Following on CRIA's pledge not to sue consumers who copy their CDs onto iPods or computer hard drives, my regular Law Bytes column (freely available hyperlinked version, Toronto Star version) reflects on the recent decision by the Canadian Supreme Court to let stand a ruling that upheld the legality of the Canadian private copying system but rejected an attempt to apply it to digital audio recorders such as the Apple iPod. The column argues that while in theory the private copying system provides consumers with the right to copy and artists with appropriate compensation for that copying, it is time to acknowledge that the system has failed and must be dramatically reformed or scrapped entirely.

In addition to the Supreme Court decision, I note that the Canadian government plans to further constrict the rights enjoyed by consumers under the private copying levy.  Bill C-60, Canada's copyright reform bill, includes a provision that allows the music industry to prohibit private copying on CDs that contain anti-copying technologies such as those used on the latest CD from the popular group Coldplay. This provision seemingly contradicts CRIA's pledge in yesterday's Star that it will take no legal action against consumers who legally acquire music and copy it to their hard drives or portable devices.

Should this provision become law, Canadians would pay tens of millions of dollars in levy fees, yet they would be precluded from copying their CDs onto their iPods or, in the case of "copy-controlled" CDs, making any private copies at all.

If that were not bad enough, the millions of dollars collected through the levy does not appear to be making its way to Canadian artists.  Although the levy has generated more than $120 million over the past five years, Canadian Private Copying Collective (the administrator of the levy) has only distributed about 25 percent of those funds.

Industry Minister David Emerson and Canadian Heritage Minister Liza Frulla have indicated that the government plans later this year to consult on the future of private copying.  With few remaining supporters,  even one-time private copying champion CRIA welcomed the Supreme Court decision, change is urgently required.

One approach would be to expand the levy so that it better reflects current copying practices.  Using the model of several European countries, the levy would grow in size, but so too would the rights of consumers to copy both audio and video for personal purposes.  In fact, such an approach would provide the music industry with multiple revenue streams since it would collect the levy for peer-to-peer music file sharing, while also enjoying the benefits of a thriving commercial download market.

However, given the opposition to the levy system, the better alternative might be to simply drop it completely.  In its place, Canada could adopt a "fair use" provision that would allow consumers to copy their own CD collection onto another device along with the elimination of statutory damages provisions for such copying cases.  The fair use approach would match the U.S. model, where the recording industry has acknowledged that consumers have the right to copy their own CDs without reference to a private copying levy (and which CRIA seemed to acknowledge in its pledge yesterday).  

There is no question that the introduction of the private copying system was intended to provide artists with compensation and consumers with legal certainty.  It has done neither.  The time has come to replace it with a fair use system that would be more equitable to all Canadians.