Archive for July, 2012

A Shakeup in Canadian Copyright Policy?

by Daniel Gervais on Saturday, July 14th at 9:56 PM

Just after the adoption of Bill C11, the Supreme Court of Canada handed down five decisions that mark a significant shift in copyright policy, a second wave after the trilogy of ThébergeCCH and  SOCAN v CAIP. Read my take at the time here.

The five cases dealt in one form or another with collective management of copyright.

Of these five cases, three will likely be seen as less controversial. In SOCAN v Bell, a unanimous court dismissed an appeal from a decision by the Copyright Board of Canada,  that had found that listening to previews of a song in deciding whether to make a purchase was fair dealing (research).  The decision is interesting in that it proceeds formulaically, in a way that may seem familiar to US readers, along the lines drawn in CCH, in determining whether a use argued to be fair falls under one of the purposes of fair dealing and then, as a factual matter, whether this use is fair based on the CCH factors.  The Court did, however, note that US cases on fair use were not particularly helpful in a Canadian context.

In a second case, Re:Sound v. Motion Picture Theatre Association of Canada,  that involved the 1961 Rome Convention a unanimous Court agreed with the Board that sound recordings embedded in movie soundtracks were not to be treated as sound recordings. Though the international discussion in the opinion is not entirely satisfactory, given the language of section 2 of the Canadian Copyright Act, it is difficult to disagree with the outcome.

In the third case, Rogers v. SOCAN, the court decided unanimously (on the copyright aspects of the case though not on the administrative law–the standard of review–aspects) that a series of point-to-point on-demand transmissions of works is a communication to the public (i.e. covered by an exclusive right) even if each individual transmission is not, at least colloquially, public.  The Court referred to the WIPO Copyright Treaty and the making available right in that context.

The two other cases are 5-4 splits. They are controversial. They were praised as great steps in the destruction of copyright collectives.  Collectives, which are depicted as abusive monopolies, including by the majority in the 4th case, ESA v SOCAN, are also very often the main source of revenue for several categories of authors.

In ESA v SOCAN, the majority held here that music downloads did not implicate the right of communication to the public by telecommunication.  Abella J. wrote:

  • “Although a download and a stream are both “transmissions” in technical terms (they both use “data packet technology”), they are not both “communications” for purposes of the Copyright Act.  This is clear from the Board’s definition of a stream as “a transmission of data that allows the user to listen or view the content at the time of transmission and that is not meant to be reproduced” (para. 15).  Unlike a download, the experience of a stream is much more akin to a broadcast or performance.”

According to the opinion, simultaneity  in the auditory or audiovisual experience (or at least contemporaneousness) are thus required for a transmission to be a communication. The Court links the communication by telecommunication right to the right of public performance, as was done by US courts but on a very different statutory basis.

A good argument can be made that Article 8 WCT covers both streaming and downloads and–even post C11 (see below)–WCT compliance will thus be questioned. Again.

Now that the Supreme Court said that only mechanical rights need be paid on downloads, there is no doubt that users will try to eliminate the portion of their payments to songwriters and publishers that was paid to SOCAN for the right of communication to the public. Another approach, however, which users will fight to the end of course, would be to pay the same total amount as before, but all as mechanicals, that is, all to one society. La suite will demonstrate that, for ESA, the case was about $$, not principles. More on this below.

The 5-member majority of the Court seemed moved by the argument that paying two collectives was inefficient and led to too high a payment. In fact, the Board had unified tariffs and hearings so that it determined the value of music to the user and split the payment among collectives. The evil that the Court was trying to remedy here strikes me as mostly theoretical.

Many other questions will emerge about ESA v SOCAN. Let me try to identify a few. First, either the opinion applies to the past only, because it was overridden by the new section 2.4(1.1) introduced by C-11, or it is interpreted as negating the making available component in 2.4(1.1).  C11 was supposed to make Canada WCT compliant. It reads as follows:

  • “[C]ommunication of a work or other subject-matter to the public by telecommunication includes making it available to the public by telecommunication in a way that allows a member of the public to have access to it from a place and at a time individually chosen by that member of the public.”
I am not sure I would necessarily define  “having access” as implying simultaneous perception. If one does, where is the making available right?
Second, the urge to separate rights and uses is new in Canadian jurisprudence, and its rationale not entirely obvious. Frequently, more than one right in the “bundle” of copyright rights applies to a single activity. Broadcasters copy music on computers and then broadcast it. They still will have to pay for both.
In fact, most digital uses require a reproduction followed by a transmission.  Or perhaps we should indeed see 3(1)(a) – (i) as illustrations and not separate rights? What a rewriting of copyright law, and copyright contracts!
Yet another issue is the fair dealing under the communication to the public right for previews, which is no longer an obvious matter now that the communication to the public right does not apply to downloads. Is it really fair to use the communication right owned by A to increase the sales of the mechanical right owned by B?

 

And the list goes on.

Then there is the (last) case, one that some commentators see as the end of reprographic licensing. In Alberta (Education) v. Canadian Copyright Licensing, a 5-4 court held that copying by teachers in a K-12 setting for education was fair dealing for private study or research.  Some of the key parts of the majority opinion read as follows:

  • “Teachers have no ulterior motive when providing copies to students.  Nor can teachers be characterized as having the completely separate purpose of “instruction”; they are there to facilitate the students’ research and private study.  It seems to me to be axiomatic that most students lack the expertise to find or request the materials required for their own research and private study, and rely on the guidance of their teachers.  They study what they are told to study, and the teacher’s purpose in providing copies is to enable the students to have the material they need for the purpose of studying.  The teacher/copier therefore shares a symbiotic purpose with the student/user who is engaging in research or private study.  Instruction and research/private study are, in the school context, tautological. [Emphasis added]
  • “[P]hotocopies made by a teacher and provided to primary and secondary school students are an essential element in the research and private study undertaken by those students.  The fact that some copies were provided on request and others were not, did not change the significance of those copies for students engaged in research and private study.

 

  • “With respect, the word “private” in “private study” should not be understood as requiring users to view copyrighted works in splendid isolation.  Studying and learning are essentially personal endeavours, whether they are engaged in with others or in solitude.”
 On the last point, the dissent asks what study is not “private” if defined as above. A good question, and one that may need to be answered at some point.
I understand that a teacher may need to make spontaneous copies and some other classroom uses. The Guidelines agreed to in the United States after the passage of the 1976 Copyright Act allowed educators some degree of flexibility in this matter, though they do no cover digital uses.  However, the Supreme Court does seem to go at least few steps beyond what the Guidelines allow.

Here again, many questions are likely to emerge. If, as was shown in a recent US case (admittedly higher education) authors and publishers make a lot of revenue by licensing these types of uses, then what will be the impact on textbook publishing? Will this lead to higher DRM use (and then who wins?) Will governments end up having to subsidize educational publishing (more)?

 

On a more technical level, how will this interface with C11? The amended Act contains a new section 30.02, which provides a specific exception for educational institutions which seems to require a license. Not clear how that will work. Perhaps s. 30.02 should now be read out of the Act because it is all fair dealing?

Finally, there is the matter of precedents. A classic, Bishop v Stevens, seems to have been buried for good,  and  so does Boudreau v Lin (but without so saying, even though the Copyright Board relied on the case).  Then the quite recent SOCAN v CAIP now looks lame at best, a significant change of direction within a relatively short timeframe.

Even the venerable University of London Press, Ltd. v. University Tutorial Press, Ltd., [1916] 2 Ch. 601 (“ULP”) gets thrown under the bus, with a modest explanation: it is not “particularly helpful.” The case was relevant. In ULP ,”a publisher issued a publication reproducing old exams and sold it to students who were preparing for their own exams.  The publisher argued that the publication amounted to fair dealing “for the purposes of private study” by university students preparing for exams.  The ULP court held that the company could not bring itself within the fair dealing exception, rejecting the argument that the purpose of the publication was “private study.”

Whatever view one holds about underlying copyright principles, they matter mush less than rhetoric might lead one to believe. These cases were fundamentally about financial flows. They were not about what copyright material one is allowed to use because, in a collective management context, permission is granted.

I strongly believe that as much material as possible, from in-print and out-of-print books to TV shows from the 60s, 70s and 80s (and up to today’s show I just missed)  to music from every corner of the globe, should be available online, for then we all benefit. However, I do not see the huge normative appeal of suggesting that authors should necessarily work for free, or for less, because material is online.  This is key point that is rarely heard, but it is nonetheless true: collectives rarely if ever refuse a license to any user willing to pay the applicable tariff. Indeed, why would they?

Put differently, the cases were about whether users, many of them professional, should pay for certain uses of copyrighted material.  In one of the cases cases (previews) there may have been good arguments to say no, though the split imposed by the court between communication and reproduction may force a reconsideration of this.  In the case of embedded sound recordings, the statutory text supports the court’s conclusion.  But in other cases, people may disagree.  I tend to think the Board got it mostly right.

One could argue that there are issues like reporting requirements etc that separate collective management from fair dealing, but ostensibly those were not the key issue in any of the cases.

Those who cheer the cases as collective-destroying might not get what they want in the end.  Then the interface with C11 (and the WCT) looks messy at best. At bottom, whether not paying professional authors (or paying them less) is necessary and desirable is a matter on which people disagree.  I, for one, am concerned that we are fast approaching a world in which even our most successful  songwriters and authors will need to get a “real job.”

ADDED TO ORIGINAL POST:

As I read the emails I’ve received about my original post, I realize I may need to explain more why I think the Court’s two controversial cases are not all that helpful.

 

Authors want their books to be read.  Users want to read them.  In the grand copyright policy equation, only authors and users are, in fact, necessary. All commercial intermediaries, whether they be publishers, record companies or online service providers of various kinds, are contingent. [If the past is prologue, then librarians do have a separate and stronger claim to permanency than commercial intermediaries.]  No individual intermediary or business model is essential.

Yet, commercial intermediaries of all stripes dominate the policy discourse.  My hunch is that it is precisely because they are replaceable and thus use judicial and regulatory processes to protect or increase their position and market shares.

I also believe that there is, and should be, room for both authors who  “just want to be read” (e.g., authors of op-ed letter and academic writers who are otherwise remunerated) and professional writers. This is where I part ways with the dominant commentary on the cases. I believe–though I can see  that most colleagues disagree–that general welfare is maximized when our best songwriters, novelists and filmmakers can make a living from their craft, which presupposes reasonably healthy financial flows.

From an author’s perspective, a viable solution typically does not require limiting or controlling the quality or quantity of uses.   I see this model of open and unlimited access, with appropriate author compensation as the best guidepost in mapping a way forward. I also have a name for it: well-regulated collective management.

 

 
Saturday, July 14th at 9:56 PM