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Beyond Users' Rights: Supreme Court Entrenches Technological Neutrality as a New Copyright Principle

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Monday July 16, 2012
Last week, I posted on the significance of the Supreme Court of Canada's five copyright decisions with an emphasis on the shift from fair dealing to fair use. This week, I have several additional posts planned including one on the implications for Access Copyright as well as a broader examination of how the court has elevated users' rights within Canadian copyright law. This post focuses on the second major development in the cases: the articulation of technological neutrality as a foundational principle of Canadian copyright. The technological neutrality principle could have an enormous long-term impact on Canadian copyright, posing a threat to some copyright collective tariff proposals and to the newly enacted digital lock rules.

The technological neutrality principle is discussed in several cases, but gets its most important airing in the Entertainment Software Association of Canada v. SOCAN decision. The majority of the court states:

In our view, the Board's conclusion that a separate, "communication" tariff applied to downloads of musical works violates the principle of technological neutrality, which requires that the Copyright Act apply equally between traditional and more technologically advanced forms of the same media: Robertson v. Thomson Corp., [2006] 2 S.C.R. 363, at para. 49. The principle of technological neutrality is reflected in s. 3(1) of the Act, which describes a right to produce or reproduce a work "in any material form whatever". In our view, there is no practical difference between buying a durable copy of the work in a store, receiving a copy in the mail, or downloading an identical copy using the Internet. The Internet is simply a technological taxi that delivers a durable copy of the same work to the end user.

While many have focused on the "technological taxi" reference (picked up nicely in the dissent), the more important statement comes earlier in the paragraph where the court states that technological neutrality is a principle within the Act that requires equal application between different media (the court cites as support Professor David Vaver, who is easily the most influential source on copyright for the court as his text also served as the support for the users' rights language in CCH).

Moreover, in a discussion that appears influenced by the CIPPIC intervention in the case (see paras 19-26), the court frames technological neutrality as a matter of balance within the Copyright Act. It continues by stating that:

ESA's argument is also consistent with this Court's caution in Théberge v. Galerie d’Art du Petit Champlain inc., [2002] 2 S.C.R. 336, that the balance in copyright between promoting the public interest in the encouragement and dissemination of works and obtaining a just reward for the creator requires recognizing the "limited nature" of creators' rights

The linkage between technological neutrality and the limited nature of creators' rights could prove very significant as the court is concerned that a non-neutral approach may result in overcompensating creators. The effect in the ESA case is immediate:

The principle of technological neutrality requires that, absent evidence of Parliamentary intent to the contrary, we interpret the Copyright Act in a way that avoids imposing an additional layer of protections and fees based solely on the method of delivery of the work to the end user. To do otherwise would effectively impose a gratuitous cost for the use of more efficient, Internet-based technologies.

The impact of this finding could prove as significant as the users' rights language in CCH. For cases before the Copyright Board, the court has signalled that technological neutrality means avoiding the double dipping that occurs when new fees are layered onto new technologies. While rights holders have tried to argue that there is additional value that comes from the use of such new technologies, the court has prioritized technological neutrality over additional payments.

This will have a major impact on tariff proposals from collectives such as SOCAN and Re:Sound, who frequently seek additional payments for new delivery mechanisms. Access Copyright will not be left unscathed, since its model licence assumes additional value (and therefore payment) for activities such as linking or electronic access to materials from its repertoire. The court's analysis suggests that this is double dipping, as it seeks new fees solely for the method of delivery of the work to the end user.

The court's sensitivity to technological neutrality and the Internet comes out clearly in the song previews case. In the assessment of the fair dealing six factor test, the court rejects the quantification of aggregate copying in part because of the sheer volume of copying that occurs online:

given the ease and magnitude with which digital works are disseminated over the Internet, focusing on the "aggregate" amount of the dealing in cases involving digital works could well lead to disproportionate findings of unfairness when compared with non-digital works. If, as SOCAN urges, large-scale organized dealings are inherently unfair, most of what online service providers do with musical works would be treated as copyright infringement. This, it seems to me, potentially undermines the goal of technological neutrality, which seeks to have the Copyright Act applied in a way that operates consistently, regardless of the form of media involved, or its technological sophistication

The technological neutrality principle has potential applications in a wide range of additional cases. For example, digitization initiatives may be on stronger legal ground, supported by a combination of fair dealing and technological neutrality.

While the most pronounced short term effect of technological neutrality may be on copyright collectives seeking payment based on different delivery methods, the biggest long term impact may be felt when courts begin to assess the effect of the new digital lock rules. Those rules are distinctly non-neutral and could face a rough ride if challenged before the courts. The majority in the ESAC case specifically states that "the traditional balance between authors and users should be preserved in the digital environment", citing Professor Carys Craig's article Locking Out Lawful Users: Fair Dealing and Anti-Circumvention in Bill C-32.

That article is focused on how digital locks without appropriate exceptions have the potential to effectively eviscerate fair dealing. In fact, Craig's full quote states:

'the traditional copyright balance of rights and exceptions should be preserved in the digital environment.' The availability and protection of TPMs should not, therefore, alter the copyright balance with respect to the enjoyment of exceptions and limitations. Unfortunately, the anti-circumvention provisions found in Bill C-32 make no attempt to achieve prescriptive parallelism or to maintain the traditional copyright balance, instead sacrificing user rights and privileges to the ultimate power of technical control.

Ironically, the ESAC emerges as a winner in this case, but its broader support for digital locks may be harmed in the process. Given the failure of Bill C-11 to preserve the copyright balance of rights and exceptions with respect to digital locks, those rules "impose an additional layer of protections" and create a "a gratuitous cost" for consumers who lose their user rights in the shift to Internet-based technologies.

The message from the court is clear: copyright law should not stand in the way of technological progress and potentially impede the opportunities for greater access afforded by the Internet through the imposition of additional fees or restrictive rules that create extra user costs. Viewed in this light, technological neutrality as a principle within Canadian copyright may have the same dramatic effects on the law as the articulation of users' rights did in 2004.
Comments (11)add comment

autom said:

last few sentences..
appear to be "caught in a loop" as it were..curious how that last phrase ends : ) thanks Michael
July 16, 2012

Marcelo Thompson said:

The Problem of Technological Neutrality
Dear Michael, thank you very much for this thoughtful note. May I share this piece with you and your readers:

https://bitly.com/mZozO

It would be great if courts could engage with the history and global context of political ideas as they embrace them.

Best wishes,

Marcelo

July 16, 2012

Marcelo Thompson said:

July 16, 2012

Shawn H Corey said:

Soooo, no DMCA?
Since 'the traditional copyright balance of rights and exceptions should be preserved in the digital environment.' Does this means that Parliament cannot pass any law like DMCA since that would mean a takedown without a court order or warrant?
July 16, 2012

Patricia said:

...
Yet they do say "absent evidence of parliamentary intent to the contrary." So it's not against potential laws, but should be against the imposition of tariffs by other means.
July 16, 2012

Crockett said:

...
Prof. Geist, in light of your analysis, do you know of anyone (possibly yourself) who would be willing to take the digital lock issue to the SCC? I think many of us here and others would be very supportive of such an endeavor.
July 16, 2012

crade said:

...
It only says "absent evidence of Parliamentary intent to the contrary" though, the Digital locks stuff is pretty obvious intent to ok double dipping and to ensure copyright does not apply equally to traditional and new media.
July 16, 2012

Still Confounded said:

Stuck on downloading policy/laws in Canada
I'm still stuck on being confused about downloading policy/laws in Canada. Is it still the same ok - downloading; not ok - uploading?

"Previews" of a song is kind of not really a preview for me because by only hearing a part of the song can I not judge to see/feel the demand/enticement of buying. Hence, previews are way too limited in regard to online social media sites.

P.S. songs aired on web radios or IRL (In Real Life) radios, or video teasers in cinemas or TVs are straddling the concept of "preview(s)".
July 16, 2012

Chris said:

Impact of this on streaming services?
Does this mean I could start a movie streaming service simply by purchasing DVD movies on the open market and then renting them to customers via a streaming server? I would think I would only need as many DVDs of any movie as copies that I'm streaming. Or would bypassing the digital restrictions on the DVD cause a problem in Canada? If this is now legal it could be an awesome situation as small rental shops can pop up online and GNU/Linux (amongst other) systems will get support (including the proprietary operating systems that too have substandard support). No more do we have to rely on the big established players (Amazon, Netflux, Hulu, etc). We go back to mom and pop shops (potentially) where freedom friendly (DRM free) services can (like eztakes.com) shine. No longer restricted to a limited selection of movie content.
July 17, 2012

K Anderson said:

Statutory Language?
I think the real issue is a matter of interpretation. On the one hand technological neutrality is at best a "guiding principle." However, beyond normative assessments on how the Copyright Act ought to function - copyright is a creature of statute. As Rothstein stated tacitly (if not openly) even if technological neutrality is a "guiding principle," how can such a "guiding principle" overturn clear and unambiguous statutory language? The role of the Court is to interpret - not to decide copyright policy. Either way, ESAC v SOCAN did not turn on normative copyright policy - it fell on the proper approach to interpreting the Copyright Act.
July 22, 2012

ettan said:

Technically, the legislature in Canada
Technically, the legislature in Canada is supreme - they make the laws. Just like in the US. But all laws are subject to the Constitution and more specifically the Charter, which means that they can be struck down by the judiciary; i.e. Canada has de facto judicial supremacy. And of course, the common law is judge-made law, just as it is in every common law country.

But in this case, yeah, the legislature can just go ahead and introduce a new law that it thinks will pass the judicial test. That's how the system is supposed to work anyway.
http://www.btscene.eu/
August 20, 2012

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