Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.

Copyright Notice: We don't think much of copyright, so you can do what you want with the content on this blog. Of course we are hungry for publicity, so we would be pleased if you avoided plagiarism and gave us credit for what we have written. We encourage you not to impose copyright restrictions on your "derivative" works, but we won't try to stop you. For the legally or statist minded, you can consider yourself subject to a Creative Commons Attribution License.

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Canada - A Copyright Year in Review

2012 was surprisingly good for Canada. The decade long revision of the Copyright Act was completed; most parties agree that it was a good compromise. Amendments included: expanding fair dealing to include parody, satire, and education; protecting consumer behavior that reflects the conduct of consumers in a digital age; maintaining the independence of ISPs and the privacy of subscribers; implementing a cap on damages for non-commercial infringement ($5,000 is the maximum but a judge can award as little as $100; this is intended to discourage file-sharing lawsuits); and, creating an exception for non-commercial user-generated content. To be sure, all the exceptions come with the expected provisos, and all are subject to the overarching ban on any circumvention of technological protection measures. It still strains credulity as to why Canada in 2012 adopted a prohibition first conceived in 1996; but, given the fierce opposition by rights-holders, the fact that the user allowances were not rolled back in committee speaks well. Michael Geist gives a good synopsis of the new Act here.

And then came the Day of Five. In December 2011, the Supreme Court of Canada heard five copyright cases; all five decisions were released on July 12, 2012. The combination carries a strong message from the Court: copyright is a limited right and those limits must be robust if copyright is to serve its presumptive purpose of enhancing creativity. Of particular note is this Court's continued support of fair dealing. In one case, a performing rights collective society sought compensation for the use of music previews (30-90 seconds long) as they are used in cultivating sales of complete music files. The Court denied that request, stipulating that the use of previews is consumer research. Moreover, the Court took the opportunity to probe into the nature of research, to the advantage of all Canadians:

Limiting research to creative purposes would also run counter to the ordinary meaning of "research", which can include many activities that do not demand the establishment of new facts or conclusions. It can be piecemeal, informal, exploratory, or confirmatory. It can in fact be undertaken for no purpose except personal interest (SOCAN v. Bell Canada, para. 22).

In a second case, an educational licensing collective objected to the practice of teachers taking copies of small excerpts of works to be used in conjunction with paid-for textbooks. To the claim that such copying was detrimental to markets, the Court responded with:

[T]here was no evidence that this decline was linked to photocopying done by teachers. Moreover, it noted that there were several other factors that were likely to have contributed to the decline in sales, such as the adoption of semester teaching, a decrease in registrations, the longer lifespan of textbooks, increased use of the Internet and other electronic tools, and more resource-based learning (Access v. Education, para 33).

The Supreme Court of Canada began the quest for better balance in the system of copyright in 2002; a brief summary of pertinent decisions is available here. Through the five recent cases, the Court continued its commitment to technological neutrality, emphasized that advancements in technology do not immediately confer added control to copyright holders, and, made it plain that when considering fair dealing, focus must go to the end-user (not any intermediary involved in the reproduction or distribution of a work.)

An immediate effect of both the new Act and the Court's guidance is a shift in policy by educational institutions. These institutions were a captive market for educational licensing collectives, with instances of fair dealing effectively wrapped into blanket fees. Michael Geist writes that such monopoly is being rethought. Canadian institutions have paid, and will continue to pay, fees where copyright requires it; but fair dealing is now seen as an active practice instead of an exception that only exists on paper.

With a more flexible Copyright Act and a Supreme Court that champions balance between copyright holders and copyright users, Canada looks good going into 2013.

Another near-death experience for the International Music Score Library Project

IMSLP.org holds an extensive collection of public domain musical scores and is reputed to be the largest such collection world-wide. Established in Canada in 2006 by a music college student, and developed entirely by volunteers, the attention to copyright law was scrupulously maintained. Yet the site went offline in 2007 at the insistence of a European music publisher. The complaint was that while some scores may be public domain material in Canada, this may not be the case in Europe. As the BBC noted then, this raised the question of whether the public domain can only exist in an offline form. The site returned a year later and continues to thrive, despite some mistaken press on the part of the New York Times.

However, two days ago, the U.K. Music Publishers Association succeeded in blocking access to the site, via a notice-and-takedown complaint to Go-Daddy (the register of the IMSLP domain name). Go-Daddy immediately froze the domain name. Yet there was no legitimacy to the complaint; at issue was the status of The Bells, by Rachmaninoff. This composition is not only public domain material in Canada but also in the United States. IMSLP posted a detailed response here and filed a counter claim.

Go-Daddy has reversed the action, but this is a sad reminder of the ills of the notice-and-takedown regime. Due process is not the first step, it is the last.

Northern Update

As I've noted previously, in 2009 the Canadian government set about "modernizing" the Copyright Act. Canada was in an enviable position as copyright law had not been touched since 1997. The twelve years of waiting allowed for a more nuanced understanding of the challenges and opportunities wrought through digital technology and world-wide networks. Yet the amendments proposed in June 2010 showed a striking resemblance to the DMCA of 1998. Complete obedience to technological protection measures was the order of the day.

An aspect of change that looked promising was expansion to the permissible categories of fair dealing. Parody, satire, and education were added. The last item unleashed a storm of protest by writers' groups and copyright collectives; they insisted that this would lead to wholesale appropriation of works used in educational institutions. Even though within a month of the proposed amendments, the Federal Court of Appeal issued a decision affirming that the existing practices of payment for works used in K-12 education would continue. The FCA decision should have reminded everyone that the category of use is not enough for the use to be deemed fair. (A framework of questions, similar to the implementation of fair use in American law, was instituted by the Canadian Supreme Court in 2004.)

Nevertheless, the campaign of misinformation continued; the year closed out with a full-page advertisement in a national newspaper. Readers were left with the impression that the inclusion of "education" as a potential exception to copyright was a never-before-tried proposal and that such an action places Canada's creative potential in jeopardy, with consequences for the digital economy and the entire country.

In any event, the furor will make little difference one way or the other. If the bill passes as proposed, TPMs rule supreme. Even if the use of a work would have been deemed non-infringing.

Next step: the Special Legislative Committee is once again seeking seeking input on Bill C-32.

$27 million claimed; $500 awarded

A claim arguing both copyright infringement and moral rights infringement looked for $27 million in damages. (Plus, amongst other things, the goods and services tax on the monetary awards.) By the end, the Honourable Mr. Justice Russell of the Federal Court of Canada determined that the defendants' copyright misdemeanor was confined to posting the plaintiff's work on their website, without his consent. Justice Russell did not conceal his opinion of the plaintiff's conduct; "The evidence adduced concerning infringement of copyright suggests that the Plaintiff's claims are disproportionate and opportunistic."

It reads like a work of fiction; a long-time business association that went sour, third parties caught in the crossfire, and a proposed corrective that involved transacting funds in a Caribbean country of the plaintiff's choice. The effort to secure significant statutory damages earned some choice words from Justice Russell, "There is no evidence of any market for the Report and the conduct of the Defendants during the proceedings has been consistent with parties simply trying to resist the Plaintiff's inflated demands for $27,000,000.00."

The $500 awarded to the plaintiff is the minimum permitted for statutory damages by Canadian law. The claims for punitive and aggravated damages were unsuccessful.

Canada to "modernize" copyright law

It's official. The Federal Government of Canada unveiled Bill C-32 this afternoon; it places emphasis upon the sanctity of technological protection measures (TPMs). Michael Geist gives the Reader's Digest version. He points to some good news, including: ISPs retain the notice-and-notice system (that they have informally been working under for years); fair dealing has broadened modestly (parodic and some educational uses would be included); and some other consumer-friendly provisions are proposed (I think it will finally be lawful to video-tape a television program and watch it later.) However, if circumventing a TPM is involved, all bets are off.

For those of you who have been counting, this is the third effort, in the past five years, by Canada to amend the Copyright Act. The previous two each died on their order papers - victims of Parliamentary instability. That is unlikely to happen this time. It appears the government will endeavor to fast-track the bill into law.

More about the Encouragement of Learning

The Statute of Anne makes for interesting reading.

For instance, if books were perceived as overpriced, any individual could make a complaint to the authorities (among them the Lord Archbishop of Canterbury, the Lord Chief Justice of the Common Court, the Vice-Chancellors of the Universities of Oxford and Cambridge). Booksellers and printers could be summoned to justify the "reason of dearness." If the price was found to be excessive, the authorities could, "limit and settle the price for every such printed book."

And for each book printed, "nine copies upon the best paper," were to be reserved for "the Royal Library, the Libraries of the Universities of Oxford and Cambridge, the Libraries of the Four Universities in Scotland, the Library of Sion College in London, and the Library commonly called the Library belonging to the Faculty of Advocates at Edinburgh." If delivery of books did not take place within ten days after receiving a demand from a library, the offender was fined five pounds (per book).

What would five pounds in 1710 be equivalent to today?

Unruly Canadians

Canada has permanent-residency on the 301 Watch Lists prepared by the Office of the United States Trade Representatives. A disgrace earned by the state of our domestic copyright law. As Michael Geist revealed this week, the EU has an equally dismal view of Canada. Ongoing efforts to negotiate a trade agreement between Canada and the EU came with a scolding. Here are some of our sins:

1) We provide a copyright term of life plus fifty years, instead of life plus seventy.

2) We insist that ISPs are not liable for the conduct of their users.

3) Our law is antiquated (last major revision was in 1997, as compared to the DMCA of 1998).

4) We have not acceded to WIPO Internet Treaties (which obscures the mundane detail that Canada is compliant with international obligations.)

5) Our current law is precise on one disturbing point: copyright is a set of limited rights. So said our Supreme Court (four times).

6) Instead of listening to our trading partners (current and potential) with respect to changing Canadian law, our Federal Government chose to engage with Canadians. In summer 2009 Ministers James Moore (Heritage) and Tony Clement (Industry) embarked upon a national consultation. 8,000 letters later we are still waiting to see what shape the next law will take, but in the meantime Canadian media industries are holding their own.

PricewaterhouseCoopers recently published their 2009-2013 projections of global media and entertainment industries. In their comparison of consumer spending on media and entertainment in North America, PWC writes:

Canada will be the fastest-growing country, with projected 2.2 percent compound annual increase compared with 1.2 percent compound annual growth for the United States.

Notably, in the category of recorded music (the realm of active copyright lobbyists) both countries show a declining compounded annual growth rate. But Canada's decline is projected to -1% whereas its American counterpart shows -4.7%. Similar comparisons to U.K (-3.9%), France (-7.4%), and Germany (-1.9%) all place the Canadian music scene as more stable. This, despite the state of our copyright law.

Canada votes ... in a manner of speaking

As was noted here in August, Canadians were offered a chance to express their wishes for the next version of the Copyright Act of Canada. The volume of submissions (estimated to be over 8,000) may have caught the Federal Government off guard; the consultation period is now closed, but many submissions have not yet been posted.

My favorite might well be the remarks of David Allsebrook, submitted August 10, who observed that the protection of copyright should require adherence to the prevailing legal limitations of copyright - those who deny the public legitimate access to copyrighted materials through "restrictive license terms, technical protection means, or abuse through collective administration," should have the their entire protection revoked!

I am less enthusiastic about the request from the Association of Universities and Colleges of Canada, for a special exception so that students and faculty may utilize publicly available works from the Internet (as discussed in the Gatineau roundtable of July 29). To give the Association the benefit of the doubt, I must say that Canadian education operates under tightly constrained and cumbersome educational exceptions to copyright. That said, it's a little hard to overlook the fact that this request is being made in the name of works that are "publicly available." The Association is conceding infringement where none has happened, which raises concerns of liability to all those who will not be sheltered within an educational institution.

Moreover, once published, all material is available for the good-faith productive uses that are specified under fair dealing (private study, research, criticism, review, and news reporting) provided that the conditions of fair dealing are met (citation, appropriateness of use, etc.) Unlike fair use, fair dealing is this closed set of activities. However, in 2004, a unanimous Canadian Supreme Court described fair dealing as an integral part of copyright law, stated that it should be interpreted liberally, and offered considerable guidance regarding how to use fair dealing.

One advocate of the Association's proposal informed me that other jurisdictions are considering similar schemes. But, there was no mention of which jurisdictions. If anyone has information to share, please do.

More information on the Association's proposal can be found in my submission.

Open Access Plaudits

Belated congratulations to Gunther Eysenbach of the University of Toronto. Ten years ago he started the Journal of Medical Internet Research (JMIR); last month it became the leading peer-reviewed journal in the area of e-health. JMIR has displaced a longstanding incumbent, the Journal of the American Medical Informatics Association (JAMIA).

JAMIA is of Elsevier ancestry; JMIR is a small-budget, open access publication created via Open Journal Systems (OJS). For complete details see Eysenbach's blog, and for more about OJS, see the Public Knowledge Project.

Digital Britain - Final Report Now Available

Following the opening remarks by the Right Honourable Gordon Brown, MP Prime Minister, the report declares its ambition, "To secure the UK's position as one of the world's leading digital knowledge economies (p.7)."

The scale of the report is vast; it is about much more than intellectual property rights. That said, on the subject of IP, there is one sentence which is quaintly insightful. "A recent study in Scandinavia has shown that the biggest users of unlawful peer-to-peer material are also the biggest paid-for consumers of music (p.110)."

But, the correlation is unexplored. The next sentence is, "Where there are easy, affordable and lawful routes consumers will take them."

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French firm has patents on using computers to choose medical treatment 1

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