Bill C-32 (40th Parliament, 3rd Session) Committee on Dec. 1st, 2010

[The Chair (Mr. Gordon Brown (Leeds—Grenville, CPC)), Conservative, Gord Brown]

I call the meeting to order.

Good afternoon, everyone. This is meeting number 5 of the Legislative Committee on Bill C-32.

Today, first of all, I'd like to thank our three witnesses. We have Pina D'Agostino, professor of intellectual property at Osgoode Hall Law School at York University. Second is Professor Michael Geist, Canada Research Chair of Internet and e-commerce law at the University of Ottawa. Finally we have Barry Sookman, partner at McCarthy Tétrault and co-chair of the technology law group there.

On behalf of the committee, I'd like to thank all three of our witnesses for appearing today on such short notice. Thank you very much.

We will start with a five-minute presentation from Professor Pina D'Agostino.

[Prof. Giuseppina D'Agostino, Professor of Intellectual Property, Osgoode Hall Law School, York University, As an Individual]

I want to start by thanking the committee for inviting me as a witness on such an important issue in the history of Canadian copyright, which I care deeply about.

I offer my comments as a law professor at Osgoode Hall Law School and as founder and director of IP Osgoode, Osgoode Hall Law School's IP and technology program. I offer my comments without an agenda or interest in supporting any one stakeholder group. I aspire towards a balanced approach that weighs all the challenges the government faces and the various stakeholders' interests.

The bill is ambitious in its attempt to achieve this balance, as there are numerous provisions put forward that try to address the varying interests and challenges. Despite this valiant attempt, the bill does need fine tuning, since some issues are still left unaddressed and others are ambiguously addressed.

If we start with the policy that we want to have end-users--the public--enjoy works, that we want to ensure that authors have the ability to create and to continue creating, that we want to have creativity and innovation flourish, and that we want to have the greatest possible dissemination of works while ensuring at the same time that there's some viable means of compensation for the use of others' works, then this bill still needs some work. If we want legislation that is clear and understandable to Canadians, then we need to do better.

In the time I have I will focus on just a few points that can be rehabilitated in this committee.

My first point deals with the amendments proposed for section 29 on fair dealing. While it is salutary to have added “parody or satire” as a new purpose, I am still unclear as to why “education” was added as a new purpose under this provision. This new purpose is too broad and invites years of litigation to clarify it, which will lead to access-to-justice issues and will force the courts to resolve matters that are for the government to legislate with confidence in so doing.

What is the policy behind this provision? What problem is there with respect to education that is not currently addressed in the other sections of the act? If the government has something in mind, it should simply say so expressly and not purport to do so ambiguously through a catch-all term, hoping that whatever it is that is meant or might be meant is addressed. Significantly, there is no precedent case law for this purpose, and so the courts will be left to do the job of government. I should note that there is now ample case law on the other purposes.

How do we fix it?

Legislating the Supreme Court of Canada's CCH factors is not an answer. It does nothing to clarify what we mean by education. The government should pronounce itself on court decisions when it wishes to overrule them, not when it agrees with them, and certainly not when it has before it a unanimous Supreme Court of Canada decision, as indicated with CCH. It might, for instance, intervene to legislate a lower court decision it agrees with if it thought higher courts might overrule it, but it makes little sense to intervene and restate what the Supreme Court of Canada has already said.

So the question remains: how do we fix it? Do we legislate the Berne or TRIPS three-step test that restricts permissible exceptions in national legislation to certain special cases that do not conflict with the normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the author? I don't think this, by itself, is the full answer either. This would be inviting more ambiguity into an already ambiguous framework in defining for Canada what is meant by “normal exploitation”, what is meant by “unreasonably prejudice”, what the “legitimate interests of the author” are, and so on. It would run the danger that Canada's law would be determined in Geneva by WTO panels making decisions on the TRIPS provisions.

What we need to do to fix fair dealing with respect to education as a purpose is to isolate, at a very basic level, the problem we are trying to solve through legislation, and then express that problem.

If we know what it is, then we should say so. If we don't know what it is but have a sense that we need to do something, then I would suggest the use of a more flexible framework. For example, you could include a provision at the end of section 29 stating something like, “it is not an infringement of copyright to deal with such educational purposes in such manner as the Governor in Council may prescribe by regulation”.

This would allow for a more evidence-based approach and allow government departments with expertise to helpfully collect evidence and be specific on what they need to cure by legislation, and to be nimble and flexible in making adjustments to copyright problems in the educational sector as they arise from time to time.

My second and concluding point is that given the policy question of balance, the issue of tackling matters for creators head-on in a way that would ensure that they are compensated for the uses of their works is not addressed. I would be happy to address this matter more fully if given the time in discussion.

Creators, in some ways, are caught between owners on the one hand and users on the other. An area I've done a lot of work on is the copyright relationship between owners and creators. In terms of this bill, creators seem to be potentially undermined either by the revised fair dealing clause or by another provision, section 29.21, on non-commercial user-generated content, which in its current form also remains vague and may have unintended consequences.

Those are my introductory comments. I look forward to your questions.

[The Chair, Conservative, Gord Brown]

Thank you very much.

Professor Michael Geist is next.

[Prof. Michael Geist, Canada Research Chair, Internet and E-commerce Law, University of Ottawa, As an Individual]

Thank you, Mr. Chair.

Good afternoon, everyone.

My name is Michael Geist. I am a law professor at the University of Ottawa. As I'm sure many of you know, I have been very active on copyright policy issues for many years. In 2007 I launched the Fair Copyright for Canada Facebook group, which grew to over 92,000 members and has local chapters across the country. Earlier this year I edited From “Radical Extremism” to “Balanced Copyright:” Canadian Copyright and the Digital Agenda. This book is the largest academic study on Bill C-32 to date, with peer-reviewed contributions from 20 leading Canadian experts.

That said, I appear before this committee today in a personal capacity and I represent only my own views.

While I am sometimes characterized as a copyright critic, the reality is that I am supportive of much of Bill C-32. When the bill was first tabled, I described it as flawed but fixable, and I had strong support for many of the compromises that are found within it. That's still my position.

l'm happy to talk about any elements of the bill, but I want to focus my opening remarks on two issues: fair dealing and digital locks. As you know, I believe the fair-dealing reforms represent an attempt to strike a balance between those seeking a flexible fair-dealing provision and those who are largely opposed to new exceptions altogether. I think the Bill C-32 compromise is largely a good one.

As a result of full-page advertisements and regular op-eds, we are all aware that some groups claim these changes will harm Canadian culture. l'd like to point to two reasons for thinking that the reality is far less worrisome and offer a potential amendment to alleviate some of those ongoing concerns.

First, fair dealing in education is not new. It already encompasses research, private study, news reporting, criticism, and review. As you can well imagine, these categories cover a considerable amount of the copying on Canadian campuses. These changes are not revolutionary but evolutionary. They are reforms that will enable the use of new technologies in the classroom and support student creativity, innovation, and curiosity.

Second, and most importantly, Canadian fair-dealing analysis involves a two-stage, two-part test. Part one is whether the use or the dealing qualifies for one of the fair-dealing exceptions. If it does qualify, part two is an analysis of whether or not the use itself is fair. The extension of fair dealing to education only affects the first part of the test. While Bill C-32 will extend the categories of what qualifies as fair dealing, it does not change the need for the use itself to be fair.

The Supreme Court of Canada has identified six non-exhaustive factors to assist a court that is part of a fairness inquiry, and this past summer the Federal Court of Appeal, in a case involving educational copying, confirmed that the Bill C-32 changes will still require a fairness analysis.

While I think some of these concerns are misplaced, there is still the potential to provide greater certainty to alleviate some of the writers' and publishers' fears. I believe this can be accomplished by codifying that six-part fairness test within the Copyright Act. This reform would ensure that judges would be required to assess the fairness of any use—including education—before it was treated as fair dealing. I believe it would also put to rest claims that fair dealing would lead to a free-for-all. In fact, quite the opposite is true; by design, the reforms would ensure that fair dealing is fair for all.

With regard to digital locks, which have been among the most discussed and most criticized aspects of the bill, I should start by clarifying that much of the concern does not come from digital locks per se. Companies are free to use them if they so choose, and there is general agreement that there should be some legal protection for digital locks since it is a requirement of the WIPO Internet treaties, and that's a clear goal of this legislation.

Rather, the concern stems from Bill C-32's unbalanced position on digital locks, in which the locks trump virtually all other rights, as the committee itself heard just last week from Mr. Blais in the context of education. This distorts the copyright balance not only for the existing exceptions within the Copyright Act, but also for the new consumer rights, which can be trumped by a digital lock just at the time they are widely found in devices, DVDs, electronic books, and more.

The most obvious solution to this would be to amend the bill to clarify that it is only a violation to circumvent a digital lock if the underlying purpose is to infringe copyright. This approach, which has been adopted by some of our trading partners, such as New Zealand and Switzerland, would ensure that while the law could be used to target clear cases of commercial piracy, individual consumer and user rights would be preserved.

l'd like to quickly make five points with respect to this proposal. First, this approach is compliant with the WIPO Internet treaties, which offer considerable flexibility in their implementation. I know there are competing opinions on the issue, but there is no shortage of scholarly analysis—including a piece I did in my book—as well as country implementations that confirm this is an option open to Canada. In fact, we need look no further than Canada's own Bill C-60 to see that Canadian officials recognize that this approach is consistent with WIPO.

Second, 13 years after the treaty, claims that Canada should adopt a U.S.-style approach run contrary to the emerging international record.

With the benefit of experience, there is a clear trend towards greater flexibility. Even the United States has recently added exceptions for jailbreaking phones and unlocking DVDs for some non-commercial purposes.

Third, the approach is entirely consistent with the goals of Bill C-32. It enables us to target commercial infringers who are profiting from their actions, since their circumventions would still constitute violations of the law. Meanwhile, it would provide businesses with the legal protections for locks that some are looking for and maintain consumer fairness by assuring Canadians that their personal property rights will still be respected.

Fourth, it is worth emphasizing that amending the new consumer exceptions alone--format shifting and the like--is not enough. For example, if the lock provision on format shifting were removed, consumers would still face the barrier of the general anti-circumvention provision. In order to address the issue, both must be amended to preserve the digital copyright balance.

Finally, in the event that the committee instead wants to consider specific, new, additional exceptions to the digital lock approach, I have provided the committee clerk with a full list of potential reforms, many of which are based on the rules found in other countries.

I look forward to your questions.

[The Chair, Conservative, Gord Brown]

Thank you very much.

We'll move now to Barry Sookman.

[Barry Sookman, Partner, McCarthy Tétrault, Co-Chair of Technology Law Group, As an Individual]

I would like to thank the committee for inviting me to appear today to provide input on Bill C-32.

Before starting my remarks, I would like to give you some background. I'm not telling you these things to boast, but because I understand some have expressed concern that I have one or two clients implicated in this legislation and that their views are shaping my perspective. This is not the case. I'm a lawyer who specializes in this area. I have worked and taught in it for many years. I'm a partner with the law firm McCarthy Tétrault and the former head of its intellectual property group. I'm an adjunct professor of intellectual property at Osgoode Hall Law School. I'm the author of five books, including the leading treatise on computer and Internet law. I'm a member of numerous committees, including those in the IP area. My involvement in copyright matters for creators, users, and intermediaries spans decades of practice. I've appeared in three precedent-setting Supreme Court of Canada cases, including CCH, which modernized fair dealing in Canada, and the Tariff 22 case, which examined the liability of ISPs. I appeared for the ISPs opposite a rights holder, SOCAN.

I'm here today in my personal capacity and am not representing my clients.

In introducing this bill, the government made it clear that its purpose was to enable Canada to have copyright legislation that would benefit the Canadian marketplace. It was drafted to create framework laws and to enable Canada to be a leader in the digital economy in line with our trading partners. I support these objectives. There are, however, areas where the bill will have unintended consequences that are inconsistent with those objectives. I hope to assist members of this committee in understanding these issues, many of which are technical in nature. In the limited time I have to address the issues, I would like to focus on several examples of technical problems that need to be fixed.

The government has said that the bill will give owners stronger legal tools to go after online pirates that facilitate copyright infringement. Minister Clement said that the bill goes after the bad guys, the wealth destroyers. To address this problem, the bill has a new section on the enabling of infringement. A technical problem is that as drafted, the section is likely ineffective, because it applies only to services designed primarily to enable acts of infringement. Most file-sharing sites, including peer-to-peer, BitTorrent, and pirate-hosting sites, are not designed primarily to enable acts of infringement but to facilitate the sharing of information and files.

There are two other technical problems. The government's intention is that ISPs should be exempt from liability when they act strictly as intermediaries. On the other hand, Bill C-32 is intended to ensure that those who enable infringement will not benefit from the ISP exceptions. However, the drafting does not make this clear. Only two out of the four exceptions expressly say this. Based on the differences in wording, a court might well conclude that a pirate-hosting site gets an ISP exception even when it is liable for enablement. This could not be anybody's intent.

Lastly, the bill exempts commercial enablers, the wealth destroyers, from being liable for statutory damages even when they facilitate infringement for a commercial purpose. This can't be anybody's intention.

The bill also contains a new exception that would let individuals take existing content and use it to create user-generated content. The intent is to permit an individual to use content to make a home video or create a mashup of video clips. This is an exception that to my knowledge does not exist anywhere else in the world. From a technical drafting perspective, the exception is so widely cast that it would most likely violate Canada's WTO TRIPS obligations. TRIPS mandates that exceptions must be subject to what is known internationally as the three-step test. The exception, as drafted, would permit individuals to do almost anything that the author could do with his or her work— including creating translations, sequels, or other derivative works—and publish the result on the Internet. They could also create collective works or compilations of works, such as the best of a TV series or their favourite iPod playlist, and post those on the Internet, and they can do a lot more. The result is that the author loses significant control over the uses of his or her work, a fundamental copyright concept.

Over and above this, there could be significant economic consequences to the author. The intention is to permit uses that would have no effect on the market for the work; however, the drafting permits aggregate effects on the market for the work, which would be very damaging and substantial.

Also, the individual's use of the UGC work must be non-commercial. A website operator can charge for disseminating the UGC work, but the author gets none of the remuneration. They would, however, in other countries that don't have this exception, countries that have let the markets solve the problem.

There are other technical issues with the bill that also need addressing, but, as the chair has pointed out, I'm out of time.

I would like to thank the committee again for inviting me to appear. I look forward to answering your questions.

Thank you.

[The Chair, Conservative, Gord Brown]

Thank you very much to our witnesses.

We're now going to move to the first round of questioning. It will be a seven-minute round. The first questions will go to the Liberal Party.

Go ahead, Mr. Rodriguez.

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

Thank you very much, Mr. Chair.

Welcome everyone, and thank you very much for being here.

You are the first witnesses, so we will find a way to make this work. Given there will usually be three people, I would ask you, please, when a question is put, to answer rather quickly.

Give a quick answer, say yes or no. The perception of creators is that this bill is not at all balanced and that it will be harmful to them. Are you of that opinion?

Mr. Geist, you have the floor.

[Prof. Michael Geist]

Yes or no? I think there are provisions in there that clearly benefit creators. I think there are some provisions that benefit users, although I think there's some concern with those. I think we can address some of the concerns that creators have, particularly with respect to fair dealing, in the way that I just described.

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

Thank you.

Ms. D'Agostino, it is now your turn.

[Prof. Giuseppina D'Agostino]

I mentioned in my comments that creators are somewhat in the middle. On the one hand, if we just step back, copyright is meant to protect entitlement interests. If we care about creators and the relationship between the author and owner, that needs clarification. We would have more provisions in the act on the copyright contract aspects.

From the user perspective, I mentioned that there is the UGC and fair dealing clause that could have unintended consequences on creators.

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

Thank you.

Mr. Sookman, what is your view?

[Barry Sookman]

You ask a very good question. It's one that I could spend all of your time on. Unfortunately, I can't do that.

There are two perspectives here. One is looking at the bill in its current form and looking at the bill as it could be when the unintended consequences are removed. In its present form, some of the provisions, particularly the exceptions, are very widely cast and could have very damaging effects on creators. If, on the other hand, the bill is tightened up to achieve many of the objectives that the government has set, then I believe it would be balanced.

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

My impression is that this bill is, frankly, unbalanced and that it could be harmful to creators. A series of measures hit or penalize the creator. I am thinking of lost income due to copying for private use, exemptions, education. I also have in mind ephemeral rights, and there are many more.

Would you acknowledge that because of that, there could in many ways be lost income or rights on the part of creators?

[Prof. Michael Geist]

I'm sorry that this isn't yes or no, but I think that we have to unpack some of the various provisions a little bit. The ephemeral rights issue is one in which clearly some revenue is at stake. I'm sure you'll get both sides in to talk a bit about what's being paid for and whether or not it's appropriate for it to be paid for, but if the bill stays in its current form, then yes, there's lost revenue in that regard.

On some other elements--for example, time shifting--I think that to most Canadians the notion that someone ought to be compensated for recording a television show doesn't represent the—

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

Let's stay with you for a second, then.

Regarding the education example, don't you think that the exemption, as it is now, would cost revenues to some of the creators, writers, or producers?

[Prof. Michael Geist]

Right. As I mentioned in my opening remarks, I think that any copying that takes place, including under the new exception for education, must still be fair. It would be disingenuous to argue that there is going to be no copying that's currently compensated for that might now fall within fair dealing, but by definition any copying that does indeed qualify through the court's analysis is fair.

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

Thank you.

Ms. D'Agostino?

[Prof. Giuseppina D'Agostino]

I think that the fair-dealing provision, as it's currently configured, will have unintended consequences, largely because it will let the issues be put to the courts to clarify exactly what “education” is. If we think from a creator's perspective, do we, for instance, envisage a private school that teaches English as a second language and photocopies books for teaching English?

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

You're saying this could cause a loss of revenue for the creators.

[Prof. Giuseppina D'Agostino]

It is a possibility.

[Barry Sookman]

It's unquestionably true that this will cause loss of revenues to creators. It won't be simply the broadcast mechanical royalty, which takes an existing situation with an existing tariff and removes money that the Copyright Board has already valued.

On the educational exception, I think it's unquestionably true, because by definition some dealing is free dealing that would have been compensated for before, so there definitely will be loss of revenues there. On the UGC provision, for example, there would be loss of revenues, because that is being monetized today in the United States and in Europe, but iIt won't be in Canada, and there are other examples.

[The Chair, Conservative, Gord Brown]

One moment, members. The bells are now going. If we are going to continue for some time before the votes--it should be a half-hour bell--we are going to need unanimous consent from the committee to continue for now.

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

Is this the same vote? Is this the six o'clock vote?

[The Chair, Conservative, Gord Brown]

No, this is a vote that has now been called.

Mr. Galipeau, are you moving for unanimous consent?