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Why Canada Does Not Belong on the U.S. Piracy Watchlist

In recent years, some groups have claimed that Canada has become a “piracy haven.” These inaccurate perceptions have been fuelled in part by the Special 301 process. However, evidence suggests the contrary. In 2010, the World Economic Forum found that global executives actually rank Canadian intellectual property protection ahead of the United States, the United Kingdom, Japan, and most of Europe.  The WEF’s Global Competitiveness Report ranked Canada 13th for IP protection, including anti-counterfeiting measures.  That is ahead of Australia (14th), Norway (16th), United Kingdom (17th), Japan (21st), and the United States (24th).

Evidence even from industry sources suggests that rates of infringement have been declining in Canada. For example, the Business Software Alliance’s annual Global Piracy Report  shows Canada steadily declining as it stands among the 15 lowest piracy countries in the world. Canada’s is well below the Western European average and well below the other countries on the USTR Special 301 Watch List. While the BSA noted an increase in the dollar amount, this is due almost entirely to currency fluctuations given the stronger Canadian dollar. According to Michael Murphy, Chairman of the BSA Canada Committee, “at 28 per cent, Canada’s piracy rate is at an all time low, dropping six percentage points since 2006.”

This decline in piracy is not limited to software. In the aftermath of anti-camcording legislation, the Canadian Motion Pictures Distributors Association acknowledged that illegal camcording had largely disappeared from the Canadian market.  

Not only have piracy rates been declining in Canada, the legal markets for content have been expanding and revenues of the creative industries have been growing. Statistics Canada reports that operating revenue for motion picture theatres in Canada has grown steadily since 2005, with the industry enjoying operating profit margins of 11.3% in 2010. 

Canada is a leader when it comes to online music sales. It is the 6th largest market for recorded music in the world, ranking 6th for digital sales and 7th for physical sales. In fact, the Canadian digital music market has grown faster than the U.S. market for five consecutive years.  The Canadian Recording Industry Association recently cited new survey data confirming that young Canadians are music buyers, which it said leads to the conclusion that Canada “is a digital greenfield opportunity.”  In fact, Canada has been home to a robust digital music market with download services such as iTunes, Hip Digital, Puretracks, Archambault, HMV Digital, 7Digital; non-interactive streaming services such as Galaxie Mobile and Slacker Radio; on-demand streaming such as Rdio, BBM Music, and Zune Music Pass; and streaming music videos such as YouTube and Vevo.

The entertainment software industry has also enjoyed remarkable growth in Canada. The industry is now the third largest in the world, employing 16,000 skilled workers. In 2010, the Entertainment Software Association of Canada commissioned a study by SECOR Consulting that surveyed the industry and asked for the top three risks faced by the Canadian video game industry over the next two to five years.  Copyright and piracy concerns ranked near the bottom, well below issues such as changing industry dynamics, lack of talent, government support, rising costs, lack of funding, and outsourcing. In fact, the reference to copyright as a concern was so low – barely above concerns about an economic recession – that SECOR did not discuss it further.

A long section assessing many provisions in C-11 follows, with the conclusion that:

While the Trade Act directs the USTR to ensure that other countries provide adequate and effective protection to US IP rights, it does not define the scope of those rights. In pursuing the Trade Act’s mandate, the USTR must not interpret copyrights to mean unlimited rights tolerant of no limitations and exceptions. Rather the USTR should be guided by U.S. law in evaluating the laws of other countries.  Viewed from a U.S. law perspective, Canadian copyright laws provide adequate and effective protection to US IP rights owners. Limitations and exceptions in current Canadian law as well as proposed limitations and exceptions do not derogate from the effectiveness of these protections. Furthermore, Canadian authorities effectively enforce copyright laws. Consequently, rates of infringement in Canada are low and the markets for creative works are expanding. Placement of Canada on the Special 301 Watch List or Priority Watch List in the face of this evidence would be unjustified. It would only lead to undermining the legitimacy of the Special 301 process. br style=

28 Comments

  1. Why canada will be on the Priority watch list again
    1. Current proposed legislation does not contain a Notice and Takedown system (made to be one sided)
    2. Current proposed legislation does not contain SOPA a style article
    3. Current proposed legislation does not contain Hadopi a style article
    4. Current proposed legislation contains a separation between private and comercial copyrigtht infringment
    5. Current proposed legislation contains fair deals provision.

    Or I might just be affected by disgusted towards the current wave of Far right law proposal in Canada…

  2. U.S. Piracy Watchlist is propaganda
    The U.S. Piracy Watchlist is propaganda to get countries to change their copyright legislation to favour U.S movie and music interests. It has nothing to do with what is best for Canada or its citizens. The whole reason for the watchlist is to make the appearance of criminal behaviour so that political pressure can be used to achieve an outcome.

  3. Chad English says:

    Excellent arguments
    I was hoping that somewhere it would suggest that putting Canada on the list would serve to undermine the legitimacy of the list, and was quite happy to see it there at the end.

    Now what we really need is a “Watch List” watch list that evaluates lists, processes, and reports around the world and evaluates how legitimate they are by process and evidence.

  4. Well…. Canada does *NOT* enforce copyright law with people who privately make unauthorized copies for themselves of works that they don’t already own or otherwise already had lawful access to.

    If you ask me, however, I think that Canada could at least start to get itself out of the mess introduced by the private copying levy by amending the private copying exemption to copyright infringement so that it explicitly *excludes* making copies (even private ones) of works that happen to already be infringing on copyright (which commercial stuff being downloaded for free off the internet and not obviously being distributed by any sort of authorized agency generally is). Any private copy made would thus be made entirely at the copier’s own risk if the copier was uncertain about the infringing or non-infringing status of the work that they are copying from.

    It wouldn’t end all the problems, of course… but I think it would at least be a decent first step.

  5. @Mark
    So we shouldn’t pay a levy if the material being copied infringes on copyright?

    “Only legitimate backup copies will be subject to the private copying levy”

    your logic fails.

  6. Russell McOrmond says:

    On list because Canadian government wants to be there.
    I believe Canada is on the list because the Canadian government wants us to be there. If the government objected to the invalid listing then they would have participated in the process, and debunked the false claims abused to put us on the list.

    It is sad that the current government wants to tarnish our international reputation this way.

  7. Russell McOrmond says:

    Government enforcing civil law?
    @Mark

    The “government” should only be enforcing criminal law, and there are only a few criminal activities listed in the Copyright act. We should not be adding more activities to criminal law, and if anything should be repealing the existing section 42 and 43 which relate to some specific commercial copyright infringement.

    The activities you list are civil law, which means they are disputes between two parties and not criminal in nature. If a copyright holder wants to sue an alleged infringer, current Canadian Copyright law is beyond strong enough to enable that — with statutory damages as remedies where the potential punishment goes far beyond the harm of the infringement.

    The Canadian Government and taxpayers should not be paying for and doing the enforcement of the private rights and interests related to a civil law dispute.

  8. Private Copying Levy
    The levy was an ill-thought-out disaster from the get go. I didn’t agree with it at the time and I don’t agree that it should be changed or expanded. If the entertainment industry wants to expand the liability, then the scope of the levy should be reduced or the levy should be abolished altogether. This is kind of a “you can’t have your cake and eat it too” situation. They want to suck on the public tit for private copying, but still have all uses be illegal. This is called hypocrisy.

  9. Since Canada was placed on that list to help push Canadian copyright laws (a Minister asked through backchannels to add Canada to this list, to garner support)…why did we have to defend ourselves to get off? A Minister should have used his “backchannels” to get us off instead of having to use time and money to prove that we shouldn’t be on the list. Hell, it was proven we were put on it unjustly, we should have been taken off when that was figured out.

  10. The only thing the copying levy has done is added a tax to people using storage media for photos and video. The vast majority of “mp3 player” devices now are iPod’s and similiar solid-state devices, with only the devices that are cameras “that also happen to play music” crossing that boundary (like some camera-phones with microSD cards.) Blank media CD’s and DVD’s, people just don’t buy anymore except as throw-away copies that their kids can use on their Xbox.

    But it’s no secret that music lovers use the copying levy as an excuse to get music any way they want, be it itunes, cd’s or their friends collections. This is something that is almost exclusive to music and not videos, games and software. The next stage is “the cloud” which putting file sharing back into focus like it was in 2002. Unlike then, cloud storage is meant to be private… and cloud storage is not going to respect borders either. If someone wants to listen to foreign music not sold in Canada, they can’t because foreign iTunes stores won’t sell to Canada. People will just work around this by trading cloud accounts.

  11. Foreign music
    “If someone wants to listen to foreign music not sold in Canada, they can’t because foreign iTunes stores won’t sell to Canada.”

    Yes, but foreign Amazon sites will ship music and movies anywhere. I bought the Within Temptation – Black Symphony BluRay from Amazon.fr because it was never released on BluRay here, only DVD. Other items such as Silentium or Krypteria have never been released here in any form, but they could easily be purchased from somewhere like Amazon.fr or Amazon.de. If you’re like me, you just need someone to translate in to the respective language so you know what you’re doing.

    Now, under international law, media which is not licensed in this country is considered public domain in this country. Foreign material which has never been released/licensed here, such as smaller, more obscure European music, is public domain here and legal to acquire and use as you see fit. I prefer to purchase when possible so I can support the band, but sometimes must resort to downloading them, due to the sheer lack of availability.

  12. Irrelevant
    Chile is in the Special 301 List. Until a couple of years ago, one of the observations was that Chile’s IP law lacked a DMCA-type notice and takedown procedure. It was adopted and turned into national law a couple of years ago. Result: no removal from the Special 301 List. Among other complaints (the most relevant ones deal with pharmaceutical patents), the notice and takedown system, unlike the one in the DMCA, is judicial, which places the burden on the rightsholder insted of the ISP/content provider. It didn’t matter that adapting a non-judicial notice and takedown system would’ve been unconstitutional under Chilean law.

  13. @Martin RE: Irrelevant
    Agreed the who thing is totally irrelevant. Canada is on the watch list because our government asked to be there. The Wikileaks cables have shown that. The Special 301 list is nothing more than a political tool to put pressure on other countries to conform to a more “American-style” legislation. The arrogance of the American government never ceases to amaze me.

    That being said, justifications like this one prepared by Geist only further proves the irrelevance of the Special 301 list. Unfortunately, only for those of us who are actually paying attention. :/

  14. @Windows8: “So we shouldn’t pay a levy if the material being copied infringes on copyright?”

    More specifically, if the material infringes on copyright, it should not be getting copied in the first place. At all. Period. I strongly advocate the notion that people who copy infringing works would be doing it entirely at their own risk… and the exemption that exists for private copying, that they paid on the destination media would not suffice to give them any private copying privileges on works that are already infringing.

    That said, the levy’s purpose was never to legitimize private copying (private copying of audio works already long had an explicit exemption in the copyright act by the time the levy was introduced) – the levy was created solely to produce revenue stream from already legal private copying. My point is that I think that the exemption (and the levy) that applies to private copying not being copyright infringement should explicitly *NOT* apply to works that are already infringing on copyright, because the way things sit right now… it seems to be tolerated, and I believe that this is counterproductive to the underlying purpose of copyright, which is to offer its holder at least some assurance that nobody else would copy the work.

    This is an effectively absolute assurance that creators of works already have if they simply never release their work to anyone, and, to a slightly lesser extent, they also had it before the printing press had been invented because then copying was so error-prone and tedious, that the magnitude of difficulty associated with it kept unauthorized copying from being problematic. After the printing press had been invented, people who wanted to retain the control that they had over their works tended to self-censor, or release portions of their creations only to very small groups, rather than widely publish everything they made for the general public to enjoy. Copyright was invented as incentive for the creator to widely publish, while still enjoying a modicum of the control they formerly had. Meanwhile, society as a whole could stand to benefit from the publication of any such works.

    And ultimately, copyright exists to benefit society… it can happen to financially benefit a holder on a copyright when the work is in sufficient demand, but this is more of a side-effect of copyright in a capitalistic society than what copyright was originally designed to do. Any laws that concern copyright should, first and foremost, consider how they impact society… and only afterward attempt to balance some of the creator’s interests. If the system does not encourage the ongoing publication of new works, or if it does not encourage society to respect the proposed system, then the system is broken, and needs to be rethought.

  15. @Mark

    “And ultimately, copyright exists to benefit society…”

    In the wake of trillion dollar corporate interests, globalization and technology innovation: how has copyright benefited society in the past 10 years?

    Are you still trying to validate your point on the levy? Who is going to admit that they are “exempt” from the levy because they are using their media to copy infringing material? People will justify with or against whatever they feel is right, regardless of how the law is worded.

    We should get the religion of Kopmism recognized in Canada (http://en.wikipedia.org/wiki/Missionary_Church_of_Kopimism). It simplifies things when you separate church and state.

  16. I’m Canadian
    AND I AM A PIRATE!

  17. Windows8: It’s not that people would be somehow exempt from the levy for copying infringing material… my point with regards to the levy is that it would cover legal private copying only, and that infringing material could not be legally copied at all (even for private use). In the future, therefore, people would not be able to claim any immunity from prosecution for downloading infringing content strictly for personal use by virtue of having paid the levy because the levy would not have applied to such copying in the first place.

    That said, however.. I’m not a fan of the levy by any stretch. It’s my belief that introducing it only ended up confusing a lot people, creating a sense that Canadians were now legally entitled to copy absolutely anything, regardless of its source or copyrighted status, as long as it was strictly for “personal use only”.

    The problem with this interpretation, even if it is legally supported, is that it completely undermines the balance that copyright was originally supposed to have – giving the copyright holder some offer of exclusivity as incentive to publish, the resulting work enriching or otherwise benefiting society, which, in turn, gives society some incentive to respect the copyright for its duration, so that creators are encouraged to continue to utilize it, and in turn, so that society will continue to benefit.

    *THAT* was the goal of copyright when it was invented… and I resolutely maintain that should be its ongoing goal today.

  18. Pirates
    Har, here’s some pirates for ye, boys:

  19. U.S. is ONE of the most hated countries in the World
    U.S. is ONE of the most hated countries in the World, Canada is not. Why we should care about a list published in U.S. or why we should care about American rating agencies which downgrade countries as they please? Who the hell they think they are?

  20. copying machine
    Internet is a big copying machine, a gigantic sharing tool. Good luck to the copyrighter who are trying to make the water less wet.

  21. Why look for rational answers
    When dealing with US opinion it seems unwise to use a rational defense. If polls are to be believed, more than half of the population in the USA thinks we did not necessarily evolve from more primitive lifeforms. This is strong evidence that logical argument is an ineffective way to respond to them.

  22. Copyright reform
    Exactly right, and that is why we are badly in need of copyright reform. The “Everything Is Copyrighted!” situation we are in now (yes, 78rpm recordings from the 1930s are NOT in the Public Domain, and if CETA and/or TPP have their way – add two more decades) does absolutely NOT benefit society.

    Society will benefit from low-threshold access to works, in particular to out-of-print works, and generous Fair Use/Dealing so that existing works can be re-used and/or expanded upon.

    Back in the 1960s it took less than 1 decade to go from idea to putting a man on the Moon.

    Windows 3.1 (the one before WfW 3.11) was released less than 2 decades ago.

    How can one still justify that works need to be copyrighted for the entire lifespan of the creator, PLUS another half of a century (7 decades if the US has their way)?

    In order for copyright to be respected again, it will need to earn it; it will have to be relevant (apply only there where it has to), be fair (balance ALL stakeholder interests, including the Public whose cooperation in the fiction is needed), and be just. Currently it scores zero out of three.

  23. Add
    Was meaning to add that ENFORCING rules which by a large fraction of society are perceived as unfair and unjust will simply not work. The part of society that still lives in blissful ignorance is diminishing rapidly.

    The 301 list is more like a Badge of Honour – a sign we’re not just listening to the recording/publishing industry, and since the listening only started recently, we still have a long way to go. Let’s stay on this list, be proud of it now, and seek retribution later.

    Remember the principal you were so afraid of being sent to in grade 6? Visit him now. An old, feeble gray-haired shadow of the big man he once was. This will happen to the Big Copyright Bully too. Already he’s being passed left and right. The future for the Industry is best summed up as ‘irrelevance’. Unless thing change dramatically, and the sooner the better.

  24. Why C-11 has a lock protection provision
    Here’s a better one:

    http://tech.slashdot.org/story/12/02/23/2046209/proposed-video-copy-protection-scheme-for-html5-raises-w3c-ire

    seems there’s a plan, eh?

  25. The biggest thieves are the media companies
    The media companies do everything they can to cheat artists out of their legitimate earnings. If you added up Media Company Malfeasance it probably dwarfs losses by copying. I mean real losses, sales that don’t take place. Most copying does not equal a lost sale. The person who takes the copy never would have bought the music anyway so there is no loss. “But they get the music free!” So what. If they don’t have money to buy your music does it really matter if they hear it or not?

  26. Stephen Samuel says:

    The Harper government asked to have Canada put on the watch list. The fact that the Harper government asked to be put on does not make Canada’s inclusion legitimate.

    The Harper government does not want Canada taken off of the list, so don’t expect such a request anytime soon.

  27. Jordan 11 Concord says:

    http://www.jordanconcords2011.org/
    Detail decides success, intravenous drip castmagnificently.

  28. ethical fan says:

    Canada has millions of seeders distributing every piece of music, every movie, every book, every piece of software and every video game into America around the clock. US Home Video revenues down from $26B in 2006 to $18B today. Canadian ISPs make billions while they help their customers steal American products and to add insult to injury illegally DISTRIBUTE American products on their network back into the US. Today there are no legal remedies for the copyright owner in Canada. In regards to intellectual property Russia, Azerbaijan and China are doing better than Canada.