File Sharing and Canadian Copyright Law

My regular Law Bytes column (freely available hyperlinked version; Toronto Star version, homepage version) features the second part of an examination of the recent Canadian Federal Court of Appeal decision involving the recording industry's attempt to identify 29 alleged file sharers. After considering the privacy issues last week, this column moves to the copyright implications by considering three questions: can the Canadian recording industry sue file sharers? Can it win such suits? And what legal reverberations might ensue if it does win?

The answer to the first question is relatively straight forward. CRIA can sue file sharers in Canada and it has indeed asserted that the decision provides a blueprint for future suits.

The answer to the second question of whether CRIA can win file sharing suits is open to debate, particularly with respect to suits filed against individuals that solely download music from peer-to-peer networks. The complicating factor is the effect of Canada's private copying system, which establishes a levy on blank media such as recordable CDs. Anna Bucci, the Executive Director of the Canadian Private Copying Collective, the body that administers the $120 million in royalties that have been generated by the levy, last week described private copying as creating "a new right for the Canadian public: the right to make private copies of music for their own personal use."

The column delves into the private copying system and concludes that there should be no doubt that the technology neutral approach found in the statute was intentional and that copying to computers was envisioned as early as 1985. However, whether the statute as drafted actually does cover computer hard drives turns on the Supreme Court's response to last December's Federal Court of Appeal private copying decision.

If Canada's highest court overturns the decision, the intent of the legislation will be restored and much of the doubt about its applicability to P2P downloaders will be removed. If the Supreme Court declines to hear the appeal or upholds the decision, the impact will extend well beyond music file sharing. Some P2P downloading would no longer fall under the private copying right, though downloads to many external or removable hard drives would presumably still qualify. More importantly, copying of store bought CDs onto Apple iPods, a common practice extolled by CRIA itself, would effectively be rendered unlawful in Canada (unless there is an implied right to copy such CDs, which would then call into question the need for a private copying system).

In response to the third question, the column argues that it raises the prospect for copyright reform if suits lead to outrageous statutory damages awards. Alternatively, a court might be faced with a sympathetic defendant who could prove that they had legitimately copied store bought CDs onto their computer and logged onto a P2P network in order to download a public domain document or open source software program. In such a case, the judge might be inclined to use the saving provision found in the statutory damages section and set a precedent of a minimal damages award for P2P activity.

The net result? The state of current Canadian law is that file sharing suits are a risky strategy from both a privacy and copyright perspective.

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