Evidence of meeting #5 for Bill C-32 (40th Parliament, 3rd Session) in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was copyright.
A recording is available from Parliament.
5:05 p.m.
Partner, McCarthy Tétrault, Co-Chair of Technology Law Group, As an Individual
Can I answer that very quickly?
5:05 p.m.
Conservative
The Chair Conservative Gord Brown
I don't have a problem with that.
Is that all right with the committee?
5:05 p.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Mr. Geist didn't get a chance to respond to my comments either. I think if they want to bring it up in the next round....
5:05 p.m.
Conservative
The Chair Conservative Gord Brown
We'll come back to you on that.
It is your turn, Mr. Cardin, for five minutes.
December 1st, 2010 / 5:05 p.m.
Bloc
Serge Cardin Bloc Sherbrooke, QC
Thank you, Mr. Chairman.
Lady, gentlemen, welcome.
I wish to ask you if we might be provided a copy of your brief or of your thoughts, all of your thoughts, relating to Bill C-32. You know that in the context of a committee such as this one, you do not have the possibility to express yourself completely. It would therefore be greatly appreciated.
I would like to give you the opportunity, Ms. D'Agostino, to express yourself further, to go into the matter more in depth. You opened the door earlier to a discussion with regard to adequate compensation for the works of creators, and you also expressed the desire that someone invite you to pursue this reflection. I would like to hear your views on this matter.
5:05 p.m.
Professor of Intellectual Property, Osgoode Hall Law School, York University, As an Individual
Sure, I'll do that with pleasure. Thank you very much.
Perhaps I might start this comment by picking up on a question that Professor Geist was asked and his comment about the creator's choice.
Of course there are different models that are evolving, in large part due to the technologies that are enabling these, but sometimes authors have no choice. We see litigation on this. There is, for example, the Robertson case, which is before our courts. There are standard-form contracts that are unclear and that are very much in place, and authors are forced to sign those. This is very much the case for freelance authors, because we do not currently have a copyright framework that is able to address those issues.
Some of the provisions that we might seek in a creator-friendly act, if you will, are some that we see more in the civilian jurisdictions. Quebec is an example, and I've written about this. I have a book that just came out, called Copyright, Contracts, Creators: New Media, New Rules, in which I discuss and itemize and study the issue, and I look at the copyright contract issues that might help creators.
In a sense, the copyright is as good as the piece of paper it's written on. If creators lose the ability to have control over their work, then their copyright really is worthless, so there need to be more robust provisions in the Copyright Act to animate those rights, and those would relate to the copyright contract issues.
In civilian jurisdictions there is a litany of terms. I'll just list those. You have them in Quebec, and in continental Europe there many different provisions, including contract formation and interpretation rules; purpose-of-the-grant rules; rules on use, scope, and duration; strict interpretation rules; and remuneration clauses. That's all across continental Europe. These are things we do not have here, because there is, in a sense--and this is the balancing that goes on--freedom of contract in the common law. It is believed that parties are free to contract, but we don't see this happening for all creators.
5:05 p.m.
Bloc
Serge Cardin Bloc Sherbrooke, QC
I would like to come back to the levies proper. A poll published in January 2010 said that 71% of Canadians are of the opinion that the present 29¢ levy on blank CDs is fair for consumers, whereas 71% of Canadians argue that the levies on MP3 players and iPods should be of $10 to $20. We know that thousands of songs can be copied through these devices.
The conservatives clearly call these things "taxes", but we prefer to call them "levies", which are in fact compensation for the artist for his or her work.
What is your position with regard to levies that could be required of the owners of MP3 players and iPods? If we enforce a $10 to $20 levy, as was suggested in the poll, given that we are talking thousands of songs, it would not be much, considering also the price of these devices. What do you think of levies that could be applied to MP3 players and iPods?
5:10 p.m.
Partner, McCarthy Tétrault, Co-Chair of Technology Law Group, As an Individual
Thank you very much, Mr. Cardin.
With respect to the terminology, I can actually see both sides of that question. When somebody buys a BlackBerry or an iPod at Future Shop or wherever, an amount is added. Is it a tax? It has an attribute of having an extra amount.
Looking at it from the creator's side, they're looking to be paid a royalty, so there are two sides to it: on the one hand, an amount is added; on the other hand, an amount would go to the creator.
In terms of the levy, I assume you're asking me this question in my personal capacity. My own view is that setting a good marketplace framework is the best approach to this. I don't believe a levy would solve the file-sharing problem. A levy may play a part, but it's certainly not the answer. The answer is good marketplace rules whereby creators can have innovative business models and hope to be able to innovate.
5:10 p.m.
Bloc
Serge Cardin Bloc Sherbrooke, QC
It is a little bit as if you were saying that the manufacturing of the iPod cost money. It is as if we went about telling the people who worked in the manufacturing of iPods or MP3 players that they would not be entitled to their remuneration.
In order for people to receive royalties, are there other means than requiring a said amount for every iPod purchased? In the end, we must find tools to enforce levies, which are creators' remuneration. Would you have any suggestions in this regard?
5:10 p.m.
Partner, McCarthy Tétrault, Co-Chair of Technology Law Group, As an Individual
Mr. Cardin, I agree with you that this is all about ensuring that ultimately artists get paid and are rewarded for their work. I think everyone would have to agree that uncompensated uses are detrimental everywhere.
My own view is that we do a number of things. The first thing we do is to get rid of the wealth destroyers, who result in a lot of uncompensated copying. Second, we create rules such that people understand that the proper norm is not to do illegal copying; the proper norm is to buy from iTunes or some other legal marketplace. Then there's compensation through those channels.
The next is to send those signals through statutory damages. If you look around the world, you could take Britain as an example. Britain does not have a private copy levy. Britain decided that a better approach would be not notice and notice, but a notice with a potential for there to be a sanction--not that anyone would ever want to have a sanction, but the point is that studies show that if people know they could get a notice and there could be a sanction, between 70% to 80% of them simply stop. You're never going to get the ultimate hacker to stop, but I don't think we design laws to deal with the end case.
5:10 p.m.
Conservative
The Chair Conservative Gord Brown
Thank you very much, Mr. Sookman .
We're going to have to move on to Mr. Del Mastro for five minutes.
5:10 p.m.
Conservative
Dean Del Mastro Conservative Peterborough, ON
Thank you very much, Mr. Chair.
This is a fascinating conversation, but I think there's a lot of confusion. First I'd like to respond to some of what I've heard, and this isn't my question.
Mr. Sookman, it seems you've indicated that the intent of the bill is bang on what you're looking for, especially in relation to the BitTorrent sites and so forth. You're looking for some wording changes to tighten the bill so there aren't any loopholes. Perhaps you could recommend in writing to the committee where you'd like to see the amendments you've spoken about, specifically with respect to enabling infringement.
Ms. D'Agostino, just to shorten a little bit what you said, we need to define “education”. If you have a recommendation as to how the bill might do that, I'd love to see it.
Mr. Geist, I still feel there's an awful lot of misunderstanding on the opposition side with respect to what fair dealing means and what they are proposing, which sounds a lot more like free dealing. They are indicating that if something is fair dealing, therefore it's all going to be free. For the benefit of everyone in the room, could you please explain the difference between fair dealing and what has been termed “free dealing”, which is what I think has been presented in some cases?
5:15 p.m.
Canada Research Chair, Internet and E-commerce Law, University of Ottawa, As an Individual
Sure.
The notion of free dealing is one that is foreign to our copyright law, and indeed it's foreign to most copyright laws that I'm aware of. It is the notion that someone has the unfettered right to copy without any sort of compensation. A rights holder can choose to make their work available in that fashion, but you wouldn't typically find that in a copyright law.
Our law is no different. What our fair-dealing provision provides, as I mentioned at the outset, is essentially a two-stage test. It first identifies the kinds of specific categories that may qualify as a potentially fair dealing. Other countries have done away with this altogether. For example, in the United States there are no categories at all. Anything can potentially be, in their terms, a fair use. In Canada you first actually have to qualify for one of those categories. The changes within Bill C-32 expand the categories by establishing that parody, satire, and education would be new categories, but, critically, there is a second step, and this would be true for the United States and would be true here as well.
That second step is a full fairness analysis to determine whether or not the copying itself actually is fair. It is a six-part test that the Supreme Court of Canada has identified to take a look at how much is being copied, what alternatives exist, and what the economic impact or the impact of the person who is engaged in those sorts of copying is. That's the test that's used. There's a similar test in the United States.
Now, no one would ever ague that because the United States has fair use with no categories, any copying of any sort is perfectly permissible in the U.S. There are clearly limits to fair use, limits that are based upon this test.
Precisely the same situation is true here in Canada, where there are limits established by the courts. You heard me suggest that if there are real concerns about this, we could codify it within the legislation. What those limits ensure is that we are not talking about tens of millions of dollars in losses in unfettered copying whereby people will simply say, “I qualify for a category, so I can copy to my heart's content.” They will still have to ensure that the copying itself is fair.
5:15 p.m.
Conservative
Dean Del Mastro Conservative Peterborough, ON
For my second question, I want to go back to something Mr. Cardin raised, which is the issue of a royalty. A royalty is another way of saying “tax”, since it was money that used to be collected for the royals, and later it became known as a tax. On the issue related to what we've deemed “the iPod tax”, I'd like all of your comments, because I think this debate is taking over the much larger issue, which is re-establishing a marketplace. That is where artists and creators actually make the bulk of their money, and that is where they're really getting hurt.
Mr. Sookman, would you say it's more important—and I'll allow everybody to come in on this—that we move forward on this bill re-establishing a marketplace and shutting down the pirate sites, or that we get bogged down in a fight over whether there should be an iPod tax?
As well, Mr. Geist, you can still comment about Mr. Lake's question, if there's time.
5:15 p.m.
Partner, McCarthy Tétrault, Co-Chair of Technology Law Group, As an Individual
Thank you very much for the question.
There are a lot of issues that are not in this bill. If you looked around the country, people would say that they'd asked for things in the consultations, but they're not seeing them in the bill. If we took every one of those and said that we can't move forward on copyright until we get everything in, we would go nowhere.
I acknowledge that the issue of the levy is important to some actors, but that said, my view is that we need to move forward. My view is that we need to solve clear and pressing problems that currently exist and create a marketplace framework. My belief is that we should do that and that this bill should not stall and die.
5:15 p.m.
Professor of Intellectual Property, Osgoode Hall Law School, York University, As an Individual
We do need to create a vital market framework, and with it we need the provisions to sing loud. We need clarity and understanding for all Canadians. Currently there needs to be some tweaking of the provisions outlined in Bill C-32 as it's configured, but we need to move forward.
5:15 p.m.
Canada Research Chair, Internet and E-commerce Law, University of Ottawa, As an Individual
I think there's a lot of attractiveness to the concept of a levy. I think the problem to date has been that many of the proposals, with all respect, haven't addressed a lot of the complications that arise in the context of a levy.
There are problems of marketplace distortion in that you're going to have consumers buying some of those same products outside the country. The result will be that we will lose tax dollars, retailers will get hurt, and the artists won't get anything at all. I think there are problems of distorting the actual prices of some of these products, if you use the model that we have with CDs. I think also that with the exception of the songwriter association's proposal, which I think has the most merit as a starting point for discussion, there is a little bit of bait and switch that takes place here, with all respect. The argument is that since there's a lot of file sharing taking place, we need to compensate it by way of a levy, yet outside of the songwriters, I haven't seen any group acknowledge that if we were to have that levy, the file sharing they are decrying would be legalized.
I don't see how you can have your cake and eat it too. If we're going to propose establishing a levy to compensate for the copying that takes place—by and large, as we all know, through file-sharing networks—then the quid pro quo quite clearly ought to be full legalization of that copying, but I have not yet seen that come forward as a proposal. Usually it's just that we want to port the same levy to other devices.
5:20 p.m.
Conservative
The Chair Conservative Gord Brown
Thank you very much.
We're going to have to wrap up the second round. We have just a few minutes left. With the support of the committee, I'd like to give the witnesses a moment or two to finish up any points they were in the middle of.
Go ahead, Mr. Geist.
5:20 p.m.
Canada Research Chair, Internet and E-commerce Law, University of Ottawa, As an Individual
I'll take the opportunity to respond to Mr. Sookman's earlier comments in which he suggested I'm advocating all sorts of free copying. I hope you'll agree that over the last couple of hours that's not what you've heard. I'm calling for a balanced approach to copyright, not one in which wild, uncompensated copying is taking place.
It's also important to talk to the specific business issue Mr. Sookman raised. He's talked about the reliance that some businesses have on things like digital locks. Let's also recognize that a large number of businesses are reliant on the absence of digital locks, or at least rely on balance within those digital lock rules. That's why you have various groups--the CADA and the BCBC, and other groups that may ask to appear before you--that have expressed concern about the way the digital lock rules themselves are framed within the bill, because they believe it puts them at a competitive disadvantage.
Consider just one example. I was talking earlier with Mr. Rodriguez about my iPad, which I mentioned my kids love, and so far I am a satisfied customer. We all know competing devices are going to come onto the market, including one from one of Canada's most important technology companies, Research In Motion. If I'm going to switch off the iPad and go to the PlayBook, consider what happens if the format shifting provision that exists right now continues to have that digital lock provision in there. All the investments I've made in electronic books and movies are confined to a specific format on the iPad. Unless I pick that digital lock, which I'm not now entitled to do, I can't switch it over to the PlayBook. In fact, what happens is that the cost to consumers in switching isn't limited to the device; it's now the hundreds or potentially thousands of dollars that they've invested in content. That hurts not just the consumers; it also hurts some of our best and biggest companies in terms of their ability to compete in the marketplace.
5:20 p.m.
Conservative
5:20 p.m.
Partner, McCarthy Tétrault, Co-Chair of Technology Law Group, As an Individual
Mr. Chair, thank you for the opportunity. I'll just make a few points.
The first is that I think Professor Geist is absolutely talking about free copying. When it comes to the educational exception, one can copy up to a substantial part without infringing. Anything over or above that would normally be subject to compensation authorization. If you introduce fair dealing for education, the fairness factor is free, uncompensated copying.
The second is the format shift exception. If it's opened up so that anybody can do format shifting even when they buy something with a digital lock, that is significant, uncompensated copying that will only result in difficulties in the marketplace.
The assumption behind Professor Geist's remarks is that there is a problem. When I buy a CD, I don't have a problem. I can put it onto an iPod. It simply isn't a problem today. These laws have been in place in Europe for over a decade, and the problems that he's articulated simply don't exist.
The other thing to mention--and we haven't focused on this--is that because of the way the TPMs are structured, there are not only significant exemptions but also very significant regulatory powers that the government has to deal with any problems: first, it can deal with anti-competitive conduct; second, it can create new exemptions wherever they're needed, and that includes exemptions that might be needed to exercise fair-dealing rights, which include research private study and instruction in an educational context; third, the bill contains provisions that let the government also require copyright holders to make works available in a format they can use if their exceptions are things they can't exercise.
There isn't a problem and there's not likely to be a problem, but in the event that there is one, they contemplate that it can be solved because of the way the TPM provisions are structured.
I can tell you that the structure we have is better than the structure in the U.S., which only has rule-making. It is better than in the EU, which only permits a power to make works available. This is a combination, and with all these things in place, I just don't know what the big concern is.
5:25 p.m.
Professor of Intellectual Property, Osgoode Hall Law School, York University, As an Individual
I'd like to re-emphasize a few points and expand on others.
It's all about balance, right?
When we look at rights holders' and creators' rights, my concern is that if we don't do some tweaking to the existing exceptions that are now in the act, there's going to be an unintended erosion of rights holders' and creators' rights.
I have mentioned fair dealing and user-generated content. On fair dealing, one thing I haven't talked about is my own analysis of the six factors. When you line up Canada with respect to the U.K. and the U.S., you see that the court says there are more or less six factors, and there could be more. At the same time, in terms of the effect of the dealing on the works--meaning the actual market considerations, the market substitute--the Supreme Court of Canada says that it's not the only factor, nor the most important.
We know that this is not the case in the U.K. and not the case in the U.S. What we have in Canada with CCH is a broad and liberal interpretation of both the actual purposes and the fairness factor. Left unchecked, the way it's configured now means that when you compound education plus CCH, you will have something broad, unless we are able to itemize exactly what we mean. I put forward one suggestion on how to do that and I'm happy to also put it in writing for your consideration.
On the UGC, something we might think about is transformative uses. I have before me one of our Osgoode students, who is taking a stab at drafting a provision on transformative uses so that you have a new work--a different purpose, an identity, a message, a new context--that can help tweak and fix that provision.
5:25 p.m.
Conservative
The Chair Conservative Gord Brown
Thank you very much to our witnesses. Thank you for your informative presentations.
Go ahead, Mr. Lake.
5:25 p.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
I have a quick point of order.
Several changes were suggested by the witnesses over the course of the meeting. I would like to officially ask the witnesses to submit potential amendments to the committee in their own words so that we can review those proposed amendments.
Could you do that, please? Thanks.
5:25 p.m.
Conservative
The Chair Conservative Gord Brown
Thank you again to our witnesses. It was very informative, and I know the members of the committee appreciated it very much.
This meeting is adjourned.