Industry Committee on Nov. 28th, 2018

[Howard Knopf]

The commissioner of competition has for a very long time had the ability to weigh in on these issues at the Copyright Board. They've never even opened a file or lifted a finger to do that. They should be encouraged, if not told, by somebody to do that. They're independent, so it's not easy to tell them what to do. Another thing might be that the Copyright Board should, either of its own motion or, if necessary, through regulations that somebody should put in place, be forced to have more transparency. They should force, for example, disclosure—sunshine laws—about the salaries of senior people at collectives, about how much they spend on legal fees, and the average and median return to members of collectives on an annual basis.

The board doesn't want to get anywhere near that. I've urged them to. It seems to me that should be their first order of business, because collectives are there for the public interest.

[The Chair, Liberal, Dan Ruimy]

Thank you.

[Lloyd Longfield, Liberal, Guelph, ON]

For your multiple witnessing at different committees, thank you for all your service to our government.

[The Chair, Liberal, Dan Ruimy]

Before we move onto Mr. Albas, Mr. de Beer, you had referenced a document. Could you send it to the clerk, please?

[Prof. Jeremy de Beer]

Yes.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Albas, you have seven minutes.

[Dan Albas, Central Okanagan—Similkameen—Nicola, CPC]

Thank you, Mr. Chair.

Thank you to all our witnesses for your testimony here today and multiple testimonies at different committees.

I'll start with Mr. Hayes.

You gave in your opening comments the example of SOCAN, where someone is putting on a feature that they calculate to be $1,000 in royalties, SOCAN takes a different position and, therefore, it could be $4,500 if it's three times what it was.

First of all, if collectives are only able to seek actual damages, won't people just automatically refuse to pay tariff as the worst punishment they would face in the first place?

[Mark Hayes]

No. As I said, there is a value in the punitive aspect of it if there's no legitimate dispute. That's why the wording that I suggested in my written brief was that if there is a legitimate dispute, it wouldn't apply. That would be again for the courts to decide as to whether it was a legitimate dispute.

Very often the way this is used is when someone just does not pay, if you have a bar or a restaurant that just doesn't pay. They either don't know or they just refuse to do it and they're hoping they don't get caught. That's not the situation I've been involved in, where you have legitimate disputes as to applicability or calculation. You shouldn't have this punitive provision being used as a cudgel by one side to try to force the other side to settle.

[Dan Albas]

In those types of cases, then, would it not be smarter to make a secondary regime? For example, rather than count the whole $1,500 as being where you take that, times three or times 10, depending. You say it's the difference between the amount that the proprietor had suggested and the value that SOCAN in this case would have said is the right amount, that $500. To me, you would see probably focusing a little more on actual—

[Mark Hayes]

That's one alternative. The problem is that there is no other regime where you, on the one hand, take a position and the other side essentially is saying, “Okay, I have three to 10 times the amount of power than you have in this dispute”.

[Dan Albas]

There is a market power, or at least in this case, a monopoly power—

[Mark Hayes]

Another alternative would be that you wouldn't have to pay the punitive sum if you put up security for the amount that it is said to be. There are various ways to do it.

However, in terms of just having this penalty, remember, it's a minimum of three times. The judge can't go below three times. The minimum is three times, up to 10 times. Just to have that there is a cudgel for one side, and in my submission, is just unfair.

[Dan Albas]

Mr. de Beer, you've been to a number of different committees, as some of the other witnesses have as well. By the way, all of that now is Crown copyright, so I hope you're okay with that. We own your ideas as a parliament. I'm just advising you of this.

[Prof. Jeremy de Beer]

Yes.

[Dan Albas]

As a side note, though, can you describe how fair use as it exists in the United States is superior to the fair dealing provision exceptions we have in Canada? I found your argument saying, if you're going to take the worst of a regime, you'd also better complement with some of the release valves or at least some of the best.

Can you explain that in more detail?

[Prof. Jeremy de Beer]

The reason it's preferable is essentially for the reasons Mr. Hayes gave around the text and data mining exception, because you don't have to constantly update the list of things that need flexibility or that you need breathing room or safety valves for. Rather than saying “Fair dealing for the purposes of” one, two, three, four, five or six things, which if we look at the pattern of reform have become increasingly specific and technical, you say “Fair dealing for purposes such as” some of the things we have is not an infringement of copyright.

The thing about innovation is that it is by definition disruptive and unpredictable. We want innovation, but you don't know what is going to happen. That's the point of innovation. You can't create a list of specific exceptions to enable things that you haven't thought of yet. The U.S. approach solves that with one swipe.

The argument you hear against that position is that it's too unpredictable, that it's too disruptive to settle Canadian practice. I don't believe that at all. In fact, we can have the best of both worlds by simply doing what Mr. Knopf suggests, called the “such as” solution. Just put in those two words, “such as”. It would give us the breathing room that the Americans have to drive innovation and not stifle it.

[Dan Albas]

In the last meeting of this committee, I asked about an exemption for reaction videos, for example, that allows for people, as you said, to just put up something with their reaction to it. Do you think there needs to be some carve-out for that type of activity?

[Prof. Jeremy de Beer]

I don't think there needs to be any more specific carve-outs for particular activities. I think what we need is a much more flexible and technology-neutral approach, as fair use is. Look at the provisions. Every time we've tried to put in these technical little micro-exceptions, it backfires. I can give you 20 years of Supreme Court cases to prove it.

[Dan Albas]

You stated before the heritage committee that educational authors earned virtually nothing from their works and that publishers get all the rights and, obviously, profits when they sell the work to academic institutions.

How can the Copyright Act address this?

[Prof. Jeremy de Beer]

I think that it's not necessarily a copyright problem. It's a contracts problem. What I like to see are measures the government takes requiring open access to research, for example, by research funding agencies.

I think there are certain measures that you could take to reinforce the bargaining position of authors vis-à-vis publishers and other intermediaries, but it's not easily done. It's a complex issue. The core point is that it's not a copyright problem. That's the point I was trying to make.

[Dan Albas]

Mr. Hayes.

[Mark Hayes]

I've been on both sides of this. I've written, and I've negotiated these deals and so on. The fact is that in academic writing, the publishers have a huge advantage because the academics need to publish. You have a very willing seller and a not-very-willing buyer. They'll buy it or not buy it, and they're going to take most of the money for it.

It's a market issue, and if you get into it in the copyright reform, to try to fix the market, you go down that rabbit hole very fast and get into a lot of trouble.

[Dan Albas]

It's about competitiveness, as Mr. Boyer said.

[Mark Hayes]

Yes, exactly.

[Howard Knopf]

There are potential big antitrust issues with some of the gigantic, multinational, billion-dollar publishers that impose these conditions, but I suggested a solution yesterday that got some good feedback on the Internet, for what that's worth.

The solution came not from me but from Roy MacSkimming, who's a long-time expert who did this work for the Public Lending Right Commission in Canada. He suggested what he called an educational lending right, which would require government funding but would compensate scholarly authors, like Professor de Beer and Professor Boyer, for the use of their work in educational institutions, much like we already have for public libraries where popular authors like Margaret Atwood get up to $3,000 per year for their books being lent. That amount has gone down. It should go up. It needs new funding.

Something like that for the educational realm would provide additional income and incentive for professors, and I also pointed out that professors are rewarded in other ways. If they write papers and books, they get promoted and they get tenure. Finally they're getting decent salaries now—six-figure salaries in Canadian universities—so it's not as if they're not being paid. It's just that they're not being paid as efficiently and elegantly as perhaps they should be.