Bill C-32 (40th Parliament, 3rd Session) Committee on Feb. 10th, 2011

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you, Mr. Chair.

If you want to know when the next election is going to be—I want to put this into our official Hansard—you ask the taxi drivers. They know everything in this city, and they know better than any political staffers.

My colleagues in the Conservative Party are coming forward with a very interesting legal position. Their position is that the market is superior to legislated rights in the law. If the market decides something, it trumps rights that have been actually codified.

I'm interested in this because it seems to me that they're offering a series of rights that you might not be able to access, and we're being asked to pass that through the House of Commons.

Does it stand in any other form of legislation that you create a two-tier set of rights, one that exists in an analog world and one that can simply be trumped by a corporate decision in L.A.?

[Nathalie Des Rosiers]

Our position on digital losses is that we ought to create the possibility for the consumer to have access to material that he or she has bought with the intention of not breaching the law. That's our concern. I don't know whether that's....

Do you want to comment?

[Howard Knopf]

Here is a very good example of why we need to allow consumers to exercise the benefits of technology by enjoying the software that they've paid for or that their family has sent over from India with regional coding, as well as by using their hardware.

In 1982—I'm answering your question, Mr. Angus, but it's also relevant to the previous question from Mr. Fast—Jack Valenti, who was the head of the Motion Picture Association of America, very famously told Congress that the VCR was to the American entertainment industry and the American economy as the Boston Strangler was to the woman alone. He wanted to have the VCR crippled at the time by removing the TV tuner part of it. He said, “Oh my God, people are going to tape things in the afternoon and watch them at night”, and Sony said yes, that was the idea.

We all know what happened: two years later, the Supreme Court said to Jack that it was good technology and it was going to go ahead; it was fair use. The rest is history. Congress and the Supreme Court saved the motion picture industry from its own foibles. Everybody was better off by allowing consumers to use this new technology.

What we're saying is that consumers should have the right to use the hardware and the software that they have legitimately acquired, so if they want to make a copy of an expensive Blu-ray to protect it from being scratched by the dog or broken by the kid, there's no problem with that. There should be no problem with that. If they want to make a copy to play in their car and they've already paid for it, there should be no problem with that.

Will the industry get it right by itself? Mr. Valenti showed that if they can possibly get it wrong, they will, to everybody's detriment—not just theirs, but society's.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Well, I think the Valenti example is excellent, because yesterday's pirates are now the ones demanding protection. We can go all the way back to when Hollywood was an outlaw pirate haven escaping the Thomas Edison Corporation copyrights. They created Hollywood. Then Sony were the pirates who were going to strangle the Hollywood industry because they were pushing the VCR technology. Now Sony, of course, wants to sue every kid who downloads one of their movies. What goes around comes around, and it will continue on into the next generation.

I hear my colleagues over on the other side with their blind faith in the market. It doesn't correspond to reality. When young people who buy a product try to access it and find there's a lock on it, they're told to go and talk to Sony and work it out with them. What they do is simply go and download it.

I don't know if you have seen the Herefordshire, U.K., study on downloading music; young people don't mind paying for music, but they want access. If you deny them access, they'll get it anyway.

I'm interested, though, in terms of the digital lock provisions. I know article 10 of the world copyright treaty says that within states that are signatories to the world copyright treaty, exemptions that have been defined in national law can be carried forward into the digital realm. An example is the right to parody and satire. The right to be able to extract something for parody and satire can be carried forward. It's within the WIPO Copyright Treaty. Many of our WIPO-compliant countries—19 or 20 of them at least—have language that clarifies the role of the digital lock. It protects the digital lock from counterfeit and prevents people being able to take works unfairly, but it defines the rights and guarantees the right of a nation state to allow the exemptions that have been created by law to exist.

With regard to the Conservative position on digital locks, would you suggest that it's not even more extreme than in the United States, where recently there were definitions of right of fair use to limit digital locks?

My question here is this: how do you see Canada defining digital locks in terms of our obligations internationally?

[Howard Knopf]

Mr. Angus, I agree that the WIPO treaties permit much more flexibility than is in this bill. We agree with that. There's no problem under the treaties about having exceptions as long as they meet the three-step test and other provisions of law, so we can allow for fair dealing and for backup copies as long as they don't impair the market or cause economic harm. We can allow for all of those things, and we can allow consumers to protect themselves.

You mentioned the example of Sony. Much more recently than 1982, just three or four years ago, Sony famously issued this CD with the so-called rootkit on it that destroyed millions of people's computers. It didn't just phone home; it went further. It crippled a number of people's computers. The irony was that under the U.S. law at the time, it was actually illegal to try to repair your computer, because you would be interfering unduly with the TPM. That's an extreme example. Obviously corporations don't wish to do that in the marketplace, but it happened.

Yes, we can have these exceptions, and those who say we can't are simply wrong in law, both international and domestic. The WIPO treaties have a great deal of flexibility, and if you read the detailed analysis, the legislative history of the WIPO treaties, which has been set out quite well in Professor Michael Geist's book, that's very clear. We can have those exceptions that allow users to do something that would otherwise be infringing.

[Charlie Angus, NDP, Timmins—James Bay, ON]

My last question involves a concern I have with this legislation. I've been approached by many people who ask why I'm worrying about the digital locks and whether I really think the government's going to go into people's homes and check the fact that they're going to make backups. As well, people say that if they are told they can't access something, they're going to access it anyway. The reality is that the vast majority of consumers will simply ignore it.

My concern here is that for copyright to succeed, there has to be a public belief in the legitimacy of copyright. We have to respect copyright. If you put something in law that isn't going to be enforceable, then people believe that copyright is not enforceable, so they tend to ignore it. Consumers will ignore the provision, but educational institutions and research institutions won't. I'm worried--and I'd like to hear your opinion--about the effect on research. A digital lock in place against reverse engineering, for example, can make it illegal to study or do development. We've already seen much concern out of the U.S. in terms of research institutes basically having to have legal people on staff to deal with this issue.

[The Chair, Conservative, Gord Brown]

I'm sorry, Mr. Angus, but that'll have to be the last word.

Thank you very much.

We will suspend briefly.

[The Chair, Conservative, Gord Brown]

I call this 12th meeting of the special Legislative Committee on Bill C-32 back to order.

For the second hour, we have three witnesses with us. We have, from the Professional Writers Association of Canada, Alexander Crawley, executive director; from the Société québécoise de gestion collective des droits de reproduction, Hélène Messier, executive director; and from Union des écrivaines et des écrivains québécois, Danièle Simpson, présidente.

For five minutes, we'll hear from Mr. Crawley.

[Alexander Crawley, Executive Director, Professional Writers Association of Canada]

Thank you very much.

Good afternoon. My name is Alexander Crawley. I am executive director of the Professional Writers Association of Canada.

We represent the interests of Canadian freelance writers of non-fiction works and have been doing so for 35 years. We welcome this opportunity to offer our perspective on this reform process that is so vital to Canada's success in adapting our law to enable a thriving digital economy.

We will begin by reflecting on the committee process itself and will then highlight the issues that most affect writers and the direction we feel you must take to balance and strengthen Bill C-32. Finally, we will tell you what we like in Bill C-32.

First, we take you back to the observation of a witness you heard on the first day you opened the process beyond politicians and civil servants. Professor D'Agostino, of IP Osgoode, accurately informed you that individual creators are caught between corporate users of their works--that is, publishers, manufacturers, distributors, and retailers, and in the digital area, web-based services and ISPs--and the final recipients of our works, the individual users as consumers and as citizens. We need a law that clarifies our relationship with both types of users.

With appropriate recognition of our rights, we can negotiate with our industry partners, but we can't sustain our businesses without the fundamental principle, in the law, of compensation for use.

Next, we remind you of the testimony of freelance writer Douglas Arthur Brown on December 13 of last year. Mr. Brown provided clear evidence that illegal copying in the education sector is a real danger that is going on even now, and that by adding the term “education” under fair dealing, this bill will bring about a huge spike in such market-destroying behaviour.

We finally go to February 1, when Bill Freeman, freelance writer, and Marvin Dolgay, freelance composer, clearly outlined how this bill, as drafted, imperils their livelihoods and--more significantly, from the public interest perpective--imperils the very possibility of a new generation of creative Canadians sustaining themselves and a digital economy.

Our members' writings appear in magazines and newspapers of every size and description and in every region of Canada, online and in print. Digital technologies make their replication easy and efficient and provide the diversity of voices that give Canadians access to the rich and varied perspectives on which a healthy society depends. All of our writers encourage the copying of these works by educational institutions, corporations, government agencies, ancillary publications, online aggregators, and, of course, individual Canadians, but as with any small business, they need to be compensated for these uses of their property.

A strong system of collective rights administration is by far the most practical method of assuring appropriate compensation for these secondary uses that abound in the digital marketplace. We can and will continue to negotiate primary uses with our partners in industry. Everyone recognizes that models are changing and that the new tools can allow creators to reach the market much more efficiently than ever before. Indeed, we think we can compete with old models if we are allowed to develop our businesses through appropriate recognition of our rights in our own works.

For PWAC, the Professional Writers Association of Canada, these are our priority issues with Bill C-32.

First is the addition of “education” as an exception under fair dealing. This will deprive PWAC members of between $500 and $5,000 a year in income from secondary uses through our collectives. If the committee can't find its way to delete this provision for political reasons, we ask that at a minimum you define its application in such a way as to strengthen, not weaken, collective rights administration.

Second, on the test for fairness under fair dealing, we support the inclusion of the Berne three-step test that fulfils our international obligations, and we are heartened by indications that the committee will invoke it through the amending process. We certainly hope you do. We prefer CCH, by far, for obvious reasons.

Third, concerning the limit to statutory damages, the recent settlements in the class action suit Robertson v. Thomson and a subsequent suit involving Torstar Corporation and other publishers showed the level of damages to freelance writers that infringement can cause. The amounts there come to over $15 million paid to freelancers by major Canadian publishers. We have provided copies of the Supreme Court decision, in the first case, for your better understanding of the issue.

We have no objection to the concept of limiting damages for individual non-commercial infringement, but the system currently in place for institutional and commercial infringements should be retained.

With respect to the safe harbour provisions for ISPs, we need those who deliver our works to their markets to actively support the principle of compensation for use. Notice and notice will not change the culture of rampant illegal copying. We need a graduated response that contains a real incentive to diminish it. Better yet would be a new business model based on a true partnership with ISPs along the lines proposed by the Songwriters Association of Canada, but we understand that this is beyond the scope of this committee.

These are our primary issues with Bill C-32, as drafted.

On the positive side, we do appreciate some of the provisions of the bill that extend rights recognition to our fellow freelancers, such as photographers and performers. However, we fear that the weakening of our markets through the new exceptions undermines even these gains.

As to the much debated technical protection measures, we acknowledge that our industry partners in the corporate sector may find them useful, but they do not give individual creators the tools we need to fully exploit digital technology through innovation.

Thanks for your attention. I'll be glad to answer your questions, to the best of my ability, on our oral presentation or on the written brief we have provided.

[The Chair, Conservative, Gord Brown]

Thank you very much.

Ms. Hélène Messier, you have five minutes.

[Hélène Messier, Executive Director, Société québécoise de gestion collective des droits de reproduction]

Thanks for the invitation.

Copibec is a copyright collective society representing over 25,000 Quebec authors and publishers. It administers the rights of reproduction on paper and digital reproduction of newspapers, books and magazines, including the artistic works that they contain. Bill C-32 calls into question each of the fundamental principles underlying copyright.

By introducing approximately 40 new exceptions, it takes away the exclusive right of authors to decide for themselves whether or not they will authorize the use of their works. It also strips creators and other copyright owners of compensation that they already receive, as in the case of use for the purposes of examinations or distance education. These exceptions jeopardize substantial revenues by introducing fair dealing for education purposes—a vague and unnecessary concept. They compromise the development of new markets or existing markets, such as the reproduction of a work to display it for educational purposes or training, the production of non-commercial user-generated content, or reproduction for private purposes. What will be left of the fundamental principles which underlie copyright if authors are denied the right to dispose of their works as they see fit and to receive compensation? All that is left is the right to put digital locks on their works.

That solution does not suit the copyright owners represented by Copibec. Why? Because it is impossible to put a digital lock on a 200-page book or on the hard copy of a magazine. Furthermore, copyright owners have generally decided to provide digital books without locks to better meet consumer needs by fostering interoperable formats. Quebec publishers prefer to incorporate a watermark into the digital version of a book to allow traceability in cases of infringement. However, this is not a solution that copyright owners represented by Copibec consider acceptable, particularly because the largest users of literary works are institutional users or individuals, who almost always make copies for non commercial purposes. Bill C-32 provides for pre-determined damages ranging from $100 to $5,000 for these purposes, which is clearly less than it costs to institute court proceedings.

The bill attacks another fundamental principle of copyright: collective administration. By eliminating or jeopardizing the payment of large amounts to creators, the bill weakens copyright collectives, which withhold a percentage of the royalties collected to carry on their operations. And yet copyright collectives are an essential link in the chain, when it comes to copyright administration. That is what the legislation acknowledges in its definition of “commercially available”, which is found in section 2 and includes both purchasing a work on the market and obtaining a work through a license granted by the copyright collective. It is odd that Bill C-32 eliminates all references to collective administration in every case where mention is made of commercially available work.

If access to copyrighted works is guaranteed, why propose so many exceptions? On the contrary, use of exceptions must be sparing and carefully thought out, because they always involve an expropriation of rights. That is why the international community adopted strict rules in that area under the Berne Convention, signed by Canada in 1928, which have been since been included in many different treaties, including the well known WIPO treaties.

It is therefore surprising to see that the three-step test was not even considered during the drafting of Bill C-32. That test provides that exceptions must be limited to special cases that do not conflict with the normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the author.

The proposal to broaden fair use to add education will jeopardize the collection of more than $10 million in Quebec. It will certainly cause unreasonable prejudice to copyright owners and probably breaches Canada's international commitments. That is certainly the view of a number of stakeholders, including the International Association of Scientific, Technical and Medical Publishers, the International Publishers Association and the Quebec Bar, to name only a few.

Teachers will also have to cope with the vague wording of this provision, which will only be defined over time, through long and costly court proceedings. This provision is unnecessary, because access to copyrighted works is already guaranteed through the licenses administered by copyright collectives across Canada.

Last December, Ms. Line Beauchamp, the Quebec Minister of Education, Recreation and Sport expressed her disagreement with the education exception proposed in Bill C-32. Very recently, the Quebec Federation of School Boards, an important representative of users, as well as all the primary and secondary French language schools in Quebec, also expressed its opposition to Bill C-32. I am going to give that organization the last word. Here is how it stated its position:

The adoption of this change would not only adversely affect the right of authors to allow or disallow the use of their work, but also adversely affect their right to fair compensation. We understand that the government wants to facilitate access to copyright-protected works, but we believe that access to a copyrighted work must occur in a context where the author's rights are respected. Accepting the principle that access to copyrighted works is synonymous with offering them free of charge would negate the importance of authors' contribution to our children's education, and weaken the school publishing sector. Moreover, the concept of fair use for education purposes is imprecise and would not allow educational institutions to apply clear rules to copyright administration, something that current agreements with copyright collectives now enable them to do.

Thank you.

[The Chair, Conservative, Gord Brown]

Thank you.

Ms. Danièle Simpson, you have five minutes.

[Danièle Simpson, President, Union des écrivaines et des écrivains québécois (UNEQ)]

Good morning, and thank you for this opportunity to address you.

The Union des écrivaines et des écrivains québécois is a professional union founded in 1977 which now represents almost 1,400 writers.

The UNEQ is recognized as the association most representative of artists working in the field of literature under the Act respecting the professional status of artists in the visual arts, arts and crafts and literature, and their contracts with promoters—R.S.Q., c. S-32.01—and consequently speaks on behalf of all Quebec writers.

In the brief we are presenting today, we have chosen to analyze the clauses that concern us one by one, in order to clearly demonstrate the extent to which writers will lose out if the bill is passed in its current form.

The government is seeking to add to the Copyright Act a whole host of exceptions with the apparent goal of balancing the rights of creators and the interest of consumers. However, the vast majority of these exceptions provide neither for remuneration nor the possibility of control by the author of the work, which we automatically consider to be contrary to the spirit of an act that is supposed to protect creators.

Furthermore, the terms used in the often imprecise wording of the bill force copyright owners to look to the courts to define the scope of these exceptions. They will have to do that at their own expense, in order to receive only minimal damages, compared to the cost of such proceedings.

Thus there will not be an appropriate balance struck between creators and users, and only after lengthy legal proceedings will we know what is legitimate and what is not.

We would now like to look at the bill in detail, starting with clause 29, which concerns fair dealing for the purpose related of education, satire or parody.

It should be noted, to begin with, that the lack of any definition of the term “education” will enable any organization that offers training to claim that its purposes are educational and thus avail itself of the fair use provisions. Furthermore, free access to these works will deprive writers of fair remuneration. Because literary works circulate extensively in the educational sector, the latter represents a significant source of income for authors. To consider depriving them of the compensation they deserve when their works are the raw material of education is unacceptable. We are therefore recommending that the term “education” be struck from clause 29.

The addition of clause 29.21 aims to legalize the use of protected content by users who wish to use this content to create a new work which is then disseminated digitally at no profit, but with no due consideration for the fact that such new works may betray the spirit of the works used, something that simply mentioning the source cannot remedy. Such an exception violates an author's moral rights and should be removed.

New clauses 30.01 and 30.04 apply to educational institutions. The first one makes it possible for these institutions to communicate a protected work as part of a lesson using telecommunications. The institution must take measures that can “reasonably be expected” to prevent students from further disseminating the work, but no penalty is imposed should it fail to do so. Furthermore, the fact that educational institutions will not be obligated to pay authors for such use constitutes unprecedented prejudice which no one else involved in education would accept.

The second clause allows institutional institutions to use works available on the Internet for education purposes. At the present time, a work is protected under the Copyright Act as soon as it exists in some material form, whatever that may be. Clause 30.04 removes that protection in an educational setting. Yet collective administration would, in both cases, afford access to these works while compensating authors. We therefore recommend that clauses 30.01 and 30.04 be removed.

Clause 30.02 extends the license to photocopy by treating digital reproduction and print reproduction as one and the same thing, thereby allowing their costs to be assessed on the same basis, without regard for the possible dissemination of the work. We recommend that this clause be re-drafted to make a clear distinction between digital reproduction and print reproduction, with compensation adjusted accordingly.

As regards levies for private copying, the UNEQ believes that a modern Copyright Act should extend levies to new digital formats and provide compensation to all artists. in all areas, including literature.

With respect to those measures aimed at making Internet service providers accountable, the UNEQ believes that the notice and takedown system is the only one that ensure adequate protection of works disseminated over the Internet. The notice-and-notice approach is too weak and forces creators to police the web themselves, a burden that is disproportionate.

In summary, the UNEQ believes that Bill C-32, which purports to modernize the Act, actually greatly increases the number of exceptions, thus depriving writers and artists of fair compensation; denies their right to approve or not the use of their works; remains vague as to the meaning of the terms used in the bill, leaving it up to the courts to interpret them; sets laughable fines, compared to the costs that would be incurred; removes any accountability for Internet service providers; ignores Canadian copyright collective societies' successful negotiations; and endangers the book industry and the development of new markets in the educational sector.

We are therefore asking that Bill C-32 be completely overhauled so as to provide adequate compensation for the use of copyrighted works and to ensure that any exceptions are consistent with the terms of the Berne Convention. We are also asking that collective administration be recognized as the safest way to guarantee respect for the rights of creators and access to their works.

Thank you for your attention.

[The Chair, Conservative, Gord Brown]

Merci.

We'll start the first round of questioning for seven minutes.

Go ahead, Mr. Rodriguez.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Thank you, Mr. Chair.

Good morning and welcome to the committee. Thank you for being here.

Ms. Messier, you said that Bill C-32 is an attack on collective administration. This is not a partisan question, although those are strong terms: do you believe that it is a direct and voluntary attack on collective administration, or that it is an indirect effect—collateral damage, as they say?

[Hélène Messier]

I cannot presume to know what the drafters had in mind. However, what I noted is that wherever there was a definition including the concept of collective administration—for example, visual display of works or for exams—those exceptions only applied when the work was commercially available. The definition of “commercially available” had two parts to it: either the work could be purchased commercially or it would be available through licensing from a collective society. In both cases where that definition appeared, Bill C-32 removed the second part of that definition—in other words, collective administration.

It's obvious that by taking away compensation from authors or copyright owners that was channelled through a collective society, and by jeopardizing the livelihood of creators and copyright owners by forcing them to defend their rights before the courts, there will necessarily be fewer revenues collected by copyright collectives to cover their own administrative costs. As a consequence, they will be deprived of the possibility of distributing revenues to copyright owners.

Now, is that intentional or is it collateral damage? I will let you draw your own conclusions.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

No, because this is--

[Hélène Messier]

But it is surprising.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

This is not a partisan question. The solution may be quite different, depending on the original intent. The impact may also be different. One is more difficult to correct than the other. If it's voluntary, it will not be possible to do anything. However, if it's simply a collateral effect, there may be things we can discuss to try to correct accidental mistakes.

That is what I'm trying to understand.

[Hélène Messier]

I must say that even it was intentional, it would easy enough to correct. All you would have to do is reinstate the definition of “commercially available” as it currently appears in the Copyright Act.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Well, in that case, there would necessarily be some political debate.

[Hélène Messier]

That, too, is feasible.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Yes, but it leads to a more complicated political debate.

You referred to the introduction of 40 or more new exceptions through this bill.

[Hélène Messier]

Yes, I believe there are 46 exceptions.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

And how many affect you?