The Internet Association, a U.S.-based industry association that counts most of the biggest names in the Internet economy as its members (including Google, Amazon, eBay, Facebook, Netflix, and Yahoo), recently released a policy paper on how Canada could become more competitive in the digital economy. The report’s recommendations on tax reform generated some attention, but buried within the 27-page report was a call for patent reform.
The Internet giants warned against patent trolling, which refers to instances when companies that had no involvement in the creation or invention of a patent demand licences or other payments from legitimate companies by relying on dubious patents. Studies indicate that patent trolling has a negative impact on economic growth and innovation and is a particularly big problem in the U.S., which tends to be more litigious than Canada.
Given those concerns, the Internet Association urged the Canadian government to enact reforms to “limit the ability of non-practicing entities [a euphemism for patent trolls] of exploiting patents to make unreasonable demands of productive companies and prevent crippling damage awards.”
While the Canadian government has yet to respond publicly to the recommendations, my weekly technology law column (Toronto Star version, homepage version) reports that according to documents recently obtained under the Access to Information Act, earlier this year Industry Minister James Moore launched a series of private consultations with Canadian business on intellectual property issues. The government came prepared to engage directly on the patent trolling issue, going so far as to identify several potential policy measures. Yet it was Canadian business that discouraged Moore from taking action, warning against the “unintended consequences” of patent reforms.
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Canadian Internet and telecom providers have, for many years, disclosed basic subscriber information, including identifiers such as name, address, and IP address, to law enforcement without a warrant. The government has not only supported the practice, but actively encouraged it with legislative proposals designed to grant full civil and criminal immunity for voluntary disclosures of personal information.
Last month, the Supreme Court of Canada struck a blow against warrantless disclosure of subscriber information, ruling that there is a reasonable expectation of privacy in that information and that voluntary disclosures therefore amount to illegal searches.
My weekly technology law column (Toronto Star version, homepage version) notes the decision left little doubt that Internet and telecom providers would need to change their disclosure policies. Last week, Rogers, the country’s largest cable provider, publicly altered its procedures for responding to law enforcement requests by announcing that it will now require a court order or warrant for the disclosure of basic subscriber information to law enforcement in all instances except for life threatening emergencies (warrantless disclosures may still occur where legislation provides the lawful authority to do so). Telus advised that it has adopted a similar approach.
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Industry Minister James Moore announced new spectrum policy measures yesterday designed to help foster the creation of a viable fourth national wireless competitor. The policy features an accelerated timeline for another spectrum auction (AWS-3) and a significant set-aside of spectrum for new entrants such as Wind Mobile. When combined with the government’s policies on domestic roaming, tower sharing, and foreign investment, it is clear that it intends to continue to use the policy levers at its disposal to encourage greater wireless competition. For this, the government deserves kudos, as its emphasis on fostering greater competition is the right thing to do.
While the announcement generated criticism from the usual suspects who want Canadians to believe that the market is already competitive (or incredibly might somehow become more competitive if it shrunk down further to two competitors), it is worth revisiting the Competition Bureau’s analysis of the wireless market. Earlier this year, Canada’s independent agency responsible for competition in the marketplace concluded that the Big 3 enjoy “market power”, which it defines as “the ability of a firm or firms to profitably maintain prices above competitive levels (or similarly restrict non-price dimensions of competition) for a significant period of time.” In fact, the Bureau commissioned its own study of the market on domestic roaming and found that a more competitive market would deliver approximately $1 billion in benefits to the Canadian economy.
As if on cue, the Big 3’s most recent quarterly investor calls confirmed that they face little Canadian pricing pressure.
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The Supreme Court of Canada’s Spencer decision is still only a few days old, but it has become clear that the ruling has left the government’s privacy and lawful access strategy in tatters. I’ve posted earlier on how the decision – which held that Canadians have reasonable expectation of privacy in their subscriber information and that voluntary disclosure of such information to the police constitutes an unlawful search – blows away the government’s plans for Bills C-13 and S-4 by contradicting longstanding government policy positions.
While there are options for the government to establish reforms that are consistent with the court ruling and that would grant police the access they say they need, government ministers have instead adopted a rather bizarre response of saying anything, no matter how inconsistent with prior positions, the court’s analysis, or public comments from authorities such as the Privacy Commissioner of Canada. There is admittedly a track record for this: Conservatives have dismissed privacy concerns from Carole Todd, the Boys and Girls Club of Canada, the Privacy Commissioner of Canada, and many more. Further, the Conservative leader in the Senate claims Spencer has “no impact whatsoever” on Bill S-4.
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Four years after the Canadian government first announced plans to develop a digital economy strategy, Industry Minister James Moore traveled to Waterloo, Ontario, Friday for the release of Digital Canada 150. The long-awaited strategy document identifies five key areas for policy development: connecting Canadians, protecting the online environment, developing commercial opportunities, digital government, and Canadian content.
My weekly technology law column (Toronto Star version, homepage version) argues the release of Digital Canada 150 succeeds on at least three levels. First, it puts to rest the longstanding criticism that the government is uninterested in digital issues. Moore quickly emerged as the government’s digital leader after taking the reins at Industry Canada, promptly focusing on wireless competition, spam regulation, and now a digital strategy. After years of complaints that the digital strategy issue was Ottawa’s equivalent of the “Penske File” – all talk and no action – Moore has acted.
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