LibertyVoice

The U.S. government has released its annual Special 301 report in which it purports to identify those countries with inadequate intellectual property laws.  Given the recent history and the way in which the list is developed, it will come as no surprise that the U.S. is again implausibly claiming that Canada is among the worst of the worst.  As a starting point, it should be noted that the Canadian government does not take this exercise particularly seriously.  As an official with the Department of Foreign Affairs once told a House of Commons committee:

In regard to the watch list, Canada does not recognize the 301 watch list process. It basically lacks reliable and objective analysis. It's driven entirely by U.S. industry. We have repeatedly raised this issue of the lack of objective analysis in the 301 watch list process with our U.S. counterparts.

This year's report is particularly embarrassing for the U.S. since it not only lacks in credible data, but ignores the submission from CCIA (which represents some of the world's largest technology and Internet companies including Microsoft, Google, T-Mobile, Fujitsu, AMD, eBay, Intuit, Oracle, and Yahoo) that argued that it is completely inappropriate to place Canada on the list.  The technology giants reminded the USTR that "Canada’s current copyright law and practice clearly satisfy the statutory 'adequate and effective' standard. Indeed, in a number respects, Canada's laws are more protective of creators than those of the United States."

With respect to the actual data, the USTR report is largely rhetoric rather than reality.  The reality is:

• According to the software industry's own piracy numbers, Canada rate is declining and is dramatically lower than any other country on the priority watch list.  Moreover, even the Business Software Alliance has characterized Canada as a "low piracy country."
• According the recording industry's own numbers, the Canadian recording industry did not decline last year as badly as the U.S. or Japan and it ranked well ahead of the global average for digital music sales growth.
• According to the motion picture industry, illegal camcording has declined rapidly in Canada in recent years.  Canada is one of the only countries in the world with criminal convictions for such activities.
• Last year Canada amended its Proceeds of Crime regulations by removing the Copyright Act from the list.  The change had been requested by copyright lobby groups.
• Canada is often characterized as a prominent home for BitTorrent sites, yet there are more sites hosted in European countries such as the Netherlands but it is not included on the list.
• Canada is the only participant in the Anti-Counterfeiting Trade Agreement to be named to the Priority Watch List.  Apparently, our involvement in those talks counts for little.
• Comparative analysis of U.S. and Canadian copyright law identifies numerous areas where Canada's copyright laws are stronger than those found in the U.S.
• The RCMP has prioritized intellectual property enforcement and conducted thousands of investigations in recent years.
• Canadian enforcement measures include a host of other provisions that are not found in many countries that do not make the USTR list, such as statutory damages and anti-camcording rules.

Looking beyond just Canada, the list is so large, that it is rendered meaningless.  According to the report, approximately 4.3 billion people live in countries without effective intellectual property protection.  Since the report does not include any African countries outside of North Africa, the U.S. is effectively saying that only a small percentage of the world meet its standard for IP protection.  Canada is not outlier, it's in good company with the fastest growing economies in the world (the BRIC countries are there) and European countries like Norway, Italy, and Spain. 

In other words, the embarrassment is not Canadian law.  Rather, the embarrassment falls on the U.S. for promoting this bullying exercise and on the Canadian copyright lobby groups who seemingly welcome the chance to criticize their own country.

The IFPI, the global RIAA, this week released its annual Recording Industry in Numbers report that tracks global record sales.  In its release, it chose to target two countries – Canada and Spain – for declining sales and linked those declines to copyright law.  As it no doubt intended, the IFPI release succeeded in generating media coverage, including two Globe and Mail stories (here and here) that dutifully reported that Canada was perceived a piracy haven and was being criticized (again) by the global recording industry.

Yet it doesn't take much digging to see that the IFPI targeted the wrong country. Canadian sales declined by 7.4 percent last year.  That is obviously bad news for the industry, but it is almost identical to the global average of 7.2 percent.  In other words, far from a piracy outlier, Canada was actually consistent with declines around the world.  Moreover, while the IFPI chose to target Canada, the reality is the declines were far bigger in the United States (10.7 percent) and Japan (10.8 percent) yet neither country is described as a piracy haven. The IFPI data also shows that Canada was ahead of the curve on digital music sales growth. Canadian digital sales grew by 38 percent last year, while globally the number was 9.2 percent (the U.S. grew at 8 percent, below the global average).

Of course, none of these data points helped advance the agenda of painting Canada as a piracy haven, so they are conveniently ignored.  Look for more of the same later today when the U.S. government releases it annual Special 301 report and implausibly claims that Canada is one of the world's worst copyright outlaws.

The Toronto Sun reports that Pirate Party of Canada has received official party status. 

Last summer, TorrentFreak encouraged its Canadian readers to have their voice heard in the country’s public consultations on copyright reform. The response to this call for action was overwhelming, and as a result a pro-copyright lawyer is now claiming that we “systematically abused” Canadian democracy.

An Australian blogger reports on a recent conversation with Australian government officials discussing ACTA and copyright related issues.  The report indicates that Australia – which changed its copyright laws under pressure from the U.S. as part of a trade deal – now borrows from the U.S. playbook in criticizing the current state of Canadian law.

Yesterday's ACTA leak that provides full detail on each country's negotiation position attracted immediate media attention, with the New Zealand press picking up on the story (and that country's tough position), while the Australian press lamented their country's relative silence at the negotiation table.  And what of Canada?  The Canadian positions on the Internet chapter culled from the EU leaked document are:

• expresses concern with the disparity between the section title and the scope of content of the section
• seeks clarification of the scope of "related rights" in provision dealing with a general enforcement obligation. Argues that it should be consistent with the Criminal and Civil Enforcement chapters
• concerns with a footnote on third party liability that seeks to define its scope.  Canada notes that the footnote effectively changes the meaning of the main text.
• seeks more information on the scope of "modification" to the content in a provision on online service providers
• notes that the relationship between third party liability and ISP limitation on liability is unclear
• seeks clarification of the relationship of anti-circumvention exceptions to access control measures

That's it.  Compare the Canadian focus on clarifications of legal language and hints at opposition with the far-tougher, more explicit New Zealand positions:

• on the preamble: "the words 'in order to facilitate the continued development of an industry engaging in providing information services online' provide an interpretative gloss on Article 2.17.3 which appears to go beyond the general aim of ACTA to provide a framework for the enforcement of intellectual property rights
• on safe harbours: "we understand [Paragraph (a)(iii) covers information location tools such as search engines.  It is not clear how the provision or use of information location tools breaches copyright, or why third party liability should arise for the provision of such tools.  We would welcome further explanation on the need to provide such a safe harbour."
• on establishing a policy that could lead to three strikes: "New Zealand does not support the inclusion of this condition.  New Zealand can, however, support the inclusion of a provision aimed at preventing a party to ACTA conditioning safe harbours on an online service provider "monitoring its services or affirmatively seeking facts indicating that infringing activity is occurring."
• on anti-circumvention rules: "The paragraphs refer to 'adequate legal protection' as well as remedies, which is inconsistent [with] the objective of ACTA to establish standards for the enforcement of intellectual property rights and the ACTA discussion paper. In particular, we note that the discussion paper only refers to parties providing 'remedies against circumvention of technological protection measures used by copyright owners and the trafficking of circumvention devices."  New Zealand does not support protection being mandated against circumvention of TPMs where the underlyig work is not protected by copyright.  In particular, we do not support protection against circumvention of access control TPMs because access control is not an exclusive right given to copyright owners."
• on rights management information: New Zealand does not support the protection of RMIs extending to information that identifies a performance, the performer of the performance, the owner of any right in the performance, or the producer of a phonogram."

Why is the Canadian delegation content to say virtually nothing and leave it to New Zealand to take the strongest position on these ACTA issues?  Why does Canada not join with New Zealand to present a stronger front against the extension of ACTA far beyond copyright enforcement?

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.