Evidence of meeting #7 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.
Conservative
The Chair (Mr. Gordon Brown (Leeds—Grenville, CPC)) Conservative Gord Brown
Good afternoon, everyone.
I call to order this seventh meeting of the special legislative committee on Bill C-32.
Today we have two hours of witnesses. In the first hour we will have witnesses from the Canadian Alliance of Student Associations, Zachary Dayler and Spencer Keys; and from the Entertainment Software Association of Canada, Danielle Parr and Jason Kee.
For five minutes, from the Canadian Alliance of Student Associations, you have the floor.
Zachary Dayler National Director, Canadian Alliance of Student Associations
Thank you, Mr. Chair.
On behalf of our 26 post-secondary institutions across Canada, representing over 300,000 students, we'd like to thank you and the members of the committee for inviting CASA here today.
We come before you to bring your attention to the importance of creating education as a new category of fair dealing. The inclusion of education as fair dealing is viewed by our membership as one of the most important changes the Government of Canada can make through Bill C-32.
The importance of an education fair dealing right cannot be understated. Our neighbour universities and colleges in the Unites States are able to capitalize on their fair use education right to drive innovation, but the growing reality for Canadian post-secondary institutions is that they are being financially and legislatively left behind.
If this category is not created, students will be getting double-charged, sometimes triple-charged, for access to materials they've paid for through a variety of fees collected, whether they be through collective licensing, library, or tuition fees.
Licensing collectives, such as Access Copyright, are looking to expand their scope beyond photocopying, to include fees for digital copies of already purchased articles, quotations in PowerPoints, and even to colleagues sharing texts over mail.
Beyond that, the economic argument for a more liberal fair dealing regime is clear. Modern tech-heavy creative industries in the United States rely on fair use to find innovative ways to generate more wealth and income for their country. Studies point to the fact that this fair use economy amounts to 17% of the U.S. GPD, and education forms a significant proportion of that in direct contributions and training for future contributors.
If Canada seriously wants to be a 21st century leader in innovative sectors, the U.S. example shows liberalizing fair dealing must be a cornerstone. Simply, we must allow access for the sake of education or sit by and watch our competitors pass us by.
However, as it is currently drafted, the educational fair dealing right is not enshrined as a true right but as a secondary right that can be overwritten by a digital lock. Creating a balance in the bill is important, and digital locks have their role, but allowing them to override fair dealing undermines the very concept of fair dealing. If a work has a digital lock, a copyright holder can limit any use of it. And fair dealing means there can be no inherent limit of the purpose, if the purpose is just.
This is more restrictive than the copyright regime in the United States and goes beyond Canada's obligation under international treaties. If we are to take fair dealing seriously, it needs to be a true right and it needs to not be trumped by a digital lock.
There are also two further amendments to the bill that CASA is proposing. The first is an amendment requiring libraries to self-destruct articles they lend through interlibrary loans. Students have two options when taking on such an article: either print one copy of it on paper, or let them destruct five days after receipt.
This clause undermines the way modern study operates. The benefits to digital articles are immense. They can be carried everywhere, organized in new ways, volumes can be searched in seconds, and citations can be automated. By requiring students to physically print out these articles, the law would actively bring education research back into the 20th century, at a loss to all Canadians.
The second amendment requires professors and students to destroy their course materials 30 days after the end of the course. This is absurd. In the 21st century, students are taught to be information gatherers and synthesizers who can find the information that exists in the world and bring it together in a way that generates new and original knowledge.
Tests that were once closed-book in the 20th century are now open-book in the 21st. Requiring students to destroy the information they've built their skills on after the course is over is to force them to take an open-book test without the book, to build a house without their hammers, when they enter the workforce. It's needless and it doesn't impact the bottom line of rights holders.
Because students gained access to these lessons in an economically fair manner in the first place, if the cost of an education doesn't carry with it the ability to use that education in the workforce, I ask: what are students paying for?
Thank you, Mr. Chair.
Conservative
The Chair Conservative Gord Brown
Thank you very much.
We'll now move to the Entertainment Software Association of Canada for five minutes.
Danielle Parr Executive Director, Entertainment Software Association of Canada
Great. Thank you.
Good afternoon, and thank you for inviting me.
My name is Danielle Parr, and I'm the executive director of the Entertainment Software Association of Canada. With me today is Jason Kee, ESAC's director of policy and legal affairs.
Our association is the voice of the Canadian video and computer game industry, which employs 14,000 people in creative and cutting-edge jobs that are leading Canada's digital economy.
Video games make up the fastest-growing entertainment medium in the world, with some blockbuster titles rivalling Hollywood movies in sales and excitement. In 2009 Canada's video game industry accounted for more than $2 billion in retail sales of entertainment software and hardware, and contributed over $1.7 billion in direct economic activity to Canada's economy.
In our view, Bill C-32 proposes measures that will bring the Copyright Act in line with advances in technology and current international standards of intellectual property protection. Subject to certain technical changes we are very supportive of the bill, and we strongly urge the committee to pass it as soon as possible.
Piracy is a massive problem for the video game industry. It represents huge losses of revenues to game developers and publishers that depend on large, upfront sales to recoup the significant costs of game creation. Piracy ultimately leads to studio closures, lost jobs, or worse.
The bill will provide rights holders with the tools they urgently need to go after those who facilitate piracy, either by trafficking and circumvention devices or services, or by operating pirate websites. Further, by establishing clear rules it will provide much-needed certainty in a digital marketplace, permitting market forces to operate properly, and enabling creators and companies to choose for themselves the best way to make their own content available.
This will contribute to job creation; promote innovation; spur investment in the development of new digital products, services, distribution methods, and platforms; and support a diverse range of new and innovative business models that will, in turn, foster legitimate competition, more consumer choices, and lower prices.
Today we'd like to tell you about how copyright is central to the video game industry, and recommend specific technical changes intended to address loopholes and avoid unintended consequences. We've outlined these issues in more detail in our submission to the committee, so I'll just give you a brief overview.
When it comes to TPMs, the video game industry makes extensive use of technological protection measures in all aspects of its business in order to protect its works. We strongly support the provisions in the bill that will protect TPMs. However, we have concerns with some of the exceptions, and recommend narrowing and clarifying them.
TPMs not only help prevent piracy by allowing creators themselves to determine how their work can be used, and to be properly compensated for their work; TPMs also enable a wide variety of business models by enabling value-added features and facilitating new products, services, and distribution methods in a digital environment.
Let me break that down a little. The choice of whether or not a creator, artist, or company can use a TPM to protect a digital work is and should be the purview of creators. Consumers clearly have the right to avoid purchasing products or services that make use of TPMs if they wish, and it's incumbent on creators and companies to respond to consumer demand, or they'll suffer in the market.
Some companies, such as iTunes, have responded to demand for format shifting by offering TPM-free versions, while others have responded by providing a downloadable copy of the work with the packaged version, like many Blu-ray movies. However, there's no equivalent expectation that a video game purchased for a Nintendo Wii should be playable on a Xbox, and there's no consumer demand for format shifting.
The point is that each market is different, with its own specific rules and idiosyncrasies, and it's good public policy to support the widest possible range of markets and business models and let the consumer decide, rather than pick winners and impose a regime that may be beneficial for one sector over all others. Strong legal protection for TPMs accomplishes this by ensuring that the creator's choice to use a TPM is respected.
It's also important to understand that TPMs play an increasingly critical role in new and emerging platforms and distribution channels for content online. From new streaming radio and music services such as Spotify, to film and television services such as Hulu or Netflix, to gaming platforms such as PlayStation Network or Xbox LIVE, all of these services are supported by TPMs. They control access to the services, thus preventing piracy. They provide viable market-based revenue streams for creators, and enable value-added features, such as rental versus purchase. The video game industry also makes extensive use of TPMs to provide additional downloadable content for games to prevent cheating and to implement subscription services.
We're in the midst of a fundamental change in the way we consume content, and creators will increasingly use online platforms and other new innovative distribution models to deliver their content.
Strong anti-circumvention measures such as those contained in this bill are essential, not only to prevent piracy and allow creators to determine how their works will be exploited, but also to ensure the new platforms are secure and to maintain the integrity of the nascent digital marketplace.
However, we are concerned that certain exceptions to circumvention will be exploited by those who enable piracy by trafficking in circumvention devices and services in order to escape liability. Overly broad and vague exceptions will render the provisions virtually unusable. We recommend that those exceptions be narrowed to close this loophole.
Briefly I'd like to mention three other areas that are of concern for our industry.
With regard to enabling infringement, we applaud the new enabling infringement provision but we are concerned that as drafted it might not be effective. We recommend clarifying it to ensure services that are both designed or operated to enable infringement are captured and that rights holders can obtain the full range of legal remedies against enablers including statutory damages.
The second is the exception for user-generated content. Generally the video game industry takes a very permissive approach to UGC. However, the wording of the bill would essentially permit widespread appropriation of existing works. It essentially allows anyone to copy the designs, art assets, even programming code from a game, and release a copycat game, for free, on the Internet. This exception must be narrowed and additional factors added, such as the need for the new work to be transformative, to avoid these clearly unintended consequences.
Another issue of major concern is with regard to the statutory damage provisions. The new multi-tiered approach is clearly intended to limit damages payable by private individuals who infringe copyright for personal purposes, but it could create perverse incentives and have the unintended consequence of giving a free pass to large-scale pirates. We recommend that this unworkable distinction be eliminated and that instead the factors the courts must consider when determining the award be emphasized.
Thank you, and we look forward to your questions. Merci.
Conservative
The Chair Conservative Gord Brown
Great. Thank you very much.
We'll go to a round of questioning.
From the Liberal Party, for seven minutes, Mr. Garneau.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
Thank you very much, Mr. Chair.
I'd like to start with Mr. Dayler, or Mr. Keys if possible. You talked about a financial penalty that you feel students are paying at the moment with respect to copying materials for your educational purposes.
Can you quantify that for me? Can you tell me what you're paying under the current arrangement to be allowed to copy?
Spencer Keys Government Relations Officer, Canadian Alliance of Student Associations
Currently the access copyright tariff with post-secondary institutions has them paying both a per student and a per copy fee. The per student fee is somewhere in the order of about $3.50, which the institution pays for every student. It's a few cents a page--I can't remember the exact number off the top of my head--for every page that is copied that goes into, say, a course pack. These are the photocopied packages of materials that are sold at the bookstore.
We don't necessarily have a total number for all of Canada in terms of how much they collect on that, but it's certainly a couple of tens of millions of dollars.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
And the few cents per page, is that for the paper and the photocopying process, or is that identified for the fact that you are reproducing somebody's copyrighted material?
Government Relations Officer, Canadian Alliance of Student Associations
Reproduction.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
Do you have an idea of how much a student has to pay out of his or her pocket in a year?
Government Relations Officer, Canadian Alliance of Student Associations
It depends, but you could easily be talking about a couple of hundred dollars. It really depends on the kinds of courses they're taking. A humanities or social sciences course is probably a bit more focused on journal articles and less focused on textbooks, so they would be paying quite a bit more.
It's also worth nothing that Access Copyright is proposing for their new tariff that the amount be multiplied tenfold for colleges, to $35 per student as a blanket rate, and $45 per student for universities. That is part of the reason we think it's really important that this education provision be included.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
If the education exemption is built into fair dealing, what do you think your costs would go to?
Government Relations Officer, Canadian Alliance of Student Associations
I think it's primarily a question of prevention of this massive overreach that's being contemplated by the collective licensing groups right now. That's where we think this exemption is going to work for students. It's going to prevent that tenfold or more increase for something that is essentially a fair use, and keep that money in the pockets of students.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
So if I understand what you're saying, what you're really concerned about is going from $3.50 per year to $35 per year.
Government Relations Officer, Canadian Alliance of Student Associations
Yes. I mean, that could easily be $16 million just on a strict institutional basis, which could be hundreds of professors in this country. We think that's a meaningful amount.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
I'm interested in a per person basis. What are your feelings about those who obviously don't agree with the education exemption and say, “Under the education exemption, somebody is getting access to my work free of charge”? How do you respond to that?
Government Relations Officer, Canadian Alliance of Student Associations
I think it's quite clear that, as CCH v. Law Society has shown and to paraphrase Dr. Geist, fair dealing is not free dealing. There's a balance that has to be struck. You have to make contextual decisions. It's important to recognize that CCH was a decision about the use of a library. It was about learning materials. It used the context of learning to decide whether or not a library was overreaching in how it distributed content.
These contextual decisions are important, and we think there is protection through the court system to make sure that creators are not having their rights taken away. In fact, one of the provisions in the six-part test within CCH is “What's the effect on the marketplace?” We think that's a crucial question and we fully agree with that.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
So what's your feeling about the courts? Yes, there are criteria to establish whether something is fair or unfair. What do you think about the person who challenges the fair use of something and has to go to court, a process that we all know can be expensive and can be dragged out for a long time? Do you think that's a fair balance?
Government Relations Officer, Canadian Alliance of Student Associations
Yes, actually. Yes, it is a fair balance, particularly because in this country you're not generally talking about individuals. You're talking about licensing collectives who absolutely have the capability to challenge the courts on behalf of individuals.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
What is your definition of “education”, if it becomes an exemption?
Government Relations Officer, Canadian Alliance of Student Associations
We are not qualified to come up with a definition for the purposes of the bill. We think the courts would have the greatest latitude and the greatest capability to answer that question.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
I wasn't expecting you to be legal experts. I just wanted to get your feeling for what you think qualifies under fair dealing.
Government Relations Officer, Canadian Alliance of Student Associations
Generally speaking, we'd be saying that formal education, not a book club but something that is happening in a more formal setting, would generally be the area we're discussing when we think of education.
Liberal
Marc Garneau Liberal Westmount—Ville-Marie, QC
Thank you very much.
Ms. Parr, you mentioned that you had some concerns for user-generated materials such as mashups. Do you have some specific wording you could suggest to us, that we might consider as we go forward with this bill?
Jason Kee Director, Policy and Legal Affairs, Entertainment Software Association of Canada
Absolutely. Our principal concern is not with the provision per se. As an industry, we're very permissive with respect to UGC. It's that it's constructed so broadly that you could drive a Mack truck through it, and it would enable all sorts of misappropriation that clearly was not the intent.
I think you could narrow its application by adding a number of factors. The most notable would be one that Professor D'Agostino raised--i.e., that the essence of UGC is that the use is somehow transformative, that it's actually creating a new work. This doesn't just mean creating something new—it means creating something new and contributing. So adding a factor that requires a transformative element would be one way of doing it. Another way would be to limit the application not just on a non-commercial basis, but on the basis of standards that are currently in the act, provided that the limitations don't prejudice the rights owner. You could also do it by looking at the factors now applied in the fair dealing context—which are good, solid factors—and considering how to incorporate the those factors into the UGC, permitting the uses that encourage creativity while taking steps to avoid abuses.