Canadian copyright is headed in the wrong direction

Michael Geist, Thursday April 09, 2009

As the Canadian government considers its next move on copyright reform, it would appear that the Canadian Recording Industry Association is readying a grassroots campaign to argue for a repeat of Bill C-61.  The following leaked email was widely distributed from an executive at one of the major record labels:

I’m sure that all of you are aware of the current challenges that we have within our industry around copyright infringement. What you may not know is that there is a lack of support within our government for laws that are currently in place NOT protecting copyright work. Virtually every other developed nation in the world has taken one key step to keep peer to peer downloading under control: they have modernized their copyright rules for the digital age. It is time Canada’s Parliament implement similar, long overdue reforms, in keeping with our country’s commitments under the 1996 WIPO Internet Treaties.

You can make a difference by understanding the current challenging situation, talking to your colleagues about it, and letting your MP know how you feel about this. Below and attached is a Frequently Asked Question form that can bring you up to speed on the issues and other info that you may not be aware of. Take a minute to review, and then please follow up by sending an email to your MP if you feel that music and these matters are important to you. In addition to the email message, or as an alternative, please write a letter or call your MP and the Heritage and Industry Ministers.

The letter then lists the addresses for Industry Minister Tony Clement and Canadian Heritage Minister James Moore along with links to a series of supportive organizations and a non-functioning link to a Copyright FAQ that is currently hosted at Universal Music (but indicating that the source is CRIA).

While the industry may face some challenges in generating a major grassroots campaign demanding a Canadian DMCA, more important is their planned Copyright FAQ which unsurprisingly tells only one side of the story.  There are no questions about the robust copyright collective system in Canada, private copying, the Songwriters proposal, the CMCC, the effectiveness of notice-and-notice to address online infringement, etc.  Instead, the FAQ states [with commentary in brackets from me]:

Copyright Reform FAQ

Q: What is Copyright?
A: Copyright is the right held by the creator of a literary work, musical work, artistic work or software to decide how that work should be reproduced and made available to the public. It is the foundation upon which the copyright industries – and the jobs they support – is built.

[according to the Supreme Court of Canada, it is also a law that seeks to strike a balance between creators rights and users rights.  The effects of copyright extend well beyond just the “copyright industries.”]

Q: Why is copyright important?
A: Copyright is important because it provides the creator of a work with the same basic rights as an owner of physical property, including the right to determine the selling price and the right to protection from theft. By protecting a creator’s rights, copyright also promotes innovation and progress in science and the arts.

[the balance is also important to ensure appropriate access, new creativity, and enough flexibility within the law to ensure new innovative business models]

Q: What is piracy?
A: Piracy is the unauthorized distribution or acquisition of a copyrighted work, such as commonly takes place through online peer-to-peer (P2P) file sharing and CD counterfeiting. Piracy is akin to shoplifting – both involve taking property without authorization.

[There is considerable literature highlighting the differences between copyright infringement and physical theft.  Further, Canadian law includes a private copying levy that raises doubts about whether there is any infringement taking place for personal, non-commercial downloading.]

Q: Who does piracy affect?
A: Piracy affects everyone including YOU – regardless of whether you work in a copyright-related industry. Piracy undercuts sales, profits and tax revenues. Investment in new creations is deterred, undermining innovation and artistic development. All too often, businesses are forced to close and jobs are lost.

[There has been little evidence in Canada about reduced investment due to the current copyright law.  Indeed, it is arguably the lack of flexibility within the Copyright Act that has deterred new investment in new businesses, who have been unable to rely on a robust fair dealing provision.  Moreover, with the industry abandoning DRM, the claim that anti-circumvention legislation is crucial to new investment is just not credible.]

Q:  Does copyright piracy put your job at risk?
A: Yes. Canadians who work in the copyright-related industries have seen numerous job losses – from the artists who create music to truck drivers who deliver CDs and DVDs to retailers. Since the advent of widespread P2P file sharing 10 years ago, retail sales of music have declined by more than half; this has forced ongoing job reductions and slashed funds available for Canadian artist development.

It is not only the music industry that is affected. For example, a Business Software Alliance study found that a reduction of software piracy in Canada by 10% over the next four years could generate more than 5,200 high-skilled jobs and inject $2.7 billion into the economy.

[Loss of jobs for truck drivers who deliver CDs and DVDs is about a move to digital distribution, not infringement.  Further, there is plenty of debate over the sources of declining CD sales, including an Industry Canada funded study that found a positive correlation between file sharing and music purchasing.]

Q:  Aside from jobs, how does piracy affect music in Canada?
A: With much less money available today to invest in and support new artists, Canada’s leading place in the music world is slipping. As John Kennedy, the Chairman and CEO of the International Federation of the Phonographic Industry (IFPI) pointed out recently, “Canada is now punching below its weight” on the world music stage. As reported in Billboard, Kennedy “noted that according to Nielsen Soundscan, only two of the Top 20 selling albums in Canada – Nickelback and Quebec’s Lost Fingers – were created by domestic acts.”

In addition, Canada has seen no significant new digital services introduced over the past year, in contrast with the flurry of innovations seen in other countries. This undercuts the development of digital music here – badly needed at a time of declining CD sales. Without a modern, robust copyright regime, companies are unwilling to invest in innovative new digital services in this country.

[Digital music sales have grown faster in Canada than in the United States for each of the past three years.  Some services like the now-defunct SpiralFrog used Canada as the host for their pilot before launching in the U.S.  There is simply no evidence that the absence of anti-circumvention legislation is viewed as a major deterrent to launching new Canadian services.  With regard to investment in new artists, programs such as FACTOR play a key role in funding artists, not U.S. backed labels.]

Q: Does piracy affect Canada more than other countries?
A: Yes. A 2005 study by the Organization for Economic Co-operation and Development (OECD) found that Canada’s per capita rate of peer-to-peer downloading was the highest among OECD countries. This directly reflects Canada’s failure to modernize its copyright rules for the Internet age, unlike other developed nations. Many countries in Europe, Asia and elsewhere implemented this basic step several years ago.

[While the OECD study showed Canada as slightly higher per capita use than the U.S., it made no conclusions about infringing activity, particularly given the legitimate uses of P2P and the existence of the private copying levy in Canada.  Moreover, the copyright reform advocated by CRIA focuses on protecting digital locks, not addressing P2P activity.]

Q: What was Bill C-61?
A: Bill C-61 was copyright reform legislation introduced in Parliament last year. It set out to modernize Canada’s Copyright Act to accommodate today’s digital technologies, and to address the widespread piracy of copyrighted works. The bill, which died on the Order Paper when an election was called, would have brought Canada’s copyright rules closer in line with those of other developed nations. Its passage would have signaled to Canadians that Internet piracy is unacceptable under law.

[Bill C-61 also would have created enormous problems for consumers, educators, librarians, researchers, artists, and millions of Canadians who would suffer a loss of rights over their personal property and restrictions on their ability to create and interact with digital media.]

Q: Is copyright reform costly to implement?
A: No. In fact, copyright reform can be implemented at no cost to taxpayers – in sharp contrast with recent government measures to stimulate the economy.

[While there may be limited cost to government, the cost to consumers and innovative businesses facing new restrictions would have been very significant.]

Q: What about the concerns raised by bloggers?
A: Some bloggers and academics argue against copyright reforms, citing such concerns as lawsuits and privacy considerations. But these arguments are without merit. For example, on lawsuits, the major labels in Canada have stated clearly that there is no intention to sue fans. It is simply not an issue. On privacy, Canadian law already offers strong protections, and there is nothing in copyright reform that would affect that.

[“Bloggers and academics” do not argue against copyright reforms, but rather against DMCA-style, unbalanced reforms.  There is support for a fair, balanced approach that does not eliminate fair dealing in the digital environment and that addresses ongoing consumer concerns with the current law.  Fears about lawsuits and privacy are only a small part of the concerns, which extend to education, consumer rights, research, free speech, and creativity.  Moreover, concerns over privacy are not limited to bloggers and academics, but also include privacy commissioners.]

Q: Do artists support copyright reforms?
A: Yes. ACTRA and AFM Canada, leading organizations that represent tens of thousands of Canadian artists, fully support copyright reform. Their support is based on the best interests of their members. To see what some artists have to say, click here.

[But many artists do not.  The Canadian Music Creators Coalition, which includes some of Canada’s best known musicians, argue against these reforms.  Moreover, the Songwriters Association of Canada has argued for a different approach on P2P and acknowledged that reforms based on protecting DRM are bound to fail.]

Q: Why has the Canadian government been so slow to reform copyright rules?
A: Given the explosion of piracy in Canada, the lost jobs, the success of copyright reforms passed by many other countries years ago, and our government’s longstanding but unfulfilled international treaty commitments, the delays defy explanation or excuse. As IFPI’s John Kennedy recently said at Canadian Music Week (as reported by Billboard): “The lack of interest in intellectual property by the Canadian government is truly astonishing.”

What is clear is that the Canadian government needs to hear from voters like you that further delays are unacceptable. Your local MP needs to know that your patience is running out, and that legal reforms are needed now to stem job losses and provide new opportunities for Canada’s music industry.

[The long Canadian process reflects many things, some political (string of minority governments) and some substantive.  It is the substantive doubts about DMCA style reforms that are most relevant, since they reflect the view – shared by the creator of the DMCA – that the policies have been a failure.  What is unacceptable are not the delays, but rather caving to pressure to enact reforms that would cause harm to millions of Canadians while doing virtually nothing to support Canadian artists.]

Q:   What can I do to help?
A: Contact your Member of Parliament to let them know that you think copyright is important and to ask that they prioritize the passage of appropriate copyright reform legislation. It will take you no more than a minute or two to send an email to your MP, and just a few more minutes to write a letter. Ask family, friends and colleagues to do the same.

[We agree on this.  My 30 Things You Can Do remains relevant (albeit a bit outdated for contact information) – Canadians should contact their MPs and urge them to ensure that any new reforms strike the right balance.]