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Bill C-32: My Perspective on the Key Issues

By Michael Geist

With the House of Commons back in session this week, there has been growing speculation that Bill C-32, the copyright reform bill, will emerge as a government priority.  Given the rhetoric we've seen over the past three months, it seems likely that proponents of the digital lock approach will seek to paint critics as anti-copyright, pirates, and radical extremists.  While the rhetoric may seek to delegitimize consumers and many Canadians vocal on the copyright issue, the reality is that many consumer and education groups have been far more supportive of the bill than proponents such as the music industry.

With the caveat that I can only speak for myself, the following post covers the most contentious aspects of Bill C-32 by aggregating some of my posts and comments.  When the bill was first introduced, my immediate response was that the government did a good job compromising on some very contentious issues (ISP liability, fair dealing, consumer provisions, statutory damages) but that the digital lock approach represented a huge flaw that undermined many of the positive steps forward.  This remains my view - if we can find a compromise on digital locks, I think this is a bill worth supporting.  The following five issues are likely to be the among most contentious in the upcoming hearings:

1.   Digital Lock Provisions (anti-circumvention rules)

The digital lock rules, which are an import from the U.S., are by far the biggest problem with the bill.  I outlined the problems with the digital lock provision in a five-part series (1, 2, 3, 4, 5 or PDF of entire series).  I touched on a wide range of issues, including how the digital lock rules effectively trump virtually all other rights in the bill (particularly fair dealing and the new consumer exceptions) and extend far beyond what is required to comply with the WIPO Internet treaties.  In the months since the bill was introduced, it has become apparent that the Canadian proposal is far more restrictive than that found in the U.S., where the DMCA now has exceptions for DVD circumvention in some non-commercial cases and for jailbreaking cellphones.  I have also posted specific recommended reforms to the digital lock rules, available as a PDF download.  Note that all opposition parties have expressed concerns with the C-32 digital lock approach.

2.   Fair Dealing Reform

I have characterized the fair dealing reforms, which add education, parody, and satire to the list of fair dealing categories, as a reasonable compromise between those seeking a U.S.-style fair use provision and those against new exception categories.  More importantly, I've posted on why those arguing that the reforms will result in hundreds of millions of dollars being lost by the Canadian cultural sector are engaged in fear-mongering and hyperbole.  Indeed, the recent Federal Court of Appeal decision involving Access Copyright made it very clear that the reforms would have had no impact on that case.  This is because the inclusion of education as a category of fair dealing does not mean that any use for educational purposes qualifies as a fair dealing.  Rather, all uses must still meet the six-part fair dealing test.  The C-32 change only means that the use can undergo a fair dealing analysis, not that all uses are fair.  In fact, observers must be cautious about claims that the fair dealing reforms merely require clarification, as those claims appear grounded in an attempt to rollback fair dealing more broadly.

Closely related to fair dealing are the new consumer exceptions, including time shifting, format shifting, backup copies, and the YouTube exception.  I supportive of these exceptions as they reflect reasonable consumer expectations and help encourage new creativity.  The primary problem with the new consumer exceptions is that they remain subject to the digital lock, meaning that those new rights disappear anytime a rights holder locks their content down.

3.   ISP Liability

Bill C-32 adopts the successful notice-and-notice approach that has been used in Canada on an informal basis for many years.  The creation of a legal safe harbour that protects Internet intermediaries from liability for the actions of their users is critically important to foster a robust and vibrant online world.  Without such protections, intermediaries (which include Internet service providers, search engines, video sites, blog hosts, and individual bloggers) frequently remove legitimate content in the face of legal threats.  Canadian law should include an explicit safe harbour that insulates intermediaries from liability where they follow a prescribed model that balances the interests of users and content owners. I've written frequently over the years on how notice-and-notice has proven effective (here and here) and why alternatives such as notice-and-takedown raise serious concerns.

4.   Statutory Damages Reform

Bill C-32 contains important provisions that distinguish between commercial and non-commercial infringement for the purposes of statutory damages. Canada is one of the only countries in the world to have a statutory damages provision.  It currently creates the prospect of massive liability - up to $20,000 per infringement - without any evidence of actual loss.  This system may have been designed for commercial-scale infringement, but its primary use today is found in the U.S. where statutory damages led to the massive liability for several peer-to-peer file sharing defendants and leaves many with little option but onerous settlement.  Bill C-32 recognizes this problem and creates a $5,000 cap on liability in non-commercial cases.  This is still significant potential liability, but it represents a good compromise, notwithstanding CRIA claims that it would create a licence to steal.

5.   Extending the Private Copying Levy

The fifth major issue involves a change not contained in C-32 - the extension of the private copying levy to cover iPods and other devices.  I have expressed concern with previous private copying extension proposals, arguing we should fix the problems with the current system first as well as highlighting the potential for very broad coverage including cellphones and personal computers, the risk of extending the levy to video with a significant bump in costs, the competitive impact on Canadian consumer pricing and the development of a large grey market or cross border shopping, and the interaction between private copying and digital locks.  Moreover, I have noted that many proponents of extending the levy are reluctant to acknowledge that doing so should fully legalize non-commercial, personal downloading, engaging in a policy bait-and-switch where they use file sharing as the basis to obtain the levy extension but then do not legalize the sharing (the Songwriters Association of Canada are a notable exception, though they call for a new levy on ISPs as an alternative).

Those are my major positions (I have also called for reforms on issues such as crown copyright) on C-32.  Not only is this not "anti-copyright", but it far more supportive of the bill than many in the music and publishing industries.

Full post as published by Michael Geist on September 21, 2010 (boomark / email).