – Drive out of the city.”[7]

At best, those lyrics would be described as one complete sentence and one sentence fragment. The audible quantity of music and lyrics represent a negligible portion of the song and thus ought to be considered fair. And even if one must consider the entire 36 seconds, such a snippet should comfortably be considered fair in light of both the purpose of play (above) and consideration of the effect upon the market as per the fourth statutory factor, to be covered in tomorrow’s concluding installment.

Canadian readers may be relieved to know that our courts acknowledge that evaluation of quantity should be considered in light of the prevailing purpose and the work under consideration. For instance, it is implausible that using a partial quantity of an image would serve any purpose; one either takes all of it or none of it. Copying an entire work for parody or private study may be reasonable, given the nature of the use. Whereas copying an entire work for the purpose of published criticism, may not be appropriate. Our Supreme Court has emphasized many, many times that an evaluation of fair dealing (or other exceptions) is always a contextual investigation. Of course, “play” in Canada is well protected by a number of avenues; see Part I.

 

Notes

[1] In the wake of the Ninth Circuit’s instruction to copyright owners to consider fair use before issuing a takedown notice, Jeff Roberts writes: “ … for practical purposes, the deciding factors are usually whether the new work is transformative and if it will impact the market for the original work.” See “Mom wins huge fair use ruling in Prince “dancing baby” case,Fortune, 24 September 2015.  More recently, see Emily Hong argues that a comparative creation of hers is “transformative and doesn’t necessarily offer a substitutable good.” See “What Beyoncé and Justin Bieber taught me about fair use,” Slate, 25 January 2016.  (For any Canadians reading this, our Supreme Court has never required transformative use; see Meera Nair, “no surprise“.)

[1] Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994).

[2] Authors Guild, Inc. v. HathiTrust 755 F.3d at 97.

[3] See note 2 above.

[4] Ibid.

[5] For instance, Author’s Guild v. Hathi Trust (2nd Circuit 2013); Sony Computer Entertainment America, Inc., vs. BLEEM LLC, (9th Circuit 2000); and Triangle Publications, Inc. vs. Knight-Rider Newspapers, Inc. (5th Circuit 1980).

[6] Northrop Frye, Anatomy of Criticism: Four Essays (Princeton: Princeton University Press, 1957) at 95-104, quoted by William M. Landes & Richard A. Posner, The Economic Structure of Intellectual Property Law (Cambridge: Belknap Press, 2003) at 59-60.

[7] Wildest Dreams is available for viewing and listening at vevo.com, and the lyrics are available from metrolyrics.com.


fair use denied — part III

Fair Duty by Meera Nair - Wed, 2016/02/24 - 09:32

For earlier installments of fair use denied, a story of wildest dreamssee Part I and Part II.

III. of play and progress

Fair use’s flexible language is often lauded as the reason behind the United States’ enviable record of innovation. As a consequence, other countries view a flexible exception as a style worth emulating.[1] However, such adoration of fair use overlooks one vital aspect of creative success—the process which leads to a creative mind. And while we cannot definitively prescribe that process, we can situate the process within the atmosphere of intellectual property.

The conventional premise of intellectual property rights is that such rights enhance the likelihood of creative effort by assuring individuals that their work will not be for naught. Yet the asserted causality between advances in art, science and technology, and heightened levels of intellectual property protection, may be more rhetoric than substance.[2] History offers compelling illustration of creative epochs which were accompanied by little or no intellectual property protections.[3]

Taking our cue from history, it is reasonable to assert that the process of creativity is affected by the ability of individuals to engage with existing/past creations; that is, to act freely upon informal or casual creative impulses. Such freedom is not something that may be turned on or off at will, it is an internal instinct shaped by the surrounding culture of thought. The capacity to let one’s mind roam, to see something that others do not, to explore without conscious objective–to embark upon play—is essential to developing the creative process.

This theme was articulated by Julie Cohen more than a decade ago. While eschewing the proposition that exceptions are users’ rights, Cohen emphasizes that any theory of authors’ rights must be informed by an accompanying theory of the user. Cohen writes: “Both copyright law and policy have shown little interest in understanding the processes by which these roles are performed, nor in inquiring what users need to perform their roles in a way that optimizes the performance of the copyright system as a whole (348).”[4]

Denoting the user as a “situated user”, Cohen makes plain that appropriation of pre-existing cultural goods are part and parcel of the self-development of individuals. The path to creativity includes consuming pre-existing works in a variety of ways. From the humble copy, to reworking that copy, to a seemingly original creation, the route to creativity necessarily includes those intermediary destinations. The stimuli that provoke eventual creative activity are varied; friends, family, teachers, formal and informal learning, advertising, popular culture – all contribute to an awareness of existing cultural goods. Exposure to, and re-communication of those goods, might provoke only a fleeting, partial inspiration which will not take tangible form for many years to come. But for that eventual, socially-prized, creation to come into being, the system of copyright must protect what Cohen describes as play of culture:

… process by which culture bends and folds unpredictably, bringing new groups, artifacts and practices into unexpected juxtaposition.  … [It] emerges from the full spectrum of behaviour of situated users. Consumption, communication, self-development, and creative play, merge and blur into one another, and the play of culture is the result (373).

An overt consciousness of the supposed-illegality of using others’ works must condemn future society to a very narrow realm of creative discovery. Whereas, if individuals are free to explore with the enthusiasm of play, the capacity to foster ideas and cause development in ways that cannot be predicted, is heightened.

But “the Child is father of the Man;”[5] to carry the sense of play into adulthood, it needs first to be protected in childhood. Part IV continues tomorrow.

 

Notes

[1] In 2007, Israel imported much of American fair use into its domestic law. “(a) Fair use of a work is permitted for purposes such as: private study, research, criticism, review, journalistic reporting, quotation, or instruction and examination by an educational institution. ­­­(b) In determining whether a use made of a work is fair within the meaning of this section the factors to be considered shall include, inter alia, all of the following: (1) The purpose and character of the use; (2) The character of the work used; (3) The scope of the use, quantitatively and qualitatively, in relation to the work as a whole; (4) The impact of the use on the value of the work and its potential market. (c) The Minister may make regulations prescribing conditions under which a use shall be deemed a fair use;” see Copyright Act [Isr.], 5768-2007, 2007 LSI 34 (2007) at § 19.
In 2011, Ireland’s Department of Enterprise, Trade and Innovation sought submissions concerning copyright amendment, with an express interest in examining “ …US style ‘fair use’ doctrine to see if it would be appropriate in an Irish/EU context.” Interestingly enough, the terms also stated that if suitable changes were not possible under the current constraints of EU copyright directives, Ireland would make recommendations for changes to those EU directives. <http://www.deti.ie/science/ipr/copyright_review_2011.htm> website no longer available. However, press coverage remains; see John Kennedy, “Radical copyright reform law to boost Ireland’s digital economy?” SiliconRepublic 9 May 2011.
Also in 2011, the Government of the United Kingdom explored fair use fulsomely. While electing to refrain from moving forward with a flexible exception (a decision influenced by strong opposition from the creative industries), it publicly acknowledged the merits of a flexible exception; see Ian Hargreaves, Digital Opportunity—A Review of Intellectual Property and Growth, May 2011.
Meanwhile, in a gentle progression of events which began in 2002, Canada has quietly erased the rigidity of fair dealing and brought it very close to fair use. See Michael Geist, “Fairness Found – How Canada Quietly Shifted from Fair Dealing to Fair Use,” The Copyright Pentalogy: How the Supreme Court of Canada Shook The Foundations of Canadian Copyright Law (Ottawa: University of Ottawa Press, 2013). Another Canadian asset in terms of flexibility is its exception for non-commercial user-generated content; for details see Peter K. Yu, “Can the Canadian UGC Exception Be Transplanted Abroad?”(2014) Intellectual Property Journal 26 175-203.

[2] Calls to remove or lighten the prevailing structure of copyright are routine today; but those calls originated over one century ago. The presumption that monopoly rights were the best mechanism to support creative endeavor was so contentious that a Royal Commission ordered examination of the issue in the late 19th century. While the Commissioners ultimately kept the monopoly structure, opinions were diverse and heated; see Paul Saint-Amour, The Copywrights: Intellectual Property and the Literary Imagination (Ithaca: Cornell University Press, 2003).

[3] Meera Nair, “Fair Dealing at a Crossroads” in ed. Michael Geist, From Radical Extremism to Balanced Copyright—Canadian Copyright and the Digital Agenda (Toronto: Irwin Law, 2010) 90 at 91.

[4] Julie Cohen, “The Place of the User in Copyright Law” (2005) Vol 74 Fordham Law Review p.348.  The lack of genuine interest in users continue today; policy makers provide lip-service attention to the necessity of balance in the system of copyright but refrain from actively supporting it. See Michael Geist’s analysis of the difference between implementation of rights of owners and rights of users as drafted in the TransPacific Partnership (TPP) agreement.

[5] William Wordsworth, “My Heart Leaps Up When I Behold”, The Complete Poetical Works (introduction by John Worley) (London: Macmillan, 1888).


fair use denied — part II

Fair Duty by Meera Nair - Tue, 2016/02/23 - 10:04

For the first installment of this story involving Wildest Dreams and creativity-in-the-making, see Part I of fair use denied.

II. fair use — its origins and intentions

The contemporary bundle of rights comprising copyright is rooted in the customs of 16th century English publishing guilds. Their practices shaped what is often referred to as the first copyright act, the Statute of Anne. Entering into English law  in 1710[1], English colonies, of both loyalist and revolutionary tendencies, drew from the motherland when developing their own jurisprudence.

Eventually, the offshoot nations put their own stamp upon the system of copyright, including the exceptions within the system which  protect individual, unauthorized use of copyrighted works. While Commonwealth countries tended to maintain the English term and structure of fair dealing, in the United States, the exception evolved under the label of fair use.

Initially, fair use was applied only through common law practice; its genesis is usually attributed to Folsom v. Marsh (1841).[2] The dispute concerned two biographies of George Washington; in the process of adjudication Justice Story offered the following instruction to determine what is (or is not) fair use: “In short, we must often, in deciding questions of this sort, look to the nature and objects of the selections made, the quantity and value of the materials used, and the degree in which the use may prejudice the sale, or diminish the profits, or supersede the objects, of the original work.”[3]

This structure shaped fair use’s entry into American law in 1976.[4] Section 107 states:

… the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.[5]

The intent of the then-Congress was that fair use should retain the flexibility necessary to safeguard uses yet unknown. An instructional guide prepared by the Copyright Office of the Library of Congress explicitly draws attention to this necessity:

Section 107 is somewhat vague since it would be difficult to prescribe precise rules to cover all situations. … Section 107 makes it clear that the factors a court shall consider shall “include” [the four factors].  … [T]he terms “including” and “such as” are illustrative and not limitative. The legislative reports state that section 107 as drafted is intended to restate the present judicial doctrine; it is not intended to change, narrow or enlarge it in any way.[6]

According to a House Report about the 1976 Act, “… since the doctrine [of fair use] is an equitable rule of reason, no generally applicable definition is possible, and each case raising the question must be decided on its own facts (emphasis mine).”[7]

Furthermore, the four factors were to be considered in unity against the objectives of the system of copyright itself. Those objectives are clearly stated in the American Constitution: “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”[8]

But Progress takes root in Play. Part III continues tomorrow.

 

Notes

[1] 8 Anne c. C19 (1709/1710). It must be emphasized that for all the pathos (then and now) about copyright serving to protect starving authors, the statutory language was designed principally to keep order in the book trade. This period of time has received extensive coverage; Lyman Ray Patterson and Mark Rose are among the founders of this canon of scholarly work. See L.R.Patterson, Copyright in Historical Perspective (Nashville: Vanderbilt University, 1968) and M.Rose, Authors and Owners – the Invention of Copyright (Cambridge: Harvard University Press, 1993).

[2] Folsom v. Marsh  9 F. Cas. 342, (C.C.D. Mass. 1841) [Folsom]. However “… many of the points raised in Folsom were anticipated two years earlier by Justice Story in Gray v. Russell;”see William Patry, The Fair Use Privilege in Copyright Law, 2d ed. (Washington DC: The Bureau of National Affairs, Inc., 1995) at 19.

[3] Folsom at 348.

[4] That fair use eventually became a component within statutory law was not a foregone conclusion; the process took considerable time and discussion. In 1958, at the behest of the Subcommittee on Patents, Trademarks, and Copyrights, Alan Latman authored a study concerning fair use and raised two questions: (i) should fair use should be codified into law; and, (ii) if so, to what detail? His work was circulated to an advisory panel of nine copyright experts, eight of whom argued that fair use should not be codified with any attempt at specificity. See Alan Latman, “Fair Use of Copyrighted Works, Study No. 14,” Copyright Law Revision, Studies Prepared for the Subcomm. On Patents, Trademarks and Copyrights, Comm. on the Judiciary, 86th Cong. 2d Sess., (Comm. Print 1960).

[5] 17 U.S.C. § 107 (2000 & Supp. IV 2004).

[6] Marybeth Peters (Senior Attorney Advisor), General Guide to the Copyright Act of 1976 (September 1977), United States Copyright Office, Library of Congress, at 8:2,

[7] H.R. Report No. 94-1476, 94th Cong. 2d Sess. 65(1976). Also cited in Halpern et al, Fundamentals of United States Intellectual Property Law: Copyright, Patent, Trademark, 3rd edition (Wolters Kluwer: The Netherlands, 2011) p.18.

[8] U.S. Constitution, Art. I, § 8, cl. 8.


fair use denied — a five part series

Fair Duty by Meera Nair - Mon, 2016/02/22 - 10:06

Fair Use/Fair Dealing Week is upon us; there will be much lauding of these two exceptions over the next five days. Yet there remains one significant barrier to applying fair use in the United States. A barrier which does not arise in Canada.

I. fair use or privacy, but not both

Some time ago, a colleague came to me with a concern. A video created by her daughter, and posted to her YouTube channel, had been removed (due to an allegation of copyright infringement) and a strike had been marked against the account. The daughter, AL, is an amateur filmmaker. With patience and creative instinct, she crafts stop-action photography films. Some are set to music. In this instance though, the video removed was not one of those creations; it was a recording of a life event, with some popular music playing in the background. AL did not mind the loss of the video, but was deeply troubled at being labelled as a copyright infringer.

The question posed to me was: can anything be done about this?

Internet Service Providers (ISPs) operating in Canada need only inform their subscribers of copyright concerns. Canadian ISPs are not obliged to do the bidding of copyright owners who may or may not have a legitimate complaint. The difficulty with the American system is that their ISPs risk liability if they do not heed an allegation of copyright infringement. The system as a whole operates as guilty-until-proven-innocent, which is diametrically opposed to our Canadian presumption of innocent-until-proven-guilty. Moreover, to appeal a takedown/strike by YouTube, one must submit a counter-notification through YouTube to the very party that has claimed infringement. That these situations are not resolved by an impartial entity runs counter to a vital principle of the rule of law.

In response to AL’s distress at “having done something wrong,” I assured her that she did nothing wrong. Admittedly, it is easier to make that assessment in Canada; our Copyright Act has many options through which to protect unauthorized uses of materials, ranging from the threshold at which copyright takes effect (the substantiality of the reproduction), the allowance of incidental use, the ambit afforded by a large and liberal interpretation of fair dealing, and our express encouragement of usage of copyrighted works in the creation of non-commercial compositions.[1]  Nevertheless, American fair use has ample room to do the same. In fact, the United States Court of Appeals for the Ninth Circuit recently instructed copyright owners to consider fair use before issuing a take-down notice.[2]

But it remains that to argue against a takedown/strike, requires laying one’s identity bare. In this situation, I felt distinctly uneasy about drawing attention to AL’s portfolio. According to YouTube, multiple strikes could result in the loss of the account itself. This is not encouraging; the odds of satisfactory resolution appear low while the risk of scrutiny and punishment rises. I did not want to bring further condemnation down upon AL’s young shoulders.

So I did not suggest proceeding with the counter-notification. However, for all parents, in this five-part series I offer up my take on why such creations are law-abiding on both sides of the 49th parallel, and, why our youth should be encouraged to make them.

As noted above, we have more latitude in Canada to  create and post such work. It has been suggested to me that arguing legitimacy under Canadian law is one way to dispute a takedown/strike notice. However, that approach has no guarantee of success anymore than claiming fair use. And since this situation is an outcome of American copyright interpretation, what follows is structured by American law and custom.

Establishing the facts

AL received a copyright strike in response to a video she created and posted to YouTube, describing an outing with a new friend. In the background of her narration and video, is a portion of the song Wildest Dreams sung by Taylor Swift. Of the total 37 seconds that were recorded, only 17 seconds are clearly audible when the video is played.

Many people are involved in the production of commercially released music including composers, lyricists, musicians and singers, all of whom will have some degree of rights (copyright or performers’ rights). The complex web of rights may be assigned through contract to a single entity; often the publisher assumes those rights. But, that is not necessarily always the case. And when a song is promoted through the use of a music video, even more people are involved, including directors and other performers, with even more rights to be sorted out.

But popular press tends to focus upon performers and (perhaps unintentionally) cultivate the impression that songs belong to their performer. For instance, coverage of the removal of Swift’s back catalogue from Spotify conveyed the impression that ownership was Swift’s and identified Big Machine Music as her label. The video of Wildest Dreams is clearly marked “(c) 2015 Big Machine Records, LLC.” Yet when the video was released, and criticized for romanticizing colonialism, the press conveyed the impression that the work belonged to Swift (i.e. see The Atlantic, the guardian, and CNN).

As to whether Swift has partial, or complete control, with respect to musical/artistic development, or management/enforcement of copyright, we do not know. The only information we have is that the complainant was ifpi, an international organization, based in the United Kingdom, which represents the recording industry.

It should be noted that the website taylorswift.com provides 30-second previews of songs performed by Taylor Swift, and the Wildest Dreams video is sanctioned by its copyright owner(s) to be enjoyed in its entirety via vevo.com. No doubt the first rebuttal to these facts will be that copyright law is rooted in reproduction, thus an authorization to listen is not an authorization to reproduce. But fair use beckons.

However, before one can employ fair use, fair use itself must be established. Part Two continues tomorrow.

 

Notes

[1] Section 29.21 of the Copyright Act (R.S.C., 1985, c. C-42) is an exception which protects amateur creators. I have written about this many times, for instance see poems out of other poems.

[2] Stephanie Lenz v. Universal Music (2015) D.C. No. 5:07-cv-03783-JF.  Although, drawing from AL’s situation, it appears doubtful that foreign entities will give much attention to an American court’s dictates.

 

 


An analogy to understand the FBI’s request of Apple

Freedom to Tinker - Mon, 2016/02/22 - 09:00
After my previous blog post about the FBI, Apple, and the San Bernadino iPhone, I’ve been reading many other bloggers and news articles on the topic. What seems to be missing is a decent analogy to explain the unusual nature of the FBI’s demand and the importance of Apple’s stance in opposition to it. Before I dive […]

Apple, the FBI, and the San Bernadino iPhone

Freedom to Tinker - Wed, 2016/02/17 - 13:27
Apple just posted a remarkable “customer letter” on its web site. To understand it, let’s take a few steps back. In a nutshell, one of the San Bernadino shooters had an iPhone. The FBI wants to root through it as part of their investigation, but they can’t do this effectively because of Apple’s security features. […]

How Does Zero-Rating Affect Mobile Data Usage?

Freedom to Tinker - Thu, 2016/02/11 - 00:08
On Monday, the Telecom Regulatory Authority of India (TRAI) released a decision that effectively bans “zero-rated” Internet services in the country. While the notion of zero-rating might be somewhat new to many readers in the United States, the practice is common in many developing economies. Essentially, it is the practice by which a carrier creates an […]

The Princeton Bitcoin textbook is now freely available

Freedom to Tinker - Tue, 2016/02/09 - 14:17
The first complete draft of the Princeton Bitcoin textbook is now freely available. We’re very happy with how the book turned out: it’s comprehensive, at over 300 pages, but has a conversational style that keeps it readable. If you’re looking to truly understand how Bitcoin works at a technical level and have a basic familiarity […]
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