My post this week on the behind-the-scenes demands to make Bill C-11, the current copyright bill, more like SOPA has attracted considerable attention with mainstream (National Post, La Presse) and online media (Mashable, Wire Report) covering the story. The music industry alone is seeking over a dozen changes to the bill, including website blocking, Internet termination for alleged repeat infringers, and an expansion of the “enabler” provision that is supposedly designed to target pirate sites. Meanwhile, the Entertainment Software Association of Canada also wants an expansion of the enabler provision along with further tightening of the already-restrictive digital lock rules.
The concern with expanding the enabler provision is that overly broad language could create increased legal risk for legitimate websites. As a result, new online businesses may avoid investing in Canada for fear of potential liability or costly lawsuits. My post cited concerns about SOPA being used to target sites like Youtube and the danger that that could spill over into Canada. Industry lawyer Barry Sookman responds in the National Post article, arguing that it is “inconceivable” and “not remotely possible” that the law could be used to shut down a mainstream site like Youtube.
Millions of Internet users certainly hope Sookman is right, yet recent experience suggests that the content industry is open to using these kinds of provisions in massive lawsuits against sites like Youtube. For example, consider the ongoing Viacom lawsuit against Youtube/Google.
Viacom lost at the trial level in 2010, but has appealed the decision. The SOPA-style enabler provision under Bill C-11 that the content industry is demanding would include six factors for a court to consider. Contrast the Bill C-11 factors that a court may consider with Viacom’s claims in its appellate brief:
|Bill C-11 Enabler Provision Factors||Viacom’s Claims|
|whether the person expressly or implicitly marketed or promoted the service as one that could be used to enable acts of copyright infringement||“YouTube’s founders built an integrated media entertainment business, in the district court’s words, by â€œwelcom[ing] copyright-infringing material being placed on their website.â€ That copyrighted material was â€œattractive to usersâ€ and â€œenhanced defendants’ income from advertisements,â€ enabling YouTube’s founders to sell the business to Google for $1.65 billion.”|
|whether the person had knowledge that the service was used to enable a significant number of acts of copyright infringement||“Almost immediately after YouTube came online, YouTube became aware of widespread infringement on its site. And it was the copyrighted videosâ€”not home moviesâ€”that people flocked to YouTube to see.”|
|whether the service has significant uses other than to enable acts of copyright infringement||“In their written presentation to Google’s board and senior management, Google’s financial advisors stated that 60 percent of YouTube’s views were â€œpremiumâ€ â€”i.e., copyrightedâ€”and only 10 percent of the premium videos were licensed.”|
|the person’s ability, as part of providing the service, to limit acts of copyright infringement, and any action taken by the person to do so||“Dunton similarly put a stop to efforts to implement software that would notify copyright owners when infringing videos were uploaded. Even though a YouTube engineer said that implementing an automated anti-infringement tool to alert copyright owners when suspected infringing content was uploaded â€œisn’t hardâ€ and would â€œtake another day or [weekend],â€ Dunton ordered the engineer to â€œforget about the email alerts stuffâ€ because â€œwe’re just trying to cover our asses so we don’t get sued.â€”|
|any benefits the person received as a result of enabling the acts of copyright
|“Unable to compete with YouTube’s pirated content, in late 2006, Google bought YouTube for $1.65 billion.”|
|the economic viability of the provision of the service if it were not used to enable acts of copyright infringement||“As early as June of 2005, YouTube’s Internet service provider complained that YouTube was violating its user agreement by, YouTube founder Steve Chen believed, â€œhosting copyrighted content.â€ But Chen resolved that YouTube was â€œnot about to take down content because our ISP is giving us shit.â€ And, in emails with the other founders, he later remarked â€œwe need to attract traffic. . . . [T]he only reason why our traffic surged was due to a video of this typeâ€â€”i.e., copyrighted and unauthorized”|
This is obviously one side of the story and is an appeal from a decision that ruled in Youtube’s favour, concluding the site is protected by the safe harbours found in the DMCA. Moreover, the same kind of suit launched against Veoh, another online video site, recently also failed (though it cost the founder his company).
Yet reading the Viacom claims makes it clear that applying its arguments to a SOPA-version of the Bill C-11 enabler clause (which content groups want expanded to include operating or inducing infringement) could create a huge chill in the investment and technology community in Canada. Online video sites, cloud computing sites, and other online services may look at the Bill C-11 and fear that even a lawsuit could create massive costs, scare away investors, and stifle new innovation. Indeed, a recent study by Booz & Company found this to be a very real problem, with a large majority of the angel investors and venture capitalists saying they will not put their money in digital content intermediaries if governments pass tough new rules allowing websites to be sued or fined for infringing digital content posted by users. The U.S. has dropped SOPA, but now incredibly Canada may consider the very provisions that causes investors to become skittish.
The Business Coalition for Balanced Copyright, which includes leading technology, telecom, retail, and Internet companies, has already expressed concern with the Bill C-11 digital lock rules. Turning Bill C-11 into a Canadian SOPA would only make matters worse, creating a legal framework that would harm Canadian business and consumers.