Mr. Chair, committee members, and Madam Clerk, my name is John Lawford, and with me is Janet Lo. We are counsel to the Public Interest Advocacy Centre, one of four major Canadian consumer groups who have banded together under the title of the Canadian Consumer Initiative, CCI. The other members of this coalition are the Consumers Council of Canada, Option consommateurs, and l'Union des consommateurs.
CCI wishes to bring to the committee our view of the consumer interest in copyright legislation. Consumers are one of three major stakeholder groups in this discussion, along with artists and rights holders. However, despite their huge importance, the voices of consumers have not been loud or clear in this debate.
Consumers buy copyrighted content. They enjoy copyrighted content. They directly and indirectly compensate artists and rights holders. They are an essential part of the equation in achieving a copyright law that fairly grows creative content and personal enjoyment of that content. You can't do it without consumers.
This bill makes strides towards recognizing this foundational role of consumers. We like the explicit recognition of consumer rights: of consumers' rights for all copyrighted content, clear backup rights, format-shifting rights, space- and time-shifting rights. We also applaud the efforts to recognize and validate user-generated content that is non-commercial, creative, and widespread among consumers. As written, that provision ensures non-commercial, non-threatening, non-destructive consumer creativity.
However, we have had to curb our enthusiasm for the expression of these consumer rights in the bill because of their potential override by digital locks or technical protection measures. We continue to believe that the power balance between rights holders and consumers has been tipped too far in favour of rights holders under this bill. Every consumer right under this bill can be taken away by a technical protection measure, and that can be done in two ways.
First, the general protection of technical protection measures in proposed section 41 prohibits consumers from backing up or time- or format-shifting content if a digital block is in place. Second, each of the individual consumer rights listed in proposed new sections 29.22 through 29.24 has a subsection that makes that right applicable only if the individual, ”in order to make the reproduction or record the program, did not circumvent...section 41”.
In effect, then, these sections declare that when a technical protection measure is present, none of the format-shifting, time-shifting, or backup rights even exist. This matters, because consumers will therefore never even be able to argue that they are exercising their consumer rights if they circumvent the technical protection measure. If this bill is passed as written, a consumer who breaks a digital lock for non-infringing purposes will be violating the Copyright Act. Although a consumer would not face statutory damages under the act for a circumvention done for private purposes, we are more concerned with the chilling effect of outlawing all tools that permit circumvention of TPMs, even when designed and used only to allow consumers to enjoy their consumer rights.
In short, no business or individual will write or distribute such software for fear of liability, and the vast majority of consumers will not be able to do this themselves. As a result, consumers will have their rights dictated to them by rights holders, who will likely use this power to deny these rights or to demand additional payments for content that can be backed up or time-, space-, or format-shifted.
Consumers will face a myriad of TPM restrictions on devices, media, and delivery mechanisms that are very likely to make some of the content they have bought unplayable and almost certainly will make that content vastly less secure and less usable. The market will not solve this dilemma. The commercial interests of artists and rights holders go the other way.
The Bill C-32 committee heard Ms. Milman come and explain that she would like to be paid twice, once when a consumer buys her CD and once when they put it on their iPod. The same committee heard Ms. Parr of the Entertainment Software Association of Canada claim that new business models with TPMs would create more choice for consumers, lower prices, and give more flexibility.
Consumers don't think so. They believe and act as the format-shifting, time- and space-shifting, and backing-up normal people that they are. They feel that they have done the right thing by buying content, paying for it once, and using it normally. They have a right to this expectation. It is for the industry to structure itself to be profitable in this environment and for that industry to fairly compensate artists, not for this Parliament to hand an act to rights holders and artists that protects top-heavy, unfair business models and is contrary to the public interest.
At a minimum, this bill should be amended to recognize these consumer expectations and actual use of copyrighted content in the real world. Therefore, we recommend that the committee consider striking out the language I quoted in each of the proposed new sections 29.22 through 29.24, and those are 29.22(1)(c), 29.23(1)(b), and 29.24(1)(c). These TPM restrictions expressed right in the text of the supposed consumer rights are at the very least redundant, and at the most a contradiction of the consumer rights that are supposedly granted in these sections.
As for the larger technical protection measures in proposed new section 41 and what that means for consumers and other public uses of copyrighted content, CCI understands the Canadian Library Association has written a proposed amendment to the committee of the definition of “circumvent” that will “ensure Canadians' ability to invoke their full rights as information users by allowing them to bypass digital locks for non-infringing purposes”. We support that amendment.
With regard to a positive in the bill, we welcome the amendments to the fair-dealing right, including specific listing of education, parody, and satire. However, again CCI is disappointed that the acknowledgement of rights like this that promote the public interest can be limited by digital locks.
Finally, CCI has a specific amendment to suggest to the committee. I have provided it to the clerk in both languages, and I do hope you have a copy before you.
We were very pleased that the bill creates a category of non-commercial infringement for statutory damages that is limited to $5,000 for all violations. This gives consumers some measure of comfort that they will not face unreasonable and unrealistic demands from copyright-based business models of suing consumers who do not profit from infringement.
However, the proposed new section 38.1 as written in the bill still allows suing consumers as a business model. This section gives rights holders an election to sue for actual damages or statutory damages. Although non-commercial statutory damages are capped at $5,000, the rights holder may threaten very large actual damages in the hope that a consumer faced with a lawsuit settlement letter will pay up. The amount demanded could be far in excess of the $5,000 for non-commercial infringement, even if the likelihood of the rights holder proving actual damages in this amount would be practically zero.
The key phrase is “may elect, at any time before final judgment”. This allows the rights holder or agent to threaten to proceed under actual damages and to send that settlement letter right up until final judgment. This power must be removed from rights holders. It has been abused in the United States under the Digital Millennium Copyright Act.
In Canada, we have several Hurt Locker cases against individual consumers waiting in the bullpen for this act to pass. The solution is to require rights holders to elect at the outset of proceedings under the Copyright Act whether to prove actual damages or rely upon statutory damages when alleging non-commercial infringement.
Our amendment will help to ensure what we believe was the original intent of the bill: to guide rights holders toward the capped statutory damages for most non-commercial consumer infringements.
We thank the committee for its attention, and we're prepared to answer your questions.