The decade-long debate over Canadian copyright that preceded the 2012 legislative overhaul was marked by sharply divided views among stakeholders across the spectrum. Five years later, the reform package assembled by then-ministers Tony Clement and James Moore may not have been perfect, but the Conservative government got far more right than it got wrong.
Five years is too short a time frame for a comprehensive evaluation – creators, businesses, users, and the courts are still grappling with the full impact of the changes – but Canada’s copyright law is now widely regarded as one of the most innovative in the world. The days of labelling Canada as a “piracy haven” are over; fears that consumers would never pay for content proved unfounded. Indeed, with the success of services such as Netflix and Spotify, the discussion has shifted to calls for Internet giants to pay more for content and contribute more to the cultural landscape.
Whether the online success of creative industries can be attributed to copyright law is open to question, but there is no doubt that Canada is in a far different place than it was in 2012. On the back of music streaming revenues, the Canadian music market has leaped past Australia to rank 6th in the world, while music collective SOCAN is generating record earnings. Nearly half of English-speaking households in Canada subscribe to Netflix, theatre box office revenues have hit new highs, software piracy is at an all-time low, and the CRTC has established a regulatory framework designed to encourage new entrants into the online streaming market.
On the education front, there have been claims of lost revenues for copyright collectives, the organizations the administer the rights for different copyright holders. But those critics conveniently ignore the payment shift to different intermediaries such as large commercial database providers that resell access to licensed content. Schools, therefore, still spend millions on content for their students.
Moreover, provincial governments have begun to leverage support for digital learning through the fair dealing and educational exceptions in the 2012 reforms by investing hundreds of millions of dollars in open textbooks. These textbooks provide upfront compensation to authors for their work, bring greater flexibility to teachers, and result in efficiencies for school budgets.
The innovative provisions from the 2012 reforms – the so-called “made in Canada” solutions – have also made a mark. The unique protections for noncommercial, user-generated content such as music remixes or video mashups have been discussed in Hong Kong as a potential model for ensuring that political free speech is not curtailed by copyright.
Meanwhile, the notice-and-notice system for Internet providers was touted as giving rights holders an effective mechanism to file complaints over alleged infringements, while also safeguarding user privacy. But the implementation of the system needs tweaking, given the unexpected use by antipiracy companies that send out hundreds of thousands of settlement demand notices on behalf of movie and music interests. The shortcomings can be fixed, but it is notable that the United States and Japan acknowledged during the Trans Pacific Partnership (TPP) negotiations that the Canadian system should be viewed as equivalent to the US takedown approach, thus undermining the argument that the Canadian system is too weak.
Meanwhile, guidelines and court decisions have brought more certainty to the copyright space. Fair-dealing guidelines have faced opposition from copyright collectives, but were largely upheld by the Copyright Board of Canada and the Federal Court of Appeal. Courts have taken the importance of copyright protection seriously, awarding millions of dollars in damages in some cases, demonstrating that the establishment in 2012 of the distinction between commercial and noncommercial damages was wise.
What’s next for Canadian copyright?
So, as Parliament prepares for a review of the law later this year, what’s next for Canadian copyright?
The mandatory five-year review was lauded in 2012 as a mechanism that would ensure the law remains current, in what is a fast-paced digital world. On reflection, the uncertainty associated with the prospect of never-ending reforms may ultimately do more harm than good, as would-be investors may question whether Canada is committed to its current path of striking a balance between creators’ and users’ rights.
The 2017 review should be used as a benchmarking exercise, enabling the many stakeholders to give their perspectives on what is working well and what needs to be reviewed. There is certainly an opening for modest reforms that build on the changes in 2015 (extending the term of copyright for sound recordings) and 2016 (ratification of the Marrakesh copyright treaty for the blind and visually impaired). But a radical overhaul would do more harm than good, as the full implications of the 2012 reforms and recent court rulings are still being sorted out.
The low-hanging fruit offers potential action for the three government departments vying for copyright policy influence: Innovation, Science and Economic Development (ISED), Canadian Heritage, and — as the impact of trade agreements on domestic policy has grown — International Trade. I will examine these in turn.
Innovation, Science and Economic Development
Navdeep Bains, the ISED minister, has devoted enormous energy to an innovation strategy, and the department’s copyright reform efforts should connect the policies by identifying areas where Canadian law may impede innovation. Fixing the broken parts of the notice-and-notice system is an obvious first step, as the law has been misused to send millions of e-mail notices demanding payment of hundreds of dollars for unproven allegations of infringement at great cost to consumers and Internet providers.
Similarly, the department should focus on fixing the fair dealing gap created by unnecessarily restrictive digital lock rules, which create a gross mismatch between user rights in the analog and digital worlds. For example, students and teachers can exercise their user rights by legally photocopying a reasonable portion of a physical book, but they can effectively lose those rights if the work is an e-book containing digital-rights management restrictions that eliminate the ability to copy and paste portions of the text.
Facilitating innovation through copyright will also draw attention to, and could come from, linking reform to the government’s commitment to boosting artificial intelligence (AI). The federal government placed a big bet in this year’s budget on Canada becoming a world leader in AI, investing millions of dollars on a national strategy to support research and commercialization.
Yet Canada’s restrictive copyright rules may hamper the ability of companies and researchers to test and ultimately bring new AI services to market. Making machines smart —whether it is automated translation, big data analytics, or new search capabilities — depends on the data that is being fed into the system. Machines learn by scanning, reading, listening or viewing human-created works. The better the inputs, the better the output and the less likely that results are biased or inaccurate.
Copyright law crops up because restrictive rules may limit the datasets that can be used for machine-learning purposes, resulting in fewer pictures to scan, videos to watch or text to analyze. Given the absence of a clear rule permitting machine learning in Canadian copyright law (often called a text-and-data-mining exception), our legal framework will continue to trail behind those of other countries that have reduced the risks associated with using datasets in AI activities.
There are two ways to overcome the copyright AI barrier. First, Canada could emulate the US’s fair-use model by making the current list of fair-dealing purposes illustrative rather than exhaustive. The US exception is open to any purpose, as striking a fair balance depends upon the use of the work, not the purpose of the copying. Since machine learning does not harm the primary purposes of the original work, most text- and data-mining will qualify as fair use.
Second, Canada could try to address the issue by creating a specific exception for text and data mining or computer informational analysis, as other countries have have done. For example, Britain’s exception allows copies of works to be made without permission of the copyright owner for the purposes of automated analytical techniques to analyze text and data for patterns, trends, and other information. The law does not allow contracts to restrict data mining activities, but the exception is limited to noncommercial research.
Canadian Heritage Minister Mélanie Joly has for many months been examining Canada’s cultural policy in the digital world. There will be pressure to bring copyright reform into the mix, though Joly’s emphasis on the opportunity for global success of Canadian content shows that that copyright already facilitates world-class creativity.
Given the department’s focus on ensuring creators are properly compensated, its primary attention should be on reform to the Copyright Board of Canada, which plays a crucial role in setting the royalty rates that ensure fair compensation for creators. There is no shortage of criticism of the board. Indeed, in a field that is often sharply divided, disenchantment with the board is sometimes the one thing people seem able to agree upon.
The board was slow to acknowledge and implement the copyright decisions delivered by the Supreme Court of Canada, particularly those involving fair dealing. That has changed in recent months, however, and its decisions are now more reflective of the Court’s jurisprudence. The board’s rulings are and will continue to be challenged, but there is an established system to address appeals. Reform on the substance of decisions is not needed.
Administrative concerns are a different story. How the board reaches decisions, the costs involved, the timeliness of those decisions and the ease of participation is very much a matter for review. There is unquestionably a need to develop reasonable timelines for conducting hearings and issuing decisions. Further, the board needs to actively work on opening its proceedings and activities to the broader public. The exclusion of the public stands in sharp contrast to the other boards, tribunals, and agencies that address issues with individual parties but whose decisions have ramifications for a far broader group of stakeholders.
It is easy to overlook the role of trade in domestic copyright law, but with the renegotiation of NAFTA and the possible renewal of the TPP talks, substantive copyright policy may be determined as much in Washington and Tokyo as in Ottawa. For Minister of Foreign Affairs Chrystia Freeland and Minister of International Trade François-Philippe Champagne, that means ensuring that Canadian copyright interests do not get lost amid the myriad of issues up for discussion.
The TPP includes a requirement to extend the term of copyright in Canada from the current life of the author plus 50 years to life plus 70 years. Term extension has long been opposed by Canadian officials, who point to the fact that life plus 50 years meets the international treaty standard found in the Berne Convention. They also point to evidence that an extension does little to incentivize new creativity, but leaves Canadians with two decades of no new works entering the public domain. In other words, in a policy world in which copyright strives to balance creativity and access, term extension restricts access but does not enhance creativity.
Trade talks may also yield pressure to increase the criminalization of copyright with extended penalties around Canada’s digital lock rules. In 2012, Canada implemented some of the world’s most restrictive measures, under enormous pressure from the US. Yet, despite the 2012 reforms, the new trade talks might lead to demands that Canada make further changes to the digital lock provisions. Including further restrictions in a trade agreement would limit the ability to adjust the rules, resulting in loss of the flexibility found in international treaties that have been adopted by some of Canada’s trading partners.
Canada has long viewed criminal provisions in copyright as the exception rather than the rule. As the department embarks on new trade negotiations that could trump domestic reforms, staying committed to those principles, and the necessity of policies tailored to the needs of Canadians, is essential.
Copyright reform has long been the source of divisive debate, reflecting the myriad stakeholder perspectives that often view policy-making as a zero-sum exercise. The 2012 reform process was lengthy, but the detailed studies and meaningful opportunities for public participation resulted in a legislative package that has fared well over the past five years. The upcoming review should serve as a benchmarking exercise by taking stock of what is working and where there is room for improvement. That includes modest reforms that could help creators get paid by addressing ongoing frustrations with the Copyright Board, assuaging consumer concerns by removing the threat of inappropriate payment demands stemming from the notice-and-notice system, supporting the government’s innovation agenda by implementing a fair use provision, and retaining flexibility for made-in-Canada copyright solutions at the trade negotiation table.
This article is part of the Reviewing Canadian Copyright Policy special feature.
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