Last month, the Hill Times ran a special section on copyright and new media.  I contributed an op-ed (Hill Times version, homepage version) that linked copyright reform with the government’s emphasis on the Canadian economy. The column noted that one metric for assessing the effectiveness of copyright reform is to consider whether the bill uses the flexibility at international law to establish a competitive advantage when compared to our trading partners. The answer with Bill C-11 – even without the SOPA-style amendments sought by copyright lobby groups – is a mixed bag.

The column begins by discussing the public domain. For copyright watchers, New Year’s Day has become public domain day, the day when the term of copyright expires on thousands of works. While Europe celebrated the entry of James Joyce and Virginia Woolf into their public domain, Canadians noted that both authors’ copyright expired here in 1991. The term of copyright in Canada is consistent with the international standard of life of the author plus 50 years, which this year meant that the works of Ernest Hemingway and Carl Jung entered into the public domain, twenty years before they are scheduled to do so in Europe or the United States.

The Trans Pacific Partnership Agreement may place the difference in copyright term in jeopardy (a recent leaked draft indicates that it mandates extending the term of copyright), but for the moment it provides Canada with an important competitive advantage. Canadian businesses, creators and educators can rely on a far larger public domain than competitors in the U.S. and Europe, leading to new creative and commercial opportunities as well as increased access for teachers and students.

While the government has framed Bill C-11 as a policy effort to strike the right copyright balance, a crucial question in light of Prime Minister Stephen Harper’s emphasis on the Canadian economy is whether the bill uses the flexibility at international law to establish a competitive advantage when compared to our trading partners.

The answer is a mixed bag. The bill contains several unique Canadian proposals that should create some legal advantages. For example, the approach to Internet provider liability, known as notice-and-notice, strikes a better balance than the U.S. notice-and-takedown system, making Canada an attractive home for hosting Internet content. Similarly, the user generated content provision, which legalizes non-commercial remix videos, provides legal certainty to intermediaries that host content and those that create it. Rights holders have also pointed to the “enabler provision” as a made-in-Canada approach to assist enforcement efforts, though are now seeking a far broader rule.

Bill C-11’s approach to fair dealing leaves Canada in the mushy middle when it comes to copyright exceptions and limitations. The inclusion of three new exceptions – education, parody, and satire – is an improvement, but it does not go as far as trading partners such as the U.S. and Israel, which have both recognized that fair use lies at the heart of many industries that rely upon a flexible copyright system. The absence of fair use creates a competitive disadvantage for innovative Canadian businesses, who may decide to set up shop elsewhere as a result.

The biggest competitive shortcoming in Bill C-11 is also the most heavily criticized – the digital lock rules. While the criticism from consumer, education, and library groups is noteworthy, the lack of support from business and creators groups is particularly telling.

On the business side, the Business Coalition for Balanced Copyright, which includes leading technology, telecom, and Internet companies, has argued for changes to the rules, as has the Retail Council of Canada, which fears that the changes could hurt consumer confidence in the digital environment.

The Bill C-11 digital lock rules will also place some Canadian creators at a competitive disadvantage. For example, documentary filmmakers in the U.S. rely on a specific exception that permits circumvention of digital locks found on DVDs. By contrast, the Canadian approach does not feature a DVD circumvention exception, creating additional costs and legal uncertainty.

Supporters argue that the digital lock rules will create incentives for new media businesses, yet there is little evidence those rules provide a competitive advantage. Without any digital lock rules, Canadian digital music sales have grown faster than those in the U.S. for the past five consecutive years, Canadian entertainment software businesses have thrived, and a steady stream of new digital businesses such as Netflix and Rdio have entered the Canadian market, suggesting that the current law is not holding back new marketplace entrants or commercial success.  

Copyright reform may be driven by a desire to meet international standards, but global copyright law provides all countries with considerable flexibility in implementation. Identifying opportunities to create Canadian copyright competitive advantages would bring commercial and creative benefits and though Bill C-11 features several unique provisions, they are undermined by badly missing the mark on the digital lock rules.