In the decade of lobbying leading up to the reform of Canadian copyright law in 2012, the music industry had one core message: Canada needed to implement and ratify the World Intellectual Property Organization’s Internet treaties. While many education, consumer, and business groups expressed concern that the digital lock rules in the treaties would harm innovation, the music industry was insistent that the WIPO Internet treaties represented an essential component of digital copyright reform. The lobbying campaign was successful as Canada proceeded to implement and ratify the treaties. The legislation is still relatively new, but in a stunning reversal, the head of Music Canada now says that the drafters of the WIPO Internet Treaties were just guessing and suggests that they guessed wrong.
The intensity of the lobbying for the WIPO Internet treaties is difficult to overstate. In 2004, Billboard reported that 26 Canadian industry groups were pressuring the government to ratify the treaties. In 2006, Graham Henderson, president of the Canadian Recording Industry Association (later Music Canada), wrote an op-ed in the National Post titled “Protect Artists: Reform Canada’s Copyright Laws” which argued that:
That’s why adopting the World Intellectual Property Organization (WIPO) treaties into law, something Canada committed to do nearly a decade ago, is so important. WIPO is about providing appropriate protections for intellectual property in the Internet age. Adopting it as part of the Canadian Copyright Act will allow musicians to freely give away their music as a promotional device if they – along with their financial backers – feel it is in their best interests. However, for artists who want to be paid for their time and hard work, WIPO legislation will protect their right to keep people from taking their music without compensation.
As the government was preparing to introduce copyright reform in 2010, Henderson told the Standing Committee on Canadian Heritage:
I would argue that to simply, as a very baseline, implement the intellectual property treaties as contemplated by, for example, Bill C-61, or before that Bill C-60, would be the first step on that road.
Once the bill was introduced, Henderson urged its passage, telling the Senate committee studying the bill that the approach was just what the creative sector needed:
In concluding, Bill C-11 has been drafted, in my view, to meet the government’s objectives of protecting the creative industries, combatting piracy, and encouraging productivity and innovation in Canada’s vital creative sector.
After it was enacted, Henderson again focused on the WIPO Internet treaties in congratulating the government:
We commend the government and Canadian Heritage Minister James Moore in particular, for their tenacity in pursuing a modern copyright framework and legislation that will enable Canada to ratify the World Intellectual Property Organization Internet Treaties.
Given the unqualified support for years for the WIPO Internet treaties, reversing course is simply shocking. In a speech to the Economic Club of Canada last month, Henderson characterized the creation of the WIPO Internet Treaties in the following way:
The people setting the rules for our world were well-intentioned and clever; but the reality is that they were guessing. Now there is nothing wrong with guessing. We all make educated guesses on which we base our actions. But the beauty of our world is that with the passage of time and the accumulation of experience, we have the luxury of reassessing our situation, and adapting our behaviours when those first guesses clearly turn out to have been ill-founded. We have now had 20 years of experience with those early WIPO guesses. How are we doing?
The remainder of the speech tries to make the case that the drafters guessed wrong. Henderson may have spent years lobbying for the treaties, but he now argues that “everything would come down to the question of balance” and that “very quickly, fissures began to appear” with benefits to intermediaries and losses to creators. All of this leads to the claim that there is a “value gap”, which he defines as “the gross mismatch between the volume of music being enjoyed by consumers and the revenues being returned to the music community.”
The decision to criticize the WIPO Internet treaties raises several issues. First, it is striking to see Henderson now talk about the need for balance in implementing the treaties. That is exactly what educators, librarians, consumer groups, and many innovative businesses argued in 2010 when the reform bill was introduced. Simply put, there was little balance in the bill’s digital lock provisions, which remain among the most restrictive in the world and badly undermine the traditional copyright balance in the digital world. This was recognized during the committee review of the bill as the Liberals supported an amendment to expand the digital lock exceptions to cover circumventions for all lawful purposes. Liberal MP Geoff Regan (now Speaker of the House) noted that “what the government seems to want to do is preserve old models and ignore the fact that we have moved into a digital world.” Regan cited comments from software developers, librarians and archivists who all warned of the dangers of overly restrictive digital lock rules.
While Canadians can freely exercise their fair dealing rights in the analog world, the 2012 reforms went far beyond the WIPO treaty requirements by creating unnecessary restrictions on fair dealing in the digital environment. To borrow Henderson’s phrase, this creates a “fair dealing gap”, where there is a gross mismatch between user rights in the analog world and the digital world. The fair dealing gap should be addressed in 2017 by creating a long overdue fair dealing exception for the digital lock rules.
Second, the claims that the WIPO Internet treaties led to an unfair balance favouring technology companies simply does not apply in Canada (if anywhere). Canada is not the United States. We did not implement the DMCA notice-and-takedown system nor grant safe harbours from liability in 1998. The Supreme Court of Canada ruled on ISP liability in 2004 in SOCAN v. CAIP, but that decision was not based on digital copyright reforms. The 2012 reforms include some safe harbours, but not before the industry and creators received the right to forward an unlimited number of notices to Internet users at no cost through the notice-and-notice rules, a new enabler provision to make it easier to target piracy websites, and the restrictive digital lock rules. In 2015, the government also gave the music industry a copyright term extension for sound recordings with little public debate or consultation. In other words, Henderson’s claim that “policy-making regarding copyright law continues to be driven by the popular mythology that digital technologies and platforms produce lucrative new opportunities for the creative economy” is not reflective of the Canadian experience.
Third, unlike the fair dealing gap which is the result of legislative reform, the so-called “value gap” has nothing to do with legislative change. The industry frustration with payments for streaming services are not a function of the law, but rather based on revenue sharing from advertising. The concern with revenues from Internet advertising are not limited to music – just ask the newspaper industry – but reflect growth of the business, not a problem with the law. The industry is also concerned with a Copyright Board ruling on Tariff 8, but that case is before the federal courts and reflects the decision of the Board, not legal reforms.
Music Canada may wish to paint the Canadian and U.S. digital experiences as the same, but the reality is that they are different. Canada did not enact the DMCA in 1998 nor create the quid pro quo that is suggested in Henderson’s speech. Rather, it gave Music Canada what it asked for, implementing and ratifying the WIPO Internet treaties in an overly restrictive manner that created a fair dealing gap that persists to this day. If the industry wishes to re-examine the decision to ratify those treaties on the basis that it was all just a wrong guess, the starting point would be to fix the imbalance on fair dealing in the analog and digital worlds that has undermined Canadian innovation and the commitment to balance found in copyright law.