Separating Copyright Facts from Fiction Ahead of Legislative Hearings

Canadian copyright law promises to dominate discussion in Ottawa over the coming weeks as hearings on Bill C-32, the controversial copyright bill, are set to begin within a few days. My weekly technology law column (Toronto Star version, homepage version) notes that if the past six months are any indication, Members of Parliament will be asked to sort through confusing rhetoric in order to understand the implications of the proposed changes.  Separating fact from fiction will not be easy, but getting straight answers to the following questions will be crucial:

1.    Will Bill C-32 give education institutions the right to engage in massive uncompensated copying?

No. The inclusion of education as a fair dealing category will not mean that any educational copying will be free.  It will only mean that educational copying will be eligible for analysis under a six-part test developed by the Supreme Court of Canada to determine whether the copying qualifies as fair dealing. The changes in Bill C-32 are more modest than often claimed as they merely fill some gaps in the existing list of fair dealing categories.

2.    Will Bill C-32 give consumers the right to make backup copies and view or read their purchases on the device of their choice?

Sometimes. The bill includes new consumer exceptions that open the door to legally recording television shows (time shifting), moving content between devices (format shifting) and making personal backup copies.  However, the bill also says that if the content, such as DVDs and e-books, contains a digital lock, consumers can’t circumvent the lock in order to exercise their rights.  Since digital locks are commonly found on these products, Canadians may not actually get to exercise their new “rights.”

3.    Aren’t the digital lock rules in Bill C-32 required by international law?

No. The government has made implementing the World Intellectual Property Organization’s Internet treaties a key priority and those treaties include a requirement to provide legal protection for digital locks.  However, the treaties feature considerable flexibility that permits countries to allow users to circumvent digital locks for legal purposes.  The Bill C-32 model is one of the most restrictive approaches in the world – even the U.S. permits circumvention of DVD locks for some non-commercial purposes – and could be amended to match the more flexible implementations found in countries such as New Zealand and Switzerland.  

4.    Does Bill C-32 require Internet providers to help combat piracy?

Yes.  The bill codifies a “notice-and-notice” system that gives rights holders the power to notify ISPs of alleged infringements and requires the ISPs to forward the notifications to the targeted subscribers.  ISPs bear the costs of this system, which has been used informally in Canada for more than five years. Studies have shown that a majority of users that receive notifications cease placing the infringing file back on file sharing networks.

5.    Does Bill C-32 create a “licence to steal” by reducing statutory damages awards?

No.  Canada is one of the few countries in the world with statutory damages for copyright, which can lead to liability of up to $20,000 per infringement.  The lofty awards were designed for commercial infringement, as no one envisioned multi-million dollar lawsuits against individuals.  Since that has become a reality in the U.S., Bill C-32 establishes a $5,000 cap for non-commercial infringement, which still represents a very significant penalty for such activities.

6.    Will Bill C-32’s user-generated content provision deprive creators of commercial opportunities?

No.  The provision, which legalizes the creation of certain forms of user generated content, is limited to non-commercial activities, requires attribution, and does not apply if there is a substantial adverse effect, financial or otherwise, on the exploitation or potential exploitation of the original work.

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  1. Although the clarification offered later in response to question #2 is valid, I am quite firmly of the opinion that the initial, one word answer to that question is incorrect.

    The answer given is “sometimes”, which I cannot help but think to be some sort of sarcastic joke, because in reality, and for all practical purposes, the answer would be “no”.

    The consumer has no real choice about whether the works that they might want to purchase will have digital locks on them or not, that decision is at the sole discretion of the content provider, and as a result, the consumer will, when dealing with almost any digital media, be unable to exercise these so-called “rights” that are offered under C32. To try to point out that it only applies to digital media is also a laughable notion in the 21st century, as technology advances and we move increasingly towards digital-only formats, and to try to point out that it only applies to media with digital locks is equally irrelevant because the consumer never has any choice in whether or not the content has those locks on it other than to not buy any content at all.

    So, answering “sometimes” in response to that question is misleading at best, and downright deceptive at worst, because it connotes a stronger positive side to the notion than what actually exists in practice. I believe it would be much more informative (and more accurate) to therefore answer that question with “it is at the discretion of the content provider.”


    Does bill violate the Charter section 2(b)?
    Yes it does! Because it limits what kind of software I can write about and express. If I can’t use a formal language to describe an idea, what kind of language may I use?

  3. What is and what is not a lock?
    All files are encoded and require a codec to decode them. Some codecs are easy to find, like the one that rips CD’s, and some are harder to find, like the one that rips DVD’s. (Probably because the latter is illegal in more countries, I don’t know.) But that doesn’t mean that DVD’s and Blueray or HDMI are ‘locked’ more than are CD’s or MP3’s. You can bet that when those “settlement letters” are drawn up they’ll be threatening us with the $2000 fine for breaking the lock, not the $5000 fine for infringement.

  4. answer for #2 is misleading
    I agree that the “sometimes” for #2 is misleading. It’s only “sometimes” in today’s climate where digital locks are only just starting to get the protection the content distributors want. When those protections are in place, I predict absolutely everything will have a digital lock, no matter how weak since breaking the lock will be illegal and subject to severe prosecution.

    IOW, there will be more motivation than ever to put digital locks on things and they don’t even have to be strong digital locks, which means the barrier to applying them will be low.

    We are staring at a (very near, I’d say) future where the answer to #2 is:

    Absolutely not, ever — you will be required to pay for a piece of media for as many different devices you will want to enjoy it on and you will be required to enjoy time-slotted media when the distributors say you will enjoy it and no other time.

  5. @Brian – I fear that your conclusions may prove accurate, if C32 passes without change.

  6. Write to your MP and harass every politician you can to get this piece of junk legislation killed.

  7. @Boothie
    “All files are encoded and require a codec to decode them. Some codecs are easy to find, like the one that rips CD’s, and some are harder to find, like the one that rips DVD’s. (Probably because the latter is illegal in more countries, I don’t know.) But that doesn’t mean that DVD’s and Blueray or HDMI are ‘locked’ more than are CD’s or MP3’s.”

    This is not correct, well not entirely. An encoded format, such as a CD, DVD or BD and files such as WAV, AVI, MP3, require special codecs to decode and play them….this is the format and in general must conform to specific standards. With DVD and BD you must license that codec if you wish to use it or buy something that includes the codec. PowerDVD is a good example.

    Now with technology like DVD, BD and protected WMA/WMV files, they use encryption, and for DVD and WMA/WMV that encryption is optional. It is intentionally applied to make it “difficult” to copy. BD and HDMI, I believe by the nature of the standards, encryption is mandatory. DVD/BD use region coding applied to try and limit distribution and cross boarder shopping. Several producers still use Macrovision. These are digital locks and serve quite a different purpose than a codec.

    Decoding a file using a codec or any other means, be it free or purchased, will not be illegal. Decrypting a file for any purpose will be illegal as C-32 currently stands.

  8. …also…
    It should be noted that a vast majority of commercially produced DVDs are encrypted and region coded. My previous message seems to imply otherwise as I re-read it.

  9. @IamME
    Don’t forget, you pay twice to access the content on the DVD (if you follow the law). You pay for the DVD itself and you pay again for the software/hardware to decrypt it. Unless you go with GNU/Linux or some Windows license free library to decrypt DVD’s, but you wouldn’t be following the current law if you did. Further, with Bill C-32 you’d be in deeper trouble for trying to pay only once to access the content on that DVD (assuming you’re caught).

    The point is, following the law, you’re screwed! And until this sinks into the content industry’s head, and the governments, no one will oblige the laws and no one will care. There’s clear indication the content industry wants control and money and doesn’t care about the content creators or the consumers.

    There is absolutely no incentive to follow the law currently, so why would anyone bother following Bill C-32 either? Where’s the incentive for the consumer?

  10. LOL
    its easy to see who is depositing money into this geist guys accounts isnt it ?

  11. @Robert
    Currently, it’s not illegal to decrypt and/or decode a DVD under the current law, neither is it against the law to circumvent region coding or import out-of region movies. I have two region-free/system-free players that I bought legally at reputable stores right here in Canada. They will play any DVD from anywhere in the world, and this is how it should be. Granted C-32 will make all this illegal. Even under C-32, however, it won’t be illegal to decode an unencrypted DVD and play it. It’s breaking the encryption lock that becomes illegal. Unfortunately, as I said, most commercial DVDs are encrypted. Just because the DVD codec is licensed, doesn’t make it a TPM, hence not applicable here. It may be illegal under some other obscure law that most people tend to ignore, but C-32 doesn’t affect it.

    “There is absolutely no incentive to follow the law currently, so why would anyone bother following Bill C-32 either? Where’s the incentive for the consumer?”

    Other than not getting your a$$ sued off, there is no incentive. They want to give you less freedom and charge you more for it. They know from a consumer standpoint, this won’t stand, so they want it legally protected. However, if no one respects the law, no one will follow the law, it will be unenforcible…pointless.

    According to one report I found, in 2008 approximately 37% of American consumers had MP3 players, that number jumps substantially to 73% for those aged 12-17. And, at the same time, 33% of all music sold in the US was digital. I coundn’t find similar results for Canada, but I suspect the numbers to be comparable, with sales numbers being slightly lower due to the fact that we lack many of the great services and a lot of the content available in the US. These numbers would likely be somewhat higher today, but even in 2008, that was over 1/3 of the consumer population. This is higher than I personally would have expected. These days, two years later, we’re likely talking about over 40% of the consumer population. In any case, that is a lot of people to pi$$ off by trying to shove draconian laws down their thoat. C-32 offers no incentives for consumers to change habits. It’s an industry-serving bill that takes most rights away from consumers and most of that 40% will wholey ignore it, going on with life as normal.

    This is what the industry bodies should be thinking.
    40%!!!! That’s more than just a fad!! Learn to live with it, learn to work within the consumer demands, or perish!!! If anything big business should learn from history is that if the consumer doesn’t want your product or feels you’re treating them unfairly, they will take their business elsewhere.

  12. sandy crawley says:

    Fiction as fact….
    With all due respect to Canada’s leading consumer advocate, he’s dead wrong about the proposed “education” exemption in the draft copyright bill. In fact, he has taken the position that collective licensing is unnecessary in the past. Even if he were correct, in this piece he argues that the Supreme Court ruling is the key to making the issue clear. That implies that a writer whose work is copied without compensation will have to take the infringer (in this case an educational institution) to court to decide the matter. The behaviour of the provincial ministries of education (except Quebec, of course, who get the connection between Canadian text and the education of Canadians) suggests that, though Geist may be confident that this bill doesn’t weaken collective licensing (it does) they have been lobbying hard for the exception, which begs the question: Why?

    Robert asks: “There is absolutely no incentive to follow the law currently, so why would anyone bother following Bill C-32 either? Where’s the incentive for the consumer?”
    The incentive they’re offering is that we’ll be able to copy for personal use, finally. (Even though no one has EVER been charged for personal use before, and they surely will be sued now!) And they’ll be offering to relieve us of the levy, too. (Even though it is much more fair than random lawsuits to have a levy to promote the arts, even though we have to pay it for storing other than digital media and, yes there are some people who don’t even listen to music!)

    Now I know I might be a radical for suggesting that a politician might be making an empty promise, but we are going to get NOTHING but a DIS-incentive to copy and the end of any privacy and freedom. That’s why no less than Tim Berners Lee has recently called this kind of law the biggest threat to the Internet itself.

  14. @sandy crawley
    Agreed. The problem with the education exemption, as it stands, it that it can (perhaps inadvertantly) encourage the concept of “it is easier to ask for forgiveness than permission”. By this I mean that the expected cost of infringing is less than the licensing costs, since the expected cost is basically the fine plus licensing costs times the chances of getting caught and losing the case. Let’s say that licensing costs you $500, and that the fine is $20000, for a total of $20500. Now, if your chances of having to pay the larger amount is 1 in 41, then you break even. If 1 in 100, it is $205. By this I mean that if you infringe 100 times and have to pay for one of them, it has cost you $20500 for 100 infringements or $205 per. (for simplicity I’ve ignored the impact of court costs; all that does is modify the total payable and hence the expected cost and therefore the break-even point).

    Of course, this can apply to many exemptions where there is uncertainty involved (in this case eligible to claim vs able to claim).

  15. A creators view?
    @Sandy “Fiction as fact….”

    I know you disagree with Geist’s interpretation on the education exemption, and I can understand your concern about costs of litigation, but I’d also be interested to hear your views on the other points he made?

  16. Clarity
    @Sandy “That implies that a writer whose work is copied without compensation will have to take the infringer (in this case an educational institution) to court to decide the matter.”

    I am curious of the other categories that are already under the fair use category. How do the affected parties handle those circumstances?

    So, do you think if the six part test that was established by the supreme court was codified into Bill C-32 that would be sufficient clarity to avoid costly litigation? If not, apart from deleting the education exemption all together, what do you think would be necessary?

  17. The good news for everyone opposed to C-32 is that the committee members have adopted a Cancun-like schedule that all but insures that they won’t be done until at least February-March 2011. Hopefully, Harper will have as much compassion for Tony Clement as he does for Canadians, and will call an election in the Spring which will kill this legislative nightmare called C-32.

  18. Sad Canadian says:

    I’m just waiting to see the first parent that violates copyright by reading a bed-time story to their child. You need two licenses to read this to your child, one for you and one for the child.

    Also you need to make special arrangements with the Author in order to obtain a performance licence to be able to perform an auditory rendition of said works.

    Don’t worry we’ll follow all your rules like good little slaves. You can even put CCTV in our homes to make sure! A publishers wet dream. But the CCTV will come in to prevent terrorism and pedophilia I’m sure.