LibertyVoice

Nielsen Soundscan has just released the Canadian music sales figures for 2009.  Notwithstanding the regular claims that the Canadian digital music market cannot develop without copyright reform, the Canadian market grew faster than the U.S. market for the fourth consecutive year.  As the chart below demonstrates, digital music sales have grown faster in Canada than in the U.S. in every year since 2006:

While this does not suggest that the market is thriving – a down economy with more competition for the entertainment dollar it is a tough market – it does confirm yet again that attempts to link copyright reform to the development of a Canadian digital market are not borne out by the facts.  Indeed, Canada has consistently grown faster than the United States (from an admittedly lower starting point given that digital music stores arrived later in Canada). 

Moreover, as I pointed out last summer, the IFPI's global data further supports the conclusion that the Canadian digital music market is not the laggard that some would have the public believe.  As of last year, Canada's digital market stood 7th worldwide, while ranking 6th for all recorded music – in other words, about what you would expect.  Of the top 20 global markets for recorded music, the IFPI said that Canada ranked 5th for the percentage of digital sales. 

Indeed, digital music sales as a percentage of total sales in Canada is ahead of every major European country. The U.S. may lead Canada (though growing at a far slower rate), but the IFPI reported that Canada is ahead of France, Britain, Spain, Belgium, Italy, Germany, Switzerland, the Netherlands, Austria, Sweden, Czech Republic, Finland, Greece, Hungary, Norway, Poland, Portugal, and Russia.  Canada also leads countries such as Australia, New Zealand, Hong Kong, Singapore, Taiwan, Mexico, Argentina, Brazil, and South Africa.  The global music market may be facing difficult times, but the industry's own data confirms that placing the blame on Canadian copyright laws is quite clearly misplaced.

Liberal leader Michael Ignatieff is on a campus tour this week and sources report that he is being asked about Canadian copyright policy at every stop.  He responds that Canadian copyright policy must not be dictated by Washington.  He says that Canada needs its own policies and is encouraging students to help work on the issue.  While much more detail is needed – where does the party stand on ACTA, CETA, fair dealing, anti-circumvention rules, C-60/C-61, etc. – this is a promising start.

A new editorial from Nature criticizes Canadian science policy:

Some critics say Canada has no science policy at all. Others say it has unwritten laws that seem to let it muddle along. But muddling along isn't good enough in today's tough economic climate. Canada needs a bigger vision of where its science is going: a vision informed by organized scientists, and voiced by a strong position in government.

(via Researcher Forum)

Today Public Knowledge is sponsoring World's Fair Use Day, described as a day to celebrate the doctrine of fair use and the benefits it brings to creators, innovators, and consumers.  As many readers will know, Canada does not have a fair use provision but rather one called fair dealing.  Given the focus on fair use, it is worth considering both the breadth of fair dealing in Canada as well as its limits.  For those supportive of fair dealing, the good news is that the Supreme Court of Canada has ruled that it is a user right.  In CCH Canadian v. Law Society of Upper Canada, a unanimous court ruled:

Before reviewing the scope of the fair dealing exception under the Copyright Act, it is important to clarify some general considerations about exceptions to copyright infringement.  Procedurally, a defendant is required to prove that his or her dealing with a work has been fair; however, the fair dealing exception is perhaps more properly understood as an integral part of the Copyright Act than simply a defence. Any act falling within the fair dealing exception will not be an infringement of copyright.  The fair dealing exception, like other exceptions in the Copyright Act, is a user’s right.  In order to maintain the proper balance between the rights of a copyright owner and users’ interests, it must not be interpreted restrictively. 

Treating fair dealing as a user right was a crucially important milestone that breathed new relevance into the provision.  However, fair dealing only applies to a limited list of categories, namely research, private study, news reporting, criticism, and review.  While this list can be interpreted broadly (ie. the Copyright Board treated song samples as consumer research), there are still many common activities that are not strictly permitted under Canadian copyright law:

• For creators, this means no protection for parody or satire.
• For educators, this means no protection for teaching.
• For innovators, it means no protection for many innovative business models and new technologies.
• For archivers, it means limited protection for digitization.
• For consumers, it means no protection for recording television shows, backing up a DVD, format shifting from a DVD to video player, or transferring music from a CD to an iPod.

These limits should not be underestimated as they unquestionably have a stagnating effect on innovation, a chilling impact on creators, and create uncertainty for consumers, students, and businesses.  So as we celebrate the breadth of fair use (dealing), let's not forget that reform is needed to ensure that the benefits of a balanced fair dealing provision accrue to all.

More than 20 years ago, Canada negotiated a free trade agreement with the United States that attracted enormous public attention.  The first FTA – to be followed a few years later by the North American Free Trade Agreement that brought Mexico into the mix – played a pivotal role in a national election and ultimately resulted in dramatic changes to the economy and Canadian law.

My weekly technology law column (Toronto Star version, homepage version) notes that earlier this year, Canada and the European Union announced plans to negotiate a Comprehensive Economic and Trade Agreement (CETA), possibly the biggest Canadian trade negotiations since NAFTA.  The first round of talks took place in Ottawa in October, yet the treaty has generated practically no public scrutiny. That may change following the leak last week of the European Union's proposed intellectual property chapter.

Simply put, the EU demands target the entire Canadian economy.  They include increased patent protection for pharmaceutical companies, heightened support for famous trademarks, and new rules for industrial designs.  The EU is also keen on restrictions on the use of geographic indications, which would limit the ability of Canadian wine and cheese makers to use such words as champagne or parmesan.

The EU has emphasized its desire that Canada comply with a series of treaties that have not been signed or ratified.  Demands focus on Canadian accession to the Hague System for the International Registration of Industrial Designs, implementation of the World Intellectual Property Organization Internet treaties, and compliance with both the Trademark Law Treaty and the Patent Law Treaty.

The EU draft indicates the treaty would also dramatically reshape Canadian copyright law.  Indeed, when combined with the Anti-Counterfeiting Trade Agreement (the other ongoing secret negotiation), the two agreements would render Canadian copyright law virtually unrecognizable.  The notion of a "made-in-Canada" approach promoted by Industry Minister Tony Clement – already under threat from ACTA – would be lost entirely, replaced by a made-in-Washington-and-Brussels law.

The leaked document includes the following demands:

Copyright term extension.  The current term of copyright protection in Canada is life of the author plus 50 years.  This is consistent with the term requirements under the international law.  The EU is demanding that Canada add an additional 20 years by making the term life plus 70 years.

Digital lock provisions. The EU is demanding that Canada implement digital lock provisions that include a ban on the distribution of circumvention devices. There is no such requirement in the WIPO Internet treaties.

Enforcement provisions.  The EU is demanding that Canada establish a host of new enforcement provisions including measures to preserve evidence, ordering alleged infringers to disclose information on a wide range of issues, mandating disclosure of banking information in commercial infringement cases, as well as allowing for injunctive relief and destruction of goods.  There is also a full section on new border measures requirements.

Resale rights.  The EU is demanding that Canada implement a new resale right that would provide artists with a royalty based on any resales of their works subsequent to the first sale.  This new right would mean that paintings, sculptures, and other works would carry an additional royalty fee for any sales after the creator has sold their work.

While the leaked document may only represent the starting European position, there is little doubt there will be enormous pressure on Canadian negotiators to cave on the IP provision in return for gains in other areas.  CETA may not have attracted much attention to date, but its long-term implications could ultimately exceed the first Canada/U.S. FTA.

The World Intellectual Property Organization is meeting this week with considerable momentum toward work on a Treaty for the Blind that would establish important copyright limitations and exceptions to ensure broader access for the sight disabled.  While the U.S. had emerged as a leader with a surprising shift in approach, attendees report that Canada has been missing in action and maintaining a very low profile.  It's incredibly discouraging to see Canada – which fashions itself as a leading voice that can bridge the gap between delegations – doing so little on such an important issue. 

There are multiple reports this morning that Amazon is finally selling the Kindle in Canada.  The device comes with wireless downloads, which suggests that a deal has been struck with a Canadian carrier.  But which one?

Rebecca Tushnet liveblogs a "debate" on Canadian IP policy in Washington, DC between recording industry lawyers on both sides of the border. Canada is described as facing a "very dark situation."

IP Osgoode alerts us to an interesting decision from the Court of Appeal for British Columbia that has important implications for online speech in Canada.  In an opinion issued earlier this month, the Canadian court held that Jon Newton of p2pnet news could not be held liable for linking to allegedly defamatory articles written by others about politician Wayne Crookes. The appellate ruling upheld a lower court decision last fall dismissing Crookes’ case against Newton.

In much the way CMLP often does, in 2006 Newton published a blog post about a defamation lawsuit brought by Crookes against Michael Pilling, who runs OpenPolitics.ca.  In his post about the lawsuit, Newton linked to the allegedly defamatory articles in question on OpenPolitics.ca, as well as to an article posted on another website.  Newton did not reproduce or comment on any of the allegedly defamatory material.  Here’s the important passage:

Under new developments, thanks to the lawsuit, I’ve just met Michael Pilling, who runs OpenPolitics.ca.  Based in Toronto, he, too, is being sued for defamation.  This time by politician Wayne Crookes.

¶ 88.  My underlines represent Newton’s original hyperlinks to the allegedly defamatory articles. 

The Canadian decision focuses on whether providing a link to defamatory material can constitute "publication" of that material, one of the essential elements of a defamation claim.  All three Justices agreed, "the mere fact [Mr. Newton] hyperlinked the impugned sites does not make him a publisher of the material found at the hyperlinked sites."  ¶ 78. But, they also agreed that a hyperlink could constitute "publication" of third-party content under some circumstances, if the facts "demonstrate that a particular hyperlink is an invitation or encouragement to view the impugned site, or adoption of all or a portion of its contents." ¶ 84.  The court gave as an example the statement "N is described at [hyper link]," suggesting that this might "incorporate a libel so as to be defamatory." ¶ 84.

Justices Bauman and Saunders found that, under the circumstances, Newton had not published the offending articles by linking to them. They noted that Newton
made no explicit invitation to follow the links, no endorsement or
adoption of the other sites’ content, and the discussion of litigation
in his post "at a minimum alert[ed] the reader to the potential for
untrue content or disputed commentary." ¶ 89.  Dissenting, Justice Prowse found that Newton had invited or encouraged his readers to follow the links.  Her logic is a little mysterious, but Justice Prowse seemed to suggest that this encouragement or invitation flowed from the fact that the article dealt with free speech and referenced a defamation lawsuit (so compelling I guess readers just couldn’t resist). ¶¶ 70-71. 

The majority and dissent also disagreed about whether the court could infer that readers in the jurisdiction actually followed the links, based solely on the post’s 1,778 page views.

While this a big win for Mr. Newton, the case itself must leave Canadian bloggers and online publishers lukewarm because of the clear implication that linking to third-party content can support defamation liability under some circumstances.  Indeed, the court paid a lot more attention to specific facts and details (was there invitation or encouragement? did readers follow the links?) than it did to big picture policy questions like: Can we expect online publishers to verify the statements made in every article they link to? What will happen to debate and discourse on the Internet if we impose this responsibility on them?  Granted, the Justices rejected a per se rule that linking = publication, so perhaps some of these concerns were hiding under the surface.

From a comparative perspective, online publishers in the U.S. would appear to have it much easier.  Section 230 of the Communications Decency Act (“Section 230”) almost certainly immunizes web publishers against defamation liability for linking to third-party content, regardless of whether they invite or encourage readers to follow the link.  There’s not a ton of case law on this point (in fact, nothing addresses the invitation or encouragement point in the linking context, to my knoweldge), but the plain language of Section 230 seems to fit linking as well as it fits hosting user comments. 

One U.S. case that might be helpful is Barrett v. Rosenthal,
146 P.3d 510 (Cal. 2006), in which the California Supreme Court held that Sections 230 protected Rosenthal for posting an allegedly defamatory article she received in an email from a co-defendant.  The court rejected any distinction between "actively selecting" defamatory content versus "passively hosting" it, reasoning that a contrary approach would "tend to chill the free exercise of Internet expression, and could frustrate the goal of providing an incentive for self-regulation." Id. at 527-29. A subsequent lower court decision, McVey v. Day, 2008 WL 5395214 (Cal Ct. App. Dec. 23, 2008) (unpublished), applied Section 230 to bar a defamation claim based on a link to a website provided by the defendant in an email, noting that, under Barrett, intermediaries who simply pass on information accessible on the Internet are immune from liability under Section 230.  Id. at *14. 

An interesting query is how a U.S. court would deal with the "endorsement" or "adoption" theory the B.C. case embraces. This might take an online speaker outside of Section 230 to the extent the endorsement or adoption is no longer "information provided by another information content provider." 47 U.S.C. § 230(c)(1).  We’re curious whether our readers know of any U.S. cases — online or offline, Section 230 or not — that address a speaker’s liability for endorsing or adopting someone else’s content, without the speaker actually having reproduced the allegedly defamatory statements in question.    

(Photo courtesy of Ian Muttoo on Flickr. Licensed under a CC Attribution-Share Alike 2.o Generic license.)

CNET has posted an interesting interview with U.S. Federal Chief Technology Officer Aneesh Chopra.  In a week where the Chair of the Federal Communications Commission has called for an open Internet supported by net neutrality principles enshrined into law, Chopra gives a good sense of where the U.S. is headed on technology policy with openness – open data and open standards – at the top of the list.  Chopra hedges on copyright reforms, but notes his experience with Creative Commons and the use of open textbooks with a track record of sharing and remixing. He affirms his strong support for net neutrality. He cites his three main deputies – Andrew McLaughlin, the former head of Google public policy, Beth Noveck, author of WikiGovernment and the inspiration behind the peer to patent project, and Scott Deutchman, who was a legal advisor at the FCC – as well as the new director of the USPTO, David Kappos (former had of IBM IP licensing). It is still early days in the Obama Administration, but the contrast to Canada could not be sharper. The U.S. is heading toward greater openness, whether in the network or within government.  Canada still does not have anything comparable and seems likely to fall further and further behind on technology policy.