The next most serious problem is the courts’ narrow interpretation of “fair use.” The fair use defense to copyright infringement permits the copying of short excerpts from a copyrighted work without a license, since the transaction costs of negotiating a license for a short excerpt would tend to exceed the value of the license. The problem is that the boundaries of fair use are ill defined, and copyright owners try to narrow them as much as possible, insisting for example that even minute excerpts from a film cannot be reproduced without a license. Intellectual creativity in fact if not in legend is rarely a matter of creation ex nihilo; it is much more often incremental improvement on existing, often copyrighted, work, so that a narrow interpretation of fair use can have very damaging effects on creativity. This is not widely recognized.
Canada actually fares well on both of these issues – for now. Canadian copyright term is shorter than the U.S. and the Supreme Court of Canada has emphasized the need for a broad interpretation of fair dealing. The danger lies in the continuing pressures to extend our term and to narrowly interpret the Court.