Mr. Chairman and members of the committee, my name is Jesse Feder. Thank you for inviting the Business Software Alliance to appear today.
BSA is a non-profit trade association created to advance the goals of the software and information technology industries. BSA is active in more than 80 countries, including, of course, Canada. Our global mission is to provide a legal environment in which the industry can prosper.
As technology companies, BSA members are strong proponents of the freedom to innovate. They are also strong proponents of a vibrant Internet. Not only do our companies provide much of the technology that makes the Internet work, but our industry has staked a great deal on the future of cloud computing, which requires a functioning Internet.
The software industry also happens to be the world's largest copyright industry. We are critically dependent on copyright protection and enforcement to safeguard huge investments in new creative products. Combatting software piracy is a big part of what BSA does. With more than $58 billion a year in software theft around the globe, there is plenty for us to do.
Because of our dual interests in promoting innovation and fighting piracy, we know how important it is to strike the right balance between technology and copyright interests. We do not view these interests as irreconcilable.
As we see it, Bill C-11, broadly speaking, has three principal objectives: modernizing Canada's copyright law by implementing the WIPO treaties; addressing online infringement; and revisiting the balance of rights and exceptions in existing law. BSA strongly supports these goals.
When we examine the bill in light of these objectives, we find it to be a good starting place. Nevertheless, there are elements that we believe could be clarified or improved upon, which I will describe further in my testimony.
BSA commends the drafters of Bill C-11 for doing a thorough job of implementing the WIPO treaties. Two elements of WIPO implementation of particular importance for our industry are the right of “making available” that covers the posting of works on the Internet, and the protection of access and copy-control measures from acts of circumvention and trafficking in circumvention tools, which Mr. Eisen already spoke to. These are critical legal tools in the Internet age, and we look forward eagerly to their enactment.
Going beyond WIPO treaty implementation, Bill C-11 includes additional provisions to address online piracy. Although unlicensed software used by businesses is by far our industry's biggest piracy problem, online piracy is a serious and growing problem as well.
At the same time, we recognize that the Internet is used overwhelmingly for legitimate purposes. Enforcement tools need to be crafted in a way that does not harm the Internet or infringe on legitimate conduct.
BSA believes that fighting online infringement works most effectively when it is a cooperative effort by right holders, intermediaries, and end users. Unfortunately, we don't believe that the bill will quite get there.
The bill creates a new cause of action against those who provide services on the Internet that are designed to enable acts of infringement. At the same time, it creates blanket immunities for ISPs, requires ISPs to forward notices of claimed infringement to subscribers, and limits remedies against direct infringers if the infringements are for non-commercial purposes. In effect, the weight of enforcement falls largely on a narrow category of technology providers whose offerings enable infringement; enforcement against direct infringers is made more difficult and uncertain; and ISPs are largely relegated to the role of bystanders.
BSA agrees that those who, by their conduct, induce, encourage, and assist others to infringe, or who build their businesses on others' infringement, should be liable as infringers. We believe that is the kind of conduct the bill has in its sights. Unfortunately, the new cause of action is undercut by the unavailability of statutory damages.
Our biggest concern with the bill is the role it envisions for ISPs. We readily agree that ISPs should not bear the burden of policing the Internet, nor should they face liability for damages for simply operating a network. They should, however, cooperate with right holders by taking action to curtail infringing conduct when it is brought to their attention, or is so blatant and obvious that it cannot escape their notice.
In this context, it's important to draw a distinction between hosted infringement and peer-to-peer infringement.
For hosted content, ISPs should be required to remove files expeditiously, when they receive a notice of claimed infringement, or become aware of facts or circumstances from which infringing activity is apparent. Subscribers should have the right to dispute such a notice, and have the content restored unless the right holder commences a lawsuit. This is the approach taken in many jurisdictions around the world. Experience has shown it to be effective and minimally intrusive.
Content on peer-to-peer networks presents a bigger challenge, since the remedies in that space are far more intrusive. For content that is not hosted on an ISP system or network, notice-forwarding, as proposed in the bill, is a good first step. Beyond that, BSA supports voluntary arrangements between ISPs and content owners to use ISPs' terms of service agreements to sanction repeat infringers. If sanctions are to be imposed on subscribers under colour of law, subscribers must be given a fair hearing before an impartial third party prior to imposing any sanctions.
To create an incentive for cooperation by ISPs, the liability limitations ought to be conditioned on ISPs taking the steps I just described. In addition, right holders should be permitted to obtain an injunction against an ISP to halt infringing activity.
Finally, the provision on immunity for hosting should not apply to liability under the proposed enablement provision. It would not make sense to grant immunity to an entity that, by definition, is a bad actor.
With regard to statutory damages, we are concerned that Bill C-11 would limit their availability against non-commercial infringers. This would have a detrimental effect on the deterrent value of copyright protection. It also would put an unfair burden on right holders in the context of online infringement, where it's often difficult or impossible to quantify damages. Whether or not an infringement is carried out for commercial purposes, it can have a significant commercial impact. We see no justification for holding non-commercial infringers any less accountable for their behaviour.
Time does not permit detailed discussion of the many new limitations and exceptions proposed in the bill, but I would like to make three brief points.
First, computer programs are already subject to exceptions under section 30.6. A number of the proposed exceptions would overlap these existing exceptions. We believe the more specific exceptions of section 30.6, rather than the new general exceptions, are what should apply to computer programs.
Second, the proposed amendment of section 30.6 to override contracts should be stricken. Nearly all software is licensed to users. The licence model has been employed by the software industry since its inception, and has been critical to the industry's success. Licences allow software creators to grant a clear bundle of rights to their customers, including rights more extensive than those in section 30.6. We are not aware of any real-world problems under the existing provision, and urge that it be left alone.
Third, the bill proposes a new interoperability exception inspired by article 6 of the EU's 1991 computer programs directive. The directive contained a number of safeguards to ensure that the exception would not be used inappropriately. Those safeguards ought to be included in proposed section 30.61.
Thank you again for the opportunity to testify today. I'd be happy to answer any questions if the opportunity presents itself.