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Fearing Legalized P2P Downloading, CRIA Declares War on Private Copying Levy

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Saturday September 15, 2007
The Canadian Recording Industry Association this week quietly filed documents in the Federal Court of Appeal that will likely shock many in the industry.  CRIA, which spent more than 15 years lobbying for the creation of the private copying levy, is now fighting to eliminate the application of the levy on the Apple iPod since it believes that the Copyright Board of Canada's recent decision to allow a proposed tariff on iPods to proceed "broadens the scope of the private copying exception to avoid making illegal file sharers liable for infringement." 

Given that CRIA's members collect millions from the private copying levy, the decision to oppose its expansion may come as a surprise.  Yet the move reflects a reality that CRIA has previously been loath to acknowledge - the Copyright Board has developed jurisprudence that provides a strong argument that downloading music on peer-to-peer networks is lawful in Canada.  Indeed, CRIA President Graham Henderson provides a roadmap for the argument in his affidavit:

"First, the Board has stated, in obiter dicta, on several occasions that the Private Copying regime legalizes copying for the private use of the person making the copy, regardless of whether the source is non-infringing or not.  Therefore, according to the Board, downloading an infringing track from the Internet is not infringing, as long as the downloaded copy is made onto an 'audio recording medium'...

Second, also in obiter dicta, the Board stated that the private copying exception in Section 80 is not conditioned on the existence of a tariff to collect royalties covering the medium onto which copies are made.

Third, in combination with the aforementioned obiter dicta in the Board's other decisions, the Decision [the iPod decision] could potentially be interpreted to allow the copying of music files from any source - whether legitimate or illegitimate - onto any type of device ordinarily used by individuals to copy music, such as personal computers..."

While Henderson and CRIA make it clear that they disagree with this interpretation, they are obviously sufficiently concerned that it reflects Canadian law that they have burned their remaining bridges with Canadian music in order to try to persuade the Federal Court of Appeal to allow them to intervene in iPod hearings.   In fact, with the Canadian labels having left the organization, CRIA has now:
  • irrevocably split with the Canadian Private Copying Collective (on which CRIA General Counsel Richard Pfohl serves as a member of the board of directors), telling the court that "CRIA Members do not control the CPCC with respect to decisions to file particular tariffs.  And in the case at hand, CRIA did not have the authority or means to prevent the CPCC from filing the [iPod levy tariff]."
  • openly acknowledged that its concerns rest with foreign artists, as it complains about the preferential treatment for Canadian artists under the private copying system and argues that "this has meant that under the Private Copying regime, CRIA Members receive compensation for only a small fraction of their recordings that are copied."
CRIA's attempt to intervene is somewhat odd, not only because it represents a public acknowledgement of the argument for legalized P2P in Canada, but also because CRIA's intended arguments if granted leave to intervene are easily rebutted.  The Henderson affidavit outlines the organization's seven arguments:
  1. the Decision failed to consider the fundamental importance of exclusive rights in Canadian copyright law [not true - CRIA itself sought the creation of the levy to grant consumers a license to make personal copies].
  2. the Board failed to consider the implications of the combination of the Decision with statements in its prior decisions to the effect that the Private Copying regime legalizes copying for the private use of the person making the copy, regardless of whether the source is a non-infringing copy or subject to a levy. [in other words, the Board's decision makes it clear that P2P downloading is legal]
  3. by broadening the scope of the exception to devices never intended by Parliament to be covered, the Board has potentially and inappropriately transformed the 'private copying' exception into a public license [yet in 1996 CRIA told a House of Commons committee that "the proposed private copying regimes should not create yet another exemption, but should be structured as a statutory license."]
  4. the Decision failed to adequately consider and apply policy principles related to copyright. Any decision or combination of decisions that exempts unauthorized P2P downloading from infringement would be contrary to the public interest because it serves as a disincentive to investment in the production of music and the dissemination of legitimate copies of music [not true - a compensation system for P2P is arguably in the public interest as it ensures that artists get paid, a position supported by Canadian musicians].
  5. the Decision failed to adequately consider and apply the specific policy principles behind the private copying exception [not true - the Decision is nothing but the application of the policy principle that the levy is technology neutral].
  6. the Board was wrong to broaden the scope of the private copying exception to avoid making illegal file sharers liable for infringement [the clearest statement from CRIA that private copying as construed by the Copyright Board legalizes P2P].
  7. the Decision failed to consider Canada's international and bilateral treaty obligations related to copyright and related rights [an issue for Parliament, not the Copyright Board or the Federal Court].

Hearings in the iPod case are not likely to occur until 2008, yet these filings from CRIA will reverberate long after that hearing concludes.  It is not every day that the recording industry acknowledges an argument widely known within legal circles - downloading music in Canada for personal purposes is arguably legal as it is compensated activity covered by the private copying levy.

Update: Ars Technica and Billboard cover the story. 

Comments (29)add comment

R. Bassett Jr. said:

Curious
How does all this relate to transferring one's DVD (or VHS) collection to one's computer, for sharing over one's home network, being that video is similar to audio material?

I don't know about the rest of the world, but after I purchase a DVD or CD, I personally have absolutely no intention of ever purchasing that same media again in the future. Consequently, putting my DVDs on the computer saves certain little fingers in my family from ruining the originals and generally negates the need for a replacement - though, there are exceptions, such as one of a certain special edition DVD set I own that magically no longer works after perhaps the fourth time it played... That truly IS some industrial light and magic there...

Anyhow, if one day I were to be charged for infringement, I think I'd file counter suit for compensation for the hundreds of hours (as well as electricity) that was required to transcode all of my media, because a reasonable commercial alternative was not available for all the copyrighted audio/video media that I owned at the time.

Indeed, what truly baffles me is that this is 2007, where "the future" surrounds us, yet we still can't walk into a retailer, access a pay-to-download media cache, choose our files, pay via credit card and walk out a happy customer - DRM free, so we are also afforded the commercial courtesy to use what ever device we please to play the media (which is also fair to hardware vendors, I might add).

In the end, I'd prefer to take the money being spent on these issues and use to perhaps feed a few million of the billion or starving people on this planet, because in the end all of these matters are so disgustingly trivial that I am quite nearly ashamed to be a North American; please, can be bicker over more pointless crap? It's not as if there is anything better to do with the one chance we'll ever get at existance...
September 15, 2007

Alan said:

...
Is there an electronic copy of Mr. Henderson's affidavit available online?

The Federal Court of Appeal proceeding in which CRIA's motion to intervene was filed is A-369-07: [ link ]
[ link ]

Alan
September 15, 2007

carl said:

mr
Is there an English version (non-lawyerese) of this blog entry?
September 16, 2007

Mark said:

...
Ultimately putting a work on a P2P network amounts to copying it for uses that exceed personal use. I'm all for allowing people to make copies of the content they have for personal use (I think copies of all copyrighted works for personal use should be exempt from infringement, not just musical works by the way), but an official legalizing of P2P sharing of copyrighted works totally pulls the rug out from under copyright holders and strikes me as a catastrophic mistake.
September 16, 2007

Mik said:

Mr.
I don't care what the RIAA, MPIAA, or the CRIA says or does. I'm going to copy what I've bought as I see fit, in any way I please, as often as I want, to whatever media I please. And there's not a bloody thing they can do about it.
September 16, 2007

bob said:

The Back Story
The distribution of private copying levy monies is interesting. It seems that between 'administration', start up costs etc there has not been the a lot of $$ going back to the artists.

What a surprise - the bottom gets screwed again.
September 16, 2007

hiro81 said:

...
Thank you for the news update Micheal, really appreciate your continued coverage of attempts by CRIA to curtail individual rights and freedoms. I was particular glad to hear that the Canadian recording labels have en mass left CRIA..
September 17, 2007

fedge said:

...
Copying your own "bought" CDs to whatever device has always been practiced and regardless of what law or levy exists, it is perfectly fine to do so.

Wholesale downloading of music from the internet or something like a friend "lending" you their hard drive is another matter entirely. I do believe that the levy is more than capable of compensating the CRIA member labels for any lost revenue though I don't think *morally* it's the "right" thing to do.

However, the CRIA/RIAA labels, with their band of helpers like Media Defender, have not earned the respect of its custumers with all the lawsuits from Warner, Universal, EMI & Sony BMG. As such, it's very, very rare I'd pay for a CD from those labels and after such fiascos as EMI's "Copy Control" and Sony BMG's own DRM with added root kit, I encourage Canadians to download as much music flowing from Warner, Universal, EMI & Sony BMG as possible. After all, you've already paid for it via the levy.

Warner, Universal, EMI & Sony BMG are already culpable in criminal actions. They are utter jackals and until they show respect to their customers, they ought not hope to receive any from them...
September 17, 2007

a guest said:

...
"In the end, I'd prefer to take the money being spent on these issues and use to perhaps feed a few million of the billion or starving people on this planet, because in the end all of these matters are so disgustingly trivial that I am quite nearly ashamed to be a North American; please, can be bicker over more pointless crap? It's not as if there is anything better to do with the one chance we'll ever get at existance..."

This isn't a pointless issue. This issue is directly related to a much bigger issue called Freedom of Speech. Those that quitely oppose Freedom of Speech will try to stifle it in the name of preventing copyright infringement (among other things).

Once all these issues are beaten down, and we can speak freely, hold our leaders accountable and discuss productive ways to fix everything else like starvation.

September 17, 2007

Chris Brand said:

Some responses
@Curious : The Private Copying regime specifically applies only to audio, not to video.

@Mark : I've yet to hear an argument (other than wishful thinking) that p2p *uploading* might be legal in Canada. It's only *downloading* (in some circumstances) that may be legalized (and paid for) by the Private Copying levy.
The interesting thing with Private Copying is that the legality of your private copy is unaffected by whether the source of the private copy you make is legal.

@fedge : the levy is only paid to Canadians, and the CRIA has very few (if any?) Canadian members, so the CRIA's members probably get very little from it. So the levy you pay that arguably legalizes your downloading of the CRIA's members actually goes to Canadian musicians rather than the people who's music you copied. Somehow that seems fitting...
September 17, 2007

fairnhite451 said:

An object lesson
A better illustration of the adage "Be careful what you wish for" may never be demonstrated to the public in our lifetime.

Too bad Mr. Henderson, but the Canadian citizenry, with the aid of our courts, have taken the levy you (well, not you personally, but your organization) rammed down our throats years ago, and turned it to our advantage.

Next time you're being quoted for an article and you choose to outline the "evils of p2p downloading", how about admitting that you made a giant mistake, and you'd like to give back the $200 million dollars to the paying public, because you had no idea it would turn out quite like this?

heh.

"Just desserts" anyone?
September 17, 2007

mhaman said:

...
I have said it many times in the past, but I support the levy simply because it removes so much doubt. Thanks to the CRIA and this great blog, the situation is becoming even more clear. The C/RIAA reverses their previous positions based on American politics and how their american lawyers want to sue Canadians randomly.

This system might not be the best one, but it is the most fair and causes the least amount of legal fuss. The American bands aren't making massive cash on those 20,000 lawsuits RIAA filed there; the lawyers do, and the "administration" does. You know, all those "copyright owners" that include the pay chain for everyone but the artists and the customers.

While henderson is on his kick for honesty, how about they finally drop the C from RIAA?
September 17, 2007

An artist said:

...
Anyone of you want to guess how much of the $200 million actually went to singers and songwriters, or even the record companies that have lost so much due to downloading? Well the $200 million gets reduced by administration charges and then spread out among a wide range of shareholders. Ask yourself: Does it compensate the artist for you freely taking their music? Don't musicians and artists have as much a right to earn a living doing their craft as you do yours?
September 17, 2007

mhaman said:

...
An artist wrote: "Anyone of you want to guess how much of the $200 million actually went to singers and songwriters, or even the record companies that have lost so much due to downloading? Well the $200 million gets reduced by administration charges and then spread out among a wide range of shareholders. Ask yourself: Does it compensate the artist for you freely taking their music? Don't musicians and artists have as much a right to earn a living doing their craft as you do yours?"

Oh please. Artists make money on more than cd sales. They sign the contracts with the record companies, and if they don't get paid it isn't the fault of the general public. Furthermore, there is no guarantee that your "art" is worth paying for, or that they price that your record label arbitrarily assigns to it has anything that resembles a fair price.

On top of that, you get paid several times over for your "art" when people damage their disks. Should you be compensated twice for your art because a dick drops on the floor?

I have no issue with paying artists. The levy isn't for that, the levy is there to pay off your lawyers so they don't randomly attack people like the way you are doing here. You have 0 proof that anyone has taken anything of yours. You have your fear mongering and little else.

And no, I don't think all art is worth paying for. The stuff that is, I pay for. I also believe I have the right to shop around and get the best price. No, artists are not guaranteed any amount they wish for. I shop around for parts for the car; I will continue to do so for music as well.

On top of that I will download whatever I wish, whenever I wish. By download I mean eMusic, and if you don't publish your music there then that is entirely your own fault. No, I don't pay your fluffed up prices on itunes.

Its a dog eat dog world. there are hundreds of millions of "artists" on this planet, its easier for me to find the good ones and pay them. Get over yourself, if you happen not to be one. I simply do not owe you money simply because you toss out some art.
September 18, 2007

an artist said:

...
mHaman wrote: "On top of that I will download whatever I wish, whenever I wish. By download I mean eMusic, and if you don't publish your music there then that is entirely your own fault. No, I don't pay your fluffed up prices on itunes."

So I guess, using your logic, you'd steal a Mercedes just because you wanted one and feel the dealer is charging too much?

I find it fascinating how supporters of Geist also tend to be so anti-artist. And Haman, which artists are you talking about that apparently are making boatloads of cash and robbing you of your right to free music? Broken Social Scene? Last I heard, the guy who runs their label was complaining of the difficulty he was having selling records. If he doesn't sell records, his artists don't get paid. But I doubt you care much about that.
September 18, 2007

fedge said:

...
Chris Brand: My musical interests include Canadian groups too. So therefore, If I download a Nelly Furtado album (Universal, a CRIA member) then I feel ZERO guilt or remorse. Also, no one is uploading anything. It's purely people downloading. By placing songs in a shared folder, that person isn't uploading anything AT ALL. Others, may well be downloading those files, however. It's not my fault the levy isn't more equitably split among the CRIA members - I personally could not give a half crap how it's split - NOT MY PROBLEM.

An Artist: No, you do not have a right to earn a living from your craft. You do have the opportunity to give music a shot and if you're good enough, persistent and serious enough - then MAYBE you might gain a fan base that will take you up the food chain. No one owes you jack crap anything simply because you write a song. The supply and demand of this business is such that there's so many of you "artists" to choose from that a great many of you will not enjoy the "right" to earn a living from your craft. Alternately, you may apply for A JOB - I hear McDonald's is hiring. And Broken Social Scene's label Arts & Crafts is doing quite alright actually. Again, labels are not afforded a "right" to succeed. Do you know how many labels perish over the ones that make it? For every Broken Social Scene and Arts & Crafts there are millions of Vinny Millers and Three Guts.
September 19, 2007

m b sharp said:

...
NO ONE should wake up in the morning thinking that the world owes them ANY thing, let alone the RIGHT to make money. That a segment of society was "owed" was the foundation of Canada's private copy system in the first instance, so it was ill-fated from the get go. Alas, many bad systems have been constructed on greed.

With few exceptions, the world generally operates on a compensation for work model whereby on one side of the model there is a desire (indeed in some cases it is a passion) to work, and on the other side of the model there is a willingness to pay for that work. Sadly, the buyers of music the world over (aka consumers) have been ripped off, cheated, ignored and legally-bashed into submission by the major music companies, so much so that they no longer have the willingness to pay.

Shakespeare cautioned about taking the masses for granted... indeed whole empires fell when kings lost sight of their kingdoms. Interesting that the recorded music business took over 100 years to grow and succeeded largely due to the vision of several passionate 'music men' who did not lose sight of consumer trends and appetites for music. In the mid-90s it all began to circle the toilet when they let the lawyers take over the business. Moreover in less than a decade these esteemed 'law men' have managed to take all of the industry's public recognition and goodwill and destroy it. By narrowing their focus to ONLY protecting rights and ruthlessly doing same, the lawful King has managed to destroy the kingdom. They have told the public to go F-- Off and lo' and behold it has.

The ARTISTS? At this point in history, with few exceptions (being those artists who really DO get it) most artists are nothing more than jesters performing in the King's court and the public has been locked out.

September 19, 2007

An Artist said:

...
So, using the logic above, since some poor child has been screwed over by the system, I guess he should have the right to break into your home and take your possessions?
I thought you guys were opposed to major labels? Now you are apparently opposed to simply paying for music. If you like it and want to take it then fine -- and you justify it because YOU decided to buy some CD three years ago that didn't turn out to be up to your refined standards.
Pathetic.
September 19, 2007

Ed said:

...
The greed of these organizations never cease to amaze me. The C/RIAA are bad enough don't get me started on SOCAN.

I buy a CD, then rip it into MP3's to play on my iPod or Cell phone. The C/RIAA are trying to say "you should pay again" why? I paid for the medium, and the content it contains. I will take the CD (or the DVD if its a concert DVD) rip it down to MP3's for either my iPod or my cell phone.

There is such a dearth of music today the Record labels are coming up (via their lobby organizations) more creative ways to generate more revenue. I can get "free" music from Spiral Frog, but can't transfer it anywhere (and need to keep an active account or the music stops working). I can buy a tune from Itunes (the dominant Internet music store) but can't use it outside of Itunes or my iPod/phone.

Lets not get into the repackaging of the same music over and over again, the Greatest Hits, The Top 20, Super Hits.. blah blah blah.

I'm a 47yr old man, and have spent a good chunk of money on Records and again to replace them with CD's . There is very little I want to listen to today, music today frankly sucks, dominated by pretty boys and girls who really can't sing their way out of a paper bag, but boy do they look good.

It amazes me how the hippie artists of the 60's have turned into corporate mongers who need to make a buck at every turn and condemn todays technology(which in turn could also help increase awareness of their art).

The greed of these corporations is going to be the death of them, mark my word
September 19, 2007

a guest said:

...
I recall an article written a few years ago in the AIPLA journal by two law students that alluded to this. I think the irony was they were students at Blakes and Blakes acted for CRIA in its application to get at domain names around the same time.
September 19, 2007

stacy said:

...
fedge: "It's purely people downloading. By placing songs in a shared folder, that person isn't uploading anything AT ALL. Others, may well be downloading those files, however."

Only the copyright holder has the right to "communicate the work to the public by telecommunication". By placing songs in a "shared folder" you are infringing on that right. In case you come back with the "its not my fault if someone downloads a file from me" argument, it is also an infringement to "authorize any such acts".
September 20, 2007

fedge said:

...
Sorry, Stacy, but you're wrong. The act of placing files in a folder of a computer I own is not illegal. Again, the person placing files in a "shared" folder is not doing anything illegal. They aren't uploading anything. Someone can *DOWNLOAD* those files, and they are not doing anything illegal either. The levy covers this sort of stuff. You can't have a levy *AND* call this illegal at the same time. That's called having your cake and eating it too. So, in this case, you are wrong.
September 22, 2007

stacy said:

...
fedge, I think you read far too much into what the levy allows. The levy only provides you with protection if you place the music onto a media that the levy applies to. Since the levy does not apply to hard disks, filling your hard disk with downloaded music is not protected (hence the whole debate about extending the levy to iPods).
September 24, 2007

proforma said:

...
> onto any type of device ordinarily used by individuals to > copy music, such as personal computers..."

Hm - seems to me HD may be included. Why should'nt it be?
September 24, 2007

fedge said:

...
stacy: So, assuming I immediately burned those downloaded songs to a levy-covered CDR, I would not be violating any law.

Regardless of what any bill may say, people are still going to get free music. This will happen until the government starts conducting in-home spot checks on citizen's homes to check their computers for "illegal" MP3s. And really, how does one tell an "illegal" MP3 from a "legal" one? Answer: you can't. But that wont stop the in-home spot checks concept from being considered. Heh...

I spent a couple years (2003-2006) fronting an online campaign against DRM on EMI and Sony BMG CDs. They've since stopped the DRM on CDs but the bad taste left has really killed any goodwill the CRIA members may have had from the public. The levy is a sore point among people because a 50 spindle of CDRs costs more than a 100 spindle on non-levied DVDRs.
September 25, 2007

stacy said:

...
"So, assuming I immediately burned those downloaded songs to a levy-covered CDR, I would not be violating any law."

As I understand it, that is the current state of the law in Canada.

"Regardless of what any bill may say, people are still going to get free music."

So your argument has gone from "it is legal because I paid the levy" to "'they' can't stop me so I'm going to do what I like".

"The levy is a sore point among people because a 50 spindle of CDRs costs more than a 100 spindle on non-levied DVDRs."

The levy is a sore point with me because less the 5% of the CDRs that I buy get used for music, just about all of them get data burned to them (a few get personal photos). I can understand people being unhappy with the levy, I just don't see how that dissatisfaction entitles them to ignore the law.
September 25, 2007

chronoss said:

mr
so how does htis affect demonoid.com
should we be doing a class action to recover our 200 million they have collected?

And what of the privacy issues. Last i checked that site needed a login and pass to enter. Did the CRIA use media defender software to spy on private things canadians did?

perhaps the EFF needs to be contacted.
October 01, 2007

dcd said:

...
Speaking of CD-R levies, I've seen retail stores selling 50 CD-R spindle for under $10 for some time now. There is no way the CD-Rs in those places were 'taxed' when the 'taxes' cost more than the products. When CRIA finally managed to yank the levy system, it will just formalize what retail stores have done to avoid this poor excuse of protection fee.
November 07, 2007

vaudevillian said:

big business
In Canada we pay for a levy on almost all recordible devices. This levy goes to Canadian artists circumventing the big business or I should say the CRIA and the RIAA.

This does not help their business platform. They want to do away with what we canadians have come to accept and pay for. They want a peice of the levy or all of it. Instead of the artist getting 100% of their peice of the levy the recording indistry will take this away. If the recording indistry gets its way either the levy will disapear or the government will pocket it. Now the artists dont get extra cash. The recording industry gets 100% of the extra cash through sales. Giving the artist even less for their efforts. Plus with all the c61 stuff about websites and putting drms on their content. It no longer becomes affordible for artists to host and sell their own music. Since they have to pay for higher overhead downloading. Plus another company to apply drms.

Big business fears business model changes. Look at the fight for the internet too. Companys do not want top upgrade their infrastructure. They want to make more off their present infrastructure. Example look at automobiles. What has changed in the last 90 years..... Not bloody much.

If governments dont monitor companys and stand up for the public what do we need them for, nothing. Government regulation benifets the public interest and not business interest. I say the government should regulate gas, internet, phone service, cable service, medical, transpertation infrastructure and many other things that the public need. Not sell of the goverment infrastructure we have to private compamys who will gouge every last customer they have.

A message to dcd. CD-R's are now very cheap period. Thoes that you buy for 10 dollers. for 50 are very cheaply made and you get what you pay for. Those cheap ones I buy some times I end up throwing out 5-10 out of the stack because they dont work.
September 06, 2008

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