The case raised a wide range of legal issues from the impartiality of the proposed arbitration provider (a U.S. firm that had ceased accepting new consumer arbitrations after allegations of "serious impropriety") to the applicability of an Ontario consumer protection statute. But the heart of the case was whether consumers can click away their class action rights when they agree to online contracts mandating that disputes be resolved by arbitration.

The use of such clauses has been commonplace among many businesses that are willing to trade the higher expenses associated with a handful of individual arbitrations for the threat of a big payout in a class action lawsuit.  From businesses' perspective, the math makes sense: class actions hold the prospect of bringing together thousands of aggrieved consumers who may individually receive less, but collectively could cost the company far more.

Although quite common, contracting out of class action rights has long been a source of frustration for consumers and consumer advocates.  Conventional contract analysis posits that businesses and consumers have an equal opportunity to negotiate a satisfactory contract. Yet the practical reality is that online contracts are rarely, if ever, the product of actual negotiation.  Rather, businesses present the lengthy terms and conditions - often buried behind a link or unreadable fine print - and consumers have little choice but to accept if they want the product or service.

The Ontario government recognized the inequity of the business-consumer relationship in 2002, when it enacted the Consumer Protection Act, which outlawed mandatory arbitration clauses in consumer contracts.  The reasoning was simple: individual consumer disputes are rarely financially viable as independent legal actions and only make sense if aggregated as a class action.

Applying the law to Andrews' situation and those similarly facing the Dell arbitration clause, the unanimous court was clearly persuaded that arbitration was not an option, concluding "the choice is not between arbitration and class proceeding; the real choice is between clothing Dell with immunity from liability for defective goods sold to non-consumers and giving those purchasers the same day in court afforded to consumers by way of the class proceeding."

This latest case represents a major win for Canadian consumer groups, who have tangled with Dell before in a case that ultimately went to the Supreme Court of Canada. Businesses operating online may understandably prefer to limit their likely liability through arbitration, but the resounding response from the Ontario legislature and courts indicates that it should not be possible to force consumers to click away their class action rights.

On the other hand, UK Minister of State, Department for Business, Innovation and Skills David Lammy provided the House of Commons with his government's official position on ACTA secrecy:

It is current UK policy on the Anti-Counterfeiting Trade Agreement to seek the agreement of our negotiating partners to publish the draft text. However, it is the practice in trade negotiations that working documents are not disclosed without the consent of all the negotiating parties. Not all parties currently agree to the release of the Anti-Counterfeiting Trade Agreement (ACTA) draft text. My officials continue to press for greater transparency with our negotiating partners.

Not to be forgotten, Bridges Weekly reports on mounting concerns in the developing world over ACTA.  While an official from the Chamber of Commerce argues that it is not desirable to address ACTA issues at WIPO, a developing country trade diplomat acknowledges that the developing world will face pressure to adopt ACTA-like provisions and that the process sounds like "TRIPs-plus-plus-plus."

Moreover, as I pointed out last summer, the IFPI's global data further supports the conclusion that the Canadian digital music market is not the laggard that some would have the public believe.  As of last year, Canada's digital market stood 7th worldwide, while ranking 6th for all recorded music - in other words, about what you would expect.  Of the top 20 global markets for recorded music, the IFPI said that Canada ranked 5th for the percentage of digital sales. 

Indeed, digital music sales as a percentage of total sales in Canada is ahead of every major European country. The U.S. may lead Canada (though growing at a far slower rate), but the IFPI reported that Canada is ahead of France, Britain, Spain, Belgium, Italy, Germany, Switzerland, the Netherlands, Austria, Sweden, Czech Republic, Finland, Greece, Hungary, Norway, Poland, Portugal, and Russia.  Canada also leads countries such as Australia, New Zealand, Hong Kong, Singapore, Taiwan, Mexico, Argentina, Brazil, and South Africa.  The global music market may be facing difficult times, but the industry's own data confirms that placing the blame on Canadian copyright laws is quite clearly misplaced.

Regardless of the actual quality of the evidence gathering of DtecNet, copyright infringement is not a straight ‘yes’ or ‘no’ question. The Court has had to examine a very significant quantity of technical and legal detail over dozens of pages in this judgment in order to determine whether iiNet users, and how often iiNet users, infringe copyright by use of the BitTorrent system. The respondent had no such guidance before these proceedings came to be heard. The respondent apparently did not properly understand how the evidence of infringements underlying the AFACT Notices was gathered. The respondent was understandably reluctant to allege copyright infringement and terminate based on that allegation. However, the reasonableness of terminating subscribers on the basis of non-payment of fees does not dictate that warning and termination on the basis of AFACT Notices was equally reasonable. Unlike an allegation of copyright infringement, the respondent did not need a third party to provide evidence that its subscribers had not paid their fees before taking action to terminate an account for such reason.

After rejecting claims that Australian copyright law envisages termination as part of that law's safe harbour provisions, Justice Cowdroy turns to claims that ISPs have the technical capability to cut off access:

One need only consider the lengthy, complex and necessary deliberations of the Court upon the question of primary infringement to appreciate that the nature of copyright infringements within the BitTorrent system, and the concept of ‘repeat infringer’, are not self-evident. It is highly problematic to conclude that such issues ought to be decided by a party, such as the respondent, rather than a court. Copyright infringement is not a simple issue. Such problems as identified are not insurmountable, but they do weigh against a finding that the respondent could conclusively decide that infringement had occurred and that it had the relevant power to prevent by warning, suspension or termination of subscriber accounts, even if it had the technical capability to do so. Even if feasible, such a scheme would likely lead to significant expense incurred by the respondent, as was alluded to by Mr Malone in his second affidavit. Of course significant expense was likely to have been incurred by the respondents in Kazaa, but that was in the context of those respondents having provided the ‘means’ of infringement. The respondent has not done so in these proceedings, and thus the expense and complexity of the imposition of responsibility for a notice and termination scheme on them manifestly militates against the conclusion that such scheme is a relevant power to prevent.

All of these leads to an unambiguous conclusion from the Court:

The Court does not consider that warning and termination of subscriber accounts on the basis of AFACT Notices is a reasonable step, and further, that it would constitute a relevant power to prevent the infringements occurring. The respondent did not create the ‘means’ to infringe copyright. It was the constituent parts of the BitTorrent system which has given rise to the infringements. Consequently, it cannot be incumbent upon the respondent to stop the infringements. Even if it was incumbent upon the respondent, that does not lead to the conclusion that it was a reasonable step for it to take action.

...

Obviously termination of the subscriber accounts would constitute a step that would prevent the person or persons from infringing (at least with that ISP), but it would also prevent that person or persons from using the internet for all the non-infringing uses to which the internet may be put and to which they have contracted with the respondent and provided consideration. Given that Wilcox J had no desire to order the respondents in Kazaa to shut down their system where he found the predominant use was to infringe copyright, it would seem that termination of accounts in the circumstances of unproven and sporadic use, at least absent judicial consideration of the extent of the infringement on each account, would be unreasonable. The words of Higgins J in Adelaide Corporation are apposite. While termination of accounts would stop the infringement, it would do much more and in the circumstances it would not be reasonable. Consequently, warning and termination/suspension does not relevantly constitute a power to prevent infringement on the part of the respondent.

When combined with today's reports that Australia has opposed three strikes as part of the ACTA talks, there is considerable good news on the copyright front coming from down under.

The NFB may never replace YouTube in the minds of most when it comes to Internet video, but a series of innovations have highlighted the benefits of an open distribution model and the potential for Canadian content to reach a global audience online.

Last year, just months before the NFB celebrated its 70th anniversary, it launched the NFB Screening Room, an online portal designed to make its films more readily accessible to Canadians and interested viewers around the world.  To meet its objective, it committed to be as open, transparent, and accessible as possible, including making the films freely available and embeddable on third party websites.

In January 2009, the site started with 500 films.  Today, the number of available films has nearly tripled, with almost 1,500 films, clips, and trailers.  The growing selection has been accompanied by a massive increase in audience. There have been 3.7 million online film views over the past year - 2.2 million from Canada and 1.5 million from the rest of the world.  That number is set to continue to grow as daily views have jumped from 3,000 per day in January 2009 to more than 20,000 film views per day in January 2010.

The site also uses mobile technology to increase public access and exposure to Canadian films.  In October 2009, the NFB launched an iPhone application that has been downloaded more than 170,000 times and led to more than 500,000 film views on the ubiquitous mobile device.

Interestingly, the NFB reports the most popular viewing time is in the evening hours, suggesting that watching a film online is an effective substitute for conventional television programming.   

The NFB also rolled out new participative initiatives.  For example, it launched an "open content" project called GDP, an interactive one-year effort to document the economic crisis. The NFB invited Canadians to submit their own videos discussing the effects of the economic downturn, leading to more than 25 videos along with hundreds of photos and text comments.

The NFB success story is noteworthy for two reasons beyond the impressive statistics.  First, the project is instructive from a public policy perspective.  As the NFB’s content manager recently noted, the Screening Room “puts the films back in front of the people who paid for them in the first place - Canadian taxpayers.” 

That philosophy ought to be emulated by other publicly funded cultural bodies. For example, CBC.ca recently began promoting an online licensing system that charges sites as much as $250 per month to embed a single article on a website.  While the desire for additional revenue is understandable, the goal for a publicly funded body surely must be to make public access the priority, rather than to garner small incremental revenues.

Second, the NFB has demonstrated the potential of the Internet and new media to attract new audiences for Canadian content.  The old regulatory models premised on scarcity that led to Canadian content requirements are disappearing quickly, replaced by a world of abundance in which artificial barriers do little to keep content out. 

As the NFB recognized, remaining relevant in that world requires ensuring your work is accessible as possible. While there are unquestionably risks, there are tremendous potential benefits for Canadian creators and the export of Canadian culture.

Elected Officials

• Senator Ron Wyden, United States
• Senators Bernie Sanders and Sherrod Brown, United States
• Senators Pat Leahy and Arlen Specter, United States
• Rep. Mike Doyle, United States
• Rep. Zoe Lofgren, United States
• Nicolas Dupont-Aignan, France
• MP Tom Watson, United Kingdom
• UK Liberal Democrats party
• Minister Åsa Torstensson, Sweden
• European Parliament Resolution
• MEP Jens Holms, Sweden
• MP Clare Curran, New Zealand (second time) (third time)
• Peter Dunne, New Zealand
• MP Charlie Angus, Canada (editorial)

Public Interest Group Letters

• Library Content Alliance
• Oxfam
• EFF, Essential Action, KEI, PK, Salud y Farmacos, TACD, UAEM, PIRG
• Worldwide NGO Coalition
• European Telecommunications Network Operators' Association
• KEI and PK
• KEI

So what can the general public do?  One thing is to learn more and work together with groups already active on ACTA.  These include:

• ACTA.net.nz (New Zealand)
  
• EFF
  
• Public Knowledge
  
• FFII
  
• KEI
  
• OpenACTA
• IP Justice
• ACTAActionNow!
• CIPPIC (Canada)
• Electronic Frontiers Australia (Australia)
  
• La Quadrature Du Net (France)
• Movimento ScambioEtico (Italy)
• Bits of Freedom (Netherlands)
• Open Rights Group (UK)

Every individual concerned with ACTA can also speak out.  Write to your local MP or national leader or participate in the specific activities sponsored by some of the organizations listed above.  These include the EFF ACTA Action Alert, the effort to encourage UK MPs to support the cross-party motion for ACTA transparency, and the signing of the A2K ACTA Petition. 

While Canadian officials may put on a brave face regarding the prospect of ACTA-inspired domestic reforms, the reality is that behind-the-scenes this has been a major concern for officials since before ACTA was officially unveiled.  I recently obtained under the Access to Information Act a copy of a response to the U.S. ACTA discussion paper from 2007 written by Doug George, who until recently led Canada's delegation on ACTA at DFAIT.  George's response takes great pains to emphasize the differences between countries and the need to take this into account:

While there may be a need to coordinate our efforts at the international level to fight counterfeiting and piracy, including through the negotiation of an ACTA, countries have implemented different systems and legislation to address this issue.  This needs to be taken into account in our discussions. For instance, the role of governments versus rights holders in enforcing IPR can vary greatly among the various systems, and specific systems for implementation have developed in different directions.

Canada's fears have quite obviously been realized as the vision of ACTA proponents is a one-size fits all solution based on the U.S. model of IP enforcement.  This will, by its very definition, require domestic change in many countries.

As for the specifics of domestic reforms, they depend on the country. Countries without statutory damages would need to add those to their laws.  Countries without DMCA-style anti-circumvention rules or a notice-and-takedown system would require those changes.  Countries without anti-camcording rules or new border enforcement measures or a host of other ACTA-related provisions would need to address those concerns.  There has been some preliminary analysis of possible changes in various countries. These include:

• Global (Gwen Hinze)
• Global (Hinze)
• Global (Hinze and Eddan Katz)
• United States (Katz)
• United States (Jamie Love)
• European Union (FFII)
• European Unon (FFII)
• Australia (Kim Weatherall)
• New Zealand (Jonathon Penney)
• New Zealand (Cyberlaw.org)
• Canada (CIPPIC)
• Canada (CIPPIC)
• France (La Quadrature du Net)
• South Korea (IP Left)

Not to be forgotten are those countries that are not part of the ACTA discussions.  The exclusion of many major trading partners (and the alleged leading sources of counterfeit products) are a major story since those countries will likely also face pressure to implement ACTA despite not having had the opportunity to participate in the talks.  I discussed that issue - and the need for developing countries to demand a seat at the table - last year in this piece.

• Senators Bernie Sanders and Sherrod Brown, United States
• Rep. Mike Doyle, United States
• Rep. Zoe Lofgren, United States
• Nicolas Dupont-Aignan, France
• Tom Watson (Labour), John Whittingdale (Conservative), Lindsay Hoyle (Labour), and Don Foster (Lib Democrats), United Kingdom
• Minister Åsa Torstensson, Sweden
• MEP Jens Holms, Sweden
• MEP Axel Voss, Germany
• MP Clare Curran, New Zealand
• Peter Dunne, New Zealand
• MP Charlie Angus, Canada

Moreover, the European Parliament has voted for a proposal to bring more transparency and public access to documents.  The resolution includes specific language about the Anti-Counterfeiting Trade Agreement.  In particular, it states:

Acting in accordance with Article 255(1) of the EC Treaty, the European Commission should immediately make all documents related to the ongoing international negotiations on the Anti-Counterfeiting Trade Agreement (ACTA) publicly available.

The justification for the language is:

The Anti-Counterfeiting Trade Agreement (ACTA) will contain a new international benchmark for legal frameworks on what is termed intellectual property right enforcement. The content as known to the public is clearly legislative in character. Further, the Council confirms that ACTA includes civil enforcement and criminal law measures. Since there can not be secret objectives regarding legislation in a democracy, the principles established in the ECJ Turco case must be upheld.

In addition to elected officials and parliamentary resolutions, numerous public interest groups from around the world have joined the call for greater ACTA transparency (current joint declaration is one example).  Business groups have also attacked the secrecy associated with the talks.

2.   The Sources of ACTA Secrecy

Identifying the sources of ACTA secrecy are alternately easy and difficult. The confidentiality statement that forms the basis of ACTA confidentiality has been leaked and makes it clear that the U.S. set the initial terms of secrecy.  A more detailed discussion can be found in several documents responding to access to information/freedom of information requests.  For example, the Declaration of Stanford McCoy of the USTR on ACTA disclosure of documents provides the U.S. perspective, while European Council response on ACTA transparency and disclosure of documents provides the EU view (second EU document here).

While those are the official positions, some countries have provided limited access to "ACTA Insiders."  The U.S. made the Internet chapter available under non-disclosure agreement to 42 ACTA insiders in 2009.  Canada intended to create an insider advisory group, but abandoned those plans after details of the possible members was obtained under the Access to Information Act and reported in the press.

More difficult is to identify who currently supports ACTA secrecy. According to an article in the EU Observer, roughly half of the 27 EU Member States support increased ACTA transparency, suggesting that making content publicly available would increase public confidence.  There have been similar reports in the UK, New Zealand, Australia, and Canada. That still leaves the Asian countries and the U.S. as potential holdouts (USTR head Ron Kirk has reportedly said that countries would walk away from the treaty if the text were made available).

3.   Is ACTA Secrecy Standard?

The third major issue is whether the ACTA secrecy is commonplace.  Last fall, the ACTA partners released a joint statement arguing that "it is accepted practice during trade negotiations among sovereign states to not share negotiating texts with the public at large, particularly at earlier stages of the negotiation."  Yet a closer examination of similar international IP negotiations reveals that the ACTA approach is not standard.

U.S. NGO groups have made a strong case for how ACTA's lack of transparency is out-of-step with many other global norm setting exercises.  With regard to international fora, they note that the WTO, WIPO, WHO, UNCITRAL, UNIDROIT, UNCTAD, OECD, Hague Conference on Private International Law, and an assortment of other conventions have all been far more open than ACTA.  For example, the WIPO Internet treaties, which offer the closest substantive parallel to the ACTA Internet provisions, were by comparison very transparent:

The two WIPO Internet Treaties (WCT and WPPT) were negotiated in a completely open meeting at the Geneva Convention Center. The public was allowed to attend without accreditation. The draft texts for the WCT and the WPPT were public, and the U.S. government requested comments on the draft texts, which were available, among other places, from the U.S. Copyright Office.

Two other documents offer similar reviews of the transparency of negotiation documents and opportunities for public participation.  Moreover, Jamie Love recently posted a comparison of the level of transparency during the FTAA negotiations with the ACTA talks.  Several drafts of the FTAA agreement were released to the public as the negotiations were ongoing.

The inescapable conclusion is that the ACTA approach is hardly standard.  Rather, it represents a major shift toward greater secrecy in the negotiation of international treaties on intellectual property in an obvious attempt to avoid public participation and scrutiny.