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Copyright Board Gives Go Ahead to iPod Levy

The Copyright Board of Canada has released its decision on a series of motions contesting the latest attempt by the Canadian Private Copyright Collective to apply the private copying levy to iPods and removable memory storage cards.  The proposed levy was challenged by the Canadian Storage Media Alliance and the Retail Council of Canada, who argued that the Federal Court had already struck down a previous levy on iPods (or more accurately digital audio recorders) as outside the Copyright Act.  The CSMA and RCC argued that the Board had no jurisdiction to consider or approve the levy or alternatively that the CPCC should be prevented from proposing it.

The Board conducted hearings on the motions last month and has responded quickly with an emphatic rejection of the CSMA and RCC.  Siding consistently with the CPCC, the Board has left little doubt that it believes that the earlier decision has not foreclosed the possibility of a levy on devices such as the iPod.  In fact, the Board provides the clearest statement yet that it believes that the levy could be applied to any device, including cellphones and computers.  At paragraph 70, the decision states:
CSMA expressed misgivings about the possibility that cellular phones and computers might end up being leviable. We see no inherent problem with this scenario. A thing that is ordinarily used by individual consumers to make private copies should not be excluded from the private copying regime for the sole reason that it has other uses.  Indeed, all media that are currently subject to the levy can be used for purposes other than private copying."

The decision continues by stating that this interpretation is consistent with the intent of the Copyright Act and Parliament, concluding that "to rule that digital recorders are not audio recording media does not serve the purpose of the Act or that of Part VIII [the private copying provisions]. It instantly makes the conduct of millions of Canadians illegal, and even possibly criminal."

Today's decision will likely be appealed, though assuming it stands it will lead to new hearings on the private copying levy.  Moreover, given the Board's view that the levy potentially applies to any device, including personal computers, it also provides further confirmation that peer-to-peer downloading is covered by the private copying levy.  As I argued earlier this year (parts one and two), a levy to address P2P may make sense, yet the current approach, which could lead to levies on SD cards, doesn't work.  If we're going to make P2P legal through a levy system, the system must (1) address both downloading and uploading; (2) consider addressing non-commercial use of content; (3) cover audio and video; and (4) more closely link the copying to those paying the levy.  The government has yet to play its hand on this issue, but with the prospect of an unpopular levy and mounting pressure for a Canadian fair use provision, it will have to take a stand sometime soon.

43 Comments

  1. Hmmmm. Wonder if the CRIA would be upset if every class in every school signed up for their fair share? Every school project that uses video files or audio files, and places them in repositories for worldwide distribution should receive compensation under the law, even though they might be using the Creative Commons Public Domain license. A little paperwork, and the schools get a nice chunk of the CRIA\’s pie. This gets even better, when they discover Meraki units. Those little boxes that act as appliances, and make it possible to connect everyone wirelessly to share files. :)

  2. There’s no problem. First, they implement the levy across the board. Second, they forward the money to the major labels [and only the major labels]. Third, they pass a law making it criminal, and not just a civil injury, for either uploading or downloading any material that is controlled by a major corporation [either music or video]. All the smaller independent labels and/or movie producers or distributors can go to hell!

  3. CTO
    My brain can remember a song. Sometimes I may even whistle or sing the song out loud. Everytime I do that, I think Celine Dione should get $1.

    Give me a break Canada and pull your arse out of the moose.

  4. Canada’s Copyright act already has an exemption for personal and private copying of audio work, yet the levy only addresses the private copying of audio works. Why the redundancy?

  5. Health care
    I am totally for a levy of this sort, the whiners that say “But I don’t download music, I buy it all I don’t want to pay!” are trying to make the same argument as those who disagree with universal health care…you pay the tax whether you take advantage of the service or not, suck it up. I however take full advantage of both, 2 emergency visits in the last two months and 3 follow ups, and about 8 gigs dl’ed. I love Canada….eat it America, make new laws that make sense.
    Unless I’m totally mistaken and misunderstand both Canada’s current laws and the proposed revisions, article’s kinda vague

  6. Am I paying for:

    1) The right to share copies with my \\\”friends\\\” on the internet.
    2) The right to transfer content that I already paid for to another device that I owned for my exclusive personal use. IE \\\”private copying\\\”.

    If I\\\’m paying for 2), then this is an egregious form of copyright socialism whereby I have been deprived of the ability to choose the musical entity that I will support financially. This means, among other things, that I can\\\’t deprive the RIAA of my music dollars in favour of independent artists via emusic.

    If I\\\’m paying for 1), then our copyright laws defy logic and common sense. The notion that I must \\\”pay\\\” for the privilege of using the music I paid for more than once is repugnant. Also, it defies any reason, given the proliferation of computers and the internet.

  7. Who owes who?
    If your brain plays a Celine Dion song, I think she should pay you for the storage of the song in your head, and perhaps an additional sum for pain and suffering.

  8. Cole
    I don’t understand one aspect of this. When I use iTunes, or iTunes Plus, I’ve entered into a legal agreement that allows me to burn a limited or unlimited number of CDs (differs based on basic or Plus). Why must I then pay a tax on something that already covers legal copying within the terms of use? I’m all for Levys legitimating P2P, but I just don’t get this part. Or is it that the levy would allow me to burn a copy of the album and give it to a friend?

  9. I think the idea of a levy would be great, if:

    1) The money goes to all artists fairly, not just artists signed by major corporations
    2) Given that we are paying for the data, it’s fine to download it without paying (legal p2p)
    3) Since we’ve payed for it, they can’t restrict us from doing what we want with it (NO DRM!!)

    When are we going to get a system in place that deals fairly with non-scarce goods?

  10. Just as Dave wrote above: if we are already paying the levy for data storage medium, why should there be DRM attached to the original when I am allowed to make a copy legally?

    Oh and just imagine what happens when writers and publishers ask every notebook and sheet of paper to be levied because it could potentially be used to store their copyrighted works!

  11. Luke, you are paying for #2 with the levy, and I think your assessment of the situation is most apt (although the levy funds go to the CRIA, not the RIAA).

  12. While we’re at it …
    Let’s put everyone in prison for a few days during the year; Some of us do commit crimes, after all, and it would only be fair to society if we all paid our dues for those who aren’t caught.

    This is surreal. I can’t quite figure out whether this is Canada or the USSR that I’m living in.

  13. Wojtek – the levy doesn’t exist to cover damages due to illegal activities… even at its best that would be perceived as legitimizing those activities, which it definitely does not do. It actually exists to compensate the artists for personal and private copying of audio works, which is already exempt from copyright infringement and thus perfectly legal in Canada I guess why they added the levy to something that wasn’t part of the cost before is probably the same reason some cities decide to turn bridges that were once completely free to cross into toll bridges as the cities grow… it’s just a way of making some extra money.

  14. This sort of reminds me of socialism, except that the money all goes to an undeserving copyright collective instead of wherever it would be expected to go in a socialist system.

  15. Martin Laplante says:

    How much?
    Yes, as a writable medium iPods can be subject to a levy, but when calculated properly the amount of that levy should be about $0.00. You first have to establish how much of the use of the iPod is for eligible private copying, as opposed to copying already permitted by the copyright holder or to piracy. Secondly you have to establish the value of the loss. So what would be the remuneration to an author if someone sold an iPod at a premium price with their song already on it? Not much market for that?

    Here is another thought: when I bought my MP3 player it already had sample songs on it. It therefore wasn’t “blank media”. If I buy my iPod with an 80 gig rant about the copyright board already on it, does that mean no levy?

  16. My MP3 player plays (free) podcasts and rips from CDs that I own.

    My hundreds(?) of CD-Rs and DVD-Rs store backups of my personal photos and home videos.

    Obviously this levy doesn’t apply to me.

    Don’t treat me as a criminal because I have the tools to do so. I *could* steal music and movies, but I choose not to. So I’m being punished for bing an honest purchaser of content?

    May I have my money back please?

  17. “Ordinarily Used” …?
    Could someone with some legal background tell me if there is a clear definition attached to “ordinarily used”? This phrase is the one that huge chunks of this hang on, and on the next response of the electronics industry.

    Here’s why I see this phrase as critical. I can accept that an iPod (a “digital audio device”) is “ordinarily used” to store phonographic recordings.

    However, the hard drive, when outside the iPod and as a general class of device is not “ordinarily used” to store phonographic recordings. (Right?)

    So – if I sell ‘empty’ iPods, and the consumers buy a device that is NOT ordinarily used to store recordings, and insert it into the device – well then, at what point does the hard drive become a leviable recording medium? (This same logic applies to any storage medium that serves multiple purposes, such as flash cards, and even paper.)

    The only potential upside I see is that the hard drive might be considered a leviable medium, but because it is used infrequently (across the whole hard drive market) for phonographic recordings, the actual levy will be minute — imagine $0.005 per gigabyte on hard drives.

    All in all, this decision appears to clarify this issue now, but at the cost of making the next decision a truly massive one, with enormous consequences.

  18. Hm. Interesting. My new Panasonic digital SLR camera has built-in memory and an internal microphone for taking movies and a built-in speaker for reviewing… What if I start using my camera to store/transport music? I would love to hear the copyright board argue that cameras should pay a levy to the music industry…

  19. David Harvey says:

    Time to repeal the levy
    In the Conservative’s March 2005 policy declaration, they said: “A Conservative Government will eliminate the levy on blank recording materials.”

    They also said that they believed

    “that the objectives of copyright legislation should be:

    d) to continue to allow an individual to make copies of sound recordings of musical works for that person’s personal and individual use;
    …”

    See pages 12-13 at [ link ]

    It’s time to hold them to their promise.

  20. Another Doug says:

    Given my own knowledge, my friends knowledge and the comments presented here: It seems that, really, no one has sat down to figure this all out. Where is the list of rules about this levy stuff? Where does it say you can do this, but not that? Has anyone (other than the corporate garbage that profits from this double-dipping) actually sat down and said: “Wait, was this whole levy even a good idea in the first place? What are the consumers getting? They are paying… twice… for a ‘license’ for this music, but what do they _get_ for this double paying?” Isn’t there something or some kind of law saying when you pay (not gift) money to someone you get something of fair value in return?! I _know_ I didn’t agree to gift my money to music-extortionists, so what am I getting for my twice paid money?

  21. 127.0.0.1
    Let them collect the copyright charge, but distribute it to all media producers and audit them!!!!

    I am fine with paying it, because it means I can download without guilt.

    If they want to add it to removable media (like my memory cards for my cameras), then I will use them to take pictures of copyright images and reproduce them as I see fit.

    But the second they start talking about DRM and ‘illegal downloads’, I want all that money back with interest!!

    C

  22. Okay, aside from my disgust with this ruling, when they begin this practice it will inherently grant me the right to pirate (sorry, appropriate for personal use) any music I want because, in effect, I have already paid for the music by way of this levy.

    This loosely translates into a presumption of guilt for any consumer that purchases such devices. As they would be charging (or effectively presuming a conviction) us for the crime, committed or not, we will have paid for the right to download anything, which *was* legal already (if this has not changed).

    Regardless of actual legalities, this sort of levy will justify the crime in the minds of those who are already content with the download and distribution of copyrighted materials.

    Where does this decision get us? No closer to justice that is for certain this is both a criminal and moral issue. IMHO, piracy is theft. The works protected by copyright are the possession of the copyright holder under intellectual property laws. The laws need to reflect this and gain some serious fangs to ensure they are effective.

  23. Canadian
    By this faulty reasoning we should also have a tax on electricity since part of what it does is copy music.

    The party in power when this craziness gets implemented will lose my vote for as long as I live.

    Who exactly is running our country?

  24. First of all, the levy does not allow consumers the privilege of reproducing copyrighted works for any purpose. It permits the copying of musical works for the personal and private use of the person who made the copy, and that’s it. Supposedly, without the levy, private copying would still be copyright infringement without permission from the copyright holder. The Canadian Copyright Act contains an exemption from infringement for private copying, but it’s come to my attention recently that this exemption actually only came into effect at the same time as the copyright act was amended to permit a levy for blank media in the first place (1997, I believe). Prior to that it was illegal, even though it was technically unenforceable. Objecting to the levy by deciding to disregard copyright law and reproduce copyrighted works for non-personal use with utter abandon would ultimately be counter-productive to the population as a whole, as it would only serve to reinforce the perception by organizations that supposedly represent the interests of copyright holders that stricter copyright control measures are needed, which almost certainly would ultimately impact our ability to even be able to take advantage of the fact that private copying is supposed to be exempt from infringement.

    It’s perfectly legal, however, for a consumer to avoid reimbursing retailers for the levy. You can buy blank media from countries that don’t have such a levy, as neither the postal service nor Canada Customs are authorized to collect it. In this respect, it’s highly different from any form of normal taxation, as there are no legal ramifications for a consumer in Canada who has purchased a product without the levy, and upon which a levy would have otherwise been owed if the product had been purchased within the country since the levy came into existence. Technically, erasable media that already has stuff recorded on it should also be exempt from the levy, as it is supposed to apply to blank media only (although I don’t know how far that would fly, in actuality).

    I do firmly think, however, that the copyright act should be amended on the subject of private copying to not just be limited to musical works, but I believe private copying should be exempt from infringement for ANY copyrighted work, AS LONG AS it is for the personal and private use of the person making the copy, and AS LONG AS the person making the copy has immediate access to the work that they are copying from (which would remove ambiguity about the alleged legality of downloading copyrighted works without permission from the copyright holder). As privately copying for personal use being copyright infringement is technically unenforceable anyways, it would make a lot of sense if they did this. Especially since there are so many forms of copyrighted works for which additional private use copies would be valuable (photocopying magazine articles for personal use being just one example that immediately springs to mind).

  25. They should put the levy on speakers and headphones.

    Solves all the problems of dual use, etc. Afterall, a mp3 is just a computer file not music. It’s the speakers or the headphones that let’s you hear the music.

  26. Anonymous says:

    Dick
    I must be stupid or something, but I have no idea what this is about? Is this supposed to be some sort of tax on sharing music or something? I’m lost.

  27. Wake up Call
    I don’t think people realize this, but you’ve been paying this in Canada since the levy was put in place ~1997. I personally think this is a great idea. Having a levy means that you cannot be charged with copyright infringement for file sharing as you have technically already paid for the work. While the current system most likely never touches the artists (It’s a record label world.) which I don’t agree with, it does allow Canadians to legally use P2P to download music. It does not however allow you to upload music legally, that’s still a legal grey area after the last court descision that saw no difference between P2P sharing and a photocopier at a library.

    The cost of the levy is only a few cents on a CD, and a dollar on an MP3 storage device (from their last proposal.) While computers would probably get a larger chunk of taxation, this still protects you from being sued by the record companies for copying your own music. Canada is simply taking a Personal Use Friendly stance on copyright, instead of becoming record label whores like the US government.

    In the end, it comes down to this. We pay lots of taxes, every day. You’ve been paying this tax on VHS tapes, Audio Cassettes (If you remember them), CD’s and any other media that could be used to store audio copies. What’s it going to matter if they tax you a little more? You’re just going to bend over and take it like a good Canadian citizen anyways.

    Dan
    Gods of NOS
    http://www.nerdnos.net
    A Proud Canuck!

  28. Not coming from Canada I’m not familiar with Canadian law, but doesn’t the copyright legislation include a fair use provision (as it does in the rest of world)? How therefore can private copying be illegal? Am I missing something?

  29. Saddened
    Michael, I don’t understand how things like this get passed. All it takes is one person to speak up and say the obvious “Logic 101″: This Apple is red; But not apples are red. By applying a tax to SD cards and other recordable media, they are essentiall calling all Apples red. We have 4 memory cards in our home and NONE ever contain music (videos and photos! they are for our cameras!!!) but they would be subject to the levy if they were purchased in the future for the same purpose!!

    This tax SEALS IT for me. From now on I WILL use P2P and just copy music. I’ve sure as hell PAID FOR IT ALREADY through blank CD purchases (even though they were for data backups). The really SAD parts is the money collected will NEVER make it to the many obscure artists I listen to.

  30. Dan, technically you are incorrect. While levies have been in place in the past, the SCC refused to overturn a Federal Appeals Court decision that threw them out. From what I remember, that was back in 2003 or 2004. Also, the 1997 levy was only in place for a short while (I’m hazy on the dates here). We have not continuously been paying it for 10 years though, that is certain.

    As for a levy making downloading legal, that has not been tested in court as far as I know. One could argue that the effect of the levy is to compensate for such practices, but (based on my limited knowledge of copyright law) it does not ‘exempt’ one from being prosecuted for infringement.

    Michael may have written on this in the past, so I’m about to go do a search, but be careful passing yourself off as the expert when you clearly don’t have all the facts.

  31. Of course, all this will do is increase cross border shopping for iPods and memory. To target memory chips, which everyone knows are used by photographers in the main is going to cause all kinds of issues.

  32. Levies (reply to Morgan and Dave)
    In response to Morgan,

    While I’m not up to date on the current situation with the levies, as far as I’ve seen, they are still applied to all recordable media now and have been since 1997. The levy was never actually removed from Canadian media at all, and the money has never actually been distributed either. Its just another moneypot for the government.

    Also, I never ever claimed to be an expert. I’d be writing an article on the subject, not a comment if I was an “expert.”

    The entire idea of the Levy was so that artists are compensated for personal copying. If you have paid compensation for personal copying, you cannot be sued for such. In essence the levy is a way to protect Canadian citizens from being punished in such cases.

    Again, I’m no expert on the situation and I won’t claim to be. But I’m pretty damned sure any judge that saw that I’ve been paying a levy on all my blank media, anyone suing me for copyright infringement is going to have a hard time pushing a case against me.

    The other issue is making downloading legal. In Canada you can legally download music. The Fair Dealing provision allows for personal copying, this has been tested in court. In reality, the RIAA, the CRIAA and all that, can’t really identify the downloaders anyways. They are more than happy to go after people sharing music because they are the easy target, as well as the one that can make more money.

    You can’t exactly go after someone for $750.00 a song if they downloaded the music for themselves, the most you could get is retail price per song, $0.99 each. Canada is great for one thing, estimated losses are not as effective here in a court of law as in the United States. Most likely one of the reasons no one here sues for millions over a pair of $20 pants.

    To Dave:

    Canada has a fair dealing section in our Copyright Act, which is basically the same as US Fair Use, however our copyright system isn’t as open when it comes to commenting or critizing works. While a personal use clause is there, I would rather have paid actual money to a collecting body, because that puts them on the hook for any money I might owe, not me. I have a massive collection of DVD and CD media that is used for my own data, rather than music, and I’ve paid the levy for alot of that (Even if I haven’t been paying all along as Morgan says above. Alot of my media is from before 2003.)

    Just my $0.02

    Dan
    Gods of NOS
    http://www.nerdnos.net

  33. This doesn’t make much sense to me. One could argue that SD cards are primarily used for digital cameras. Indeed, some cameras come with SD cards. Does this now mean that photographers must now pay the recording industry for the right to purchase a digital camera?

    I agree with the rest of the country that, whatever the law might say, if I’m paying a levy on blank media, I consider that permission from the recording industry to download as much music as I want. Why my hard-disk backups require me to pay the record industry is beyond me, but if I’m paying them, I’m damned well going to get something for my money.

  34. The ONLY thing we are getting for the levy is permission to copy songs for personal and private use. It is erroneous to believe otherwise, and an imminent violation of Copyright law in Canada to act on such a premise.

    There are some causes that are most definitely worth civil disobedience, human and civic rights being most noteworthy in that regard, but an alleged “right” to reproduce somebody else’s copyrighted work without limitation is definitely not one of them. The levy grants us private use copying of music without infringement. Personally, I think it should apply to private copying of all forms of copyrighted works, not just music, but I can at least agree with the premise of it, if not the actual scope.

  35. Stupid Canadians
    You idiots are sheep. This is corporate welfare. How is it that the ‘Artists’ in America survive quite well without this tax?

    I hope you tax all of your citizens out of existence, and your government collapses and you have to get your buddy Hugo Chavez to bail your country out.

  36. Simple. It’s not a tax. Unlike taxes, it’s not illegal for a consumer to avoid paying it by buying overseas.

  37. Perhaps people in the Music Industry only use their computers for music purposes, and that’s why they come up with such a strange idea of charging a levy on digital storage devices.

    I, for example, don’t listen to music. I use usb devices to transfer data and program files among computers. Why should the music industry get paid for my non-music-related activities?

    And what are recording devices for? Recording lectures and meetings, not their stupid music!

    By their reasoning, anyone who puts photos and home-shot videos on you-tube should get paid too.

  38. The tech savvys are talking about booting computers from usb drives, which obviously has nothing to do with the music industry.
    Having to pay $25 levy for that is simply outrageous.

  39. Artisan
    You might call me a Luddite artisan, in the grand tradition… “The Luddites were a social movement of British textile artisans in the early nineteenth century who protested — often by destroying sewing machines — against the changes produced by the Industrial Revolution, which they felt threatened their livelihood.”

    Artisans need to protest this so-called royalty tax, it is a scam and a very sneaky one based on a total misunderstanding of the new technologies.

    The fact is, there needs to be huge disctinction made between the creative material and the medium it is delivered on. You don’t tax the “MP3 file format” or the “CD disc” or “the player”, you specify that the royalty tax is on the ‘song’ itself, the actual creative material. This tax is a cloaked snow job on people who barely understand the difference. A CD, memory card, media player or a file format is merely the carrier for whatever creative material is on it.

    Another serious flaw in this proposed copyright levy on blank media is that artists and musicians themselves will also be taxed for archiving and loading devices with their own original material! I hear no suggestions of any kind of special artisan’s membership card to avoid being caught in this suspicious money grab by the copyright board.

    The reality is that by and large, the vast majority of sincere creative projects do not reach commercial markets and yet will still suffer the extra burden of this incidious ‘value added’ tax. Cultural development will be compromised as experimental projects and the Avante Garde find this tax just an extra unnecessary cost of being creative. Notwithstanding that such pure art for art sake is often only ‘discovered’ by the public years after an artisan dies.

    The courts, Government and the Copyright board itself needs to seriously re-think this tax in terms of how it will impact the vast majority of creative people who do not necessarily live to produce commerical work but who still need to archive and use the new technologies to create. They should not be unfairly taxed for blank media. period. We all listen and record whatever we want on these devices, not necessarily commercially produced product.

    I have to reiterate, I think it is a pre-emptive money grab on the technologically ignorant, afterall, recordable cassettes were never treated like this.

  40. I think most people have forgotten one point.

    There’s no longer a distinction between computer storage media and music/movie storage media today. Anything that can be converted to zeros and ones are now stored digitally on the same storage media. Photos, software, documents, spreadsheets, your own financial data, are all stored on the same media.

    So this levy is essentially saying that anyone who isn’t a “caveman” is bound to have to sponsor the music/movie industry in some way. I think this idea is simply wrong.

  41. Here’s another question.

    What constitutes an iPod or iPod-like machine?

    Any portable laptop or palm-top, running windows, which comes with the windows media player and sound recorder, can play and record mp3 songs; and usually there is a plug for a headphone too.

  42. Christina says:

    Who, exactly gets the levy money anyways? I have a musician friend who has to pay the levy on CD’s (like we all do) to make copies of his OWN music. Never has he seen a red cent of “compensation” through this levy system. How does it work?

  43. Anonymous says:

    tshawn
    what is a ipod kk because i don’t know to work it