With the defeat of the Conservative government on March 25, Bill C-32 – the so-called Copyright Modernization Act – died on the order paper, joining its predecessors, Bill C-60 (2005) and Bill C-61 (2008), in the scrap heap of Canadian copyright reform. A reform process that began in 2001 and has produced three failed bills in 10 years must surely rank among the most ignominious in the history of copyright law.
Supporters of Bill C-32 will lament that its demise has further delayed Canada’s ratification of the 1996 WIPO treaties, which were designed to bring international copyright law into the digital age. Certainly, the Conservative government touted the potential of the Bill to promote new markets for digital content and fight piracy, focusing on two key components: the proposed protections for technological protection measures – TPMs, for short – and a new provision that would target those who enable copyright infringement, such as illegal peer-to-peer file sharing sites. But the reality is that, without substantial amendments, Bill C-32 wouldn’t have done its job even had it passed.
But TPMs are not a complete answer. Even the brightest minds in Silicon Valley have yet to devise a digital lock that can’t be picked, and even with legal protections in place, it would remain an uphill climb to detect circumvention, locate infringers, and secure legal remedies. And what about the many digital business models that don’t use TPMs? Putting digital locks on music CDs proved to be a failed experiment for the major record labels, and even the market-dominating iTunes Store abandoned TPMs from its online music downloads when it became clear that its customers wanted to enjoy their content on multiple devices.
Addressing these problems is not a simple matter. It requires a delicate combination of enforcement and education, along with cooperation among the many stakeholders in the digital economy. Unfortunately, Bill C-32 failed on all three counts.
Enforcement: Confusing Prohibitions and Ineffective Remedies
Consider the proposed prohibition in Bill C-32 on so-called “online enablers” – those who provide services that are “designed primarily to enable acts of copyright infringement.” Under the Copyright Act, it is already illegal to “authorize” copyright infringement – that is, to do anything to “sanction, approve or countenance” another person’s infringing act. As interpreted by Canadian courts, however, authorization has been tough to establish. So, in Bill C-32, the government seemed to take a page out of the American playbook, modelling the online enabler provisions after the U.S. doctrine of contributory infringement. So far, so good – after all, it was that very doctrine that led to the landmark decision in MGM v. Grokster, which shut down what was then the dominant file-sharing service in the world.
But a closer look at Bill C-32 shows that its proposed online enabler provisions were all bark and no bite. To take just a few examples:
- The prohibition was restricted to services that are “designed primarily to enable acts of copyright infringement.” What about services that may have been designed for other purposes but are used predominantly for infringing purposes? This is not just splitting hairs: after all, many peer-to-peer networks were designed to facilitate the consensual swapping of academic and other material, but are used overwhelmingly for the illegal sharing of music and video files.
- The prohibition would have applied only “if an actual infringement of copyright occurs by means of the Internet or another digital network as a result of that service.” Want to take proactive steps to prevent infringement by a threatening new online service? You’d have had to look elsewhere.
- In determining whether a person has infringed copyright as an online enabler, the court was directed to consider, among other things, whether the person knew that the service “was used to enable a significant number of acts of copyright infringement” and whether the service had “significant uses other than to enable acts of copyright infringement.” But no guidance was given as to how many infringing acts, or what other types of use, might be considered “significant.” Years of litigation would have been required before the scope of these provisions could be clearly understood.
Those weren’t the only problems. Under the law as it exists today, copyright owners are entitled to elect, in lieu of actual damages, to recover statutory damages of between $500 and $20,000 per work infringed. But Bill C-32 would have made that remedy unavailable against online enablers. As a result, rightsholders who want to pursue relief against those infringers would have been forced to prove actual damages – a notoriously difficult thing to do in many copyright cases. This limitation seems curiously at odds with the government’s stated intention that these provisions be used to crack down on online file sharing. If the government were serious about achieving that goal, it would not have moved to deprive rightsholders of access to statutory damages, the most effective deterrent remedy in the Act.
Education: Sending the Wrong Message to Students and Teachers
Copyright stakeholders don’t agree on much these days. But one thing that seems to be universally acknowledged is that if respect for copyright is to be restored, the public will need a better understanding of what it is and why it’s important. An entire generation of consumers has now grown up in an environment in which the traditional models of paying for content have given way to piracy and unauthorized file sharing as the dominant forms of distribution. It will take more than an attempted crackdown on copyright pirates to reverse this trend. Education about the purpose and importance of copyright is key.
Unfortunately – and perhaps inadvertently – Bill C-32 undermined this principle by introducing, as part of an expansive package of new exceptions for the education sector, a provision that would all but eliminate liability for teachers, students and others acting under the authority of an educational institution when using content that is available through the Internet. Under this provision, sometimes referred to as the “publicly-available information” or “PAM” exception, rightsholders would have been forced to take affirmative steps to protect their work, either by using a TPM or placing a clearly visible notice – and not just the well-known © symbol – on the website where the work is available. Only then, or if the teacher or student had reason to believe that the work was made available without the consent of the copyright owner, would any obligation have arisen to seek a licence or pay a royalty for the use.
The PAM exception would have sent exactly the wrong message to both teachers and students. Instead of learning about the importance of balancing user access with respect for the rights of creators, which would have promoted the goals of reducing online piracy and infringement, students would instead have come to believe that material available through the Internet is free unless someone specifically indicates otherwise. In fact, perhaps more so than any other existing or proposed exception, the PAM exception would have turned copyright upside down, making use without permission the rule rather than the exception and teaching students to ignore copyright rather than respecting it. Not only would this have done nothing to fight piracy, it would have created a serious challenge to the future of copyright.
Cooperation: Bringing Stakeholders Together?
More and more, rightsholders are responding to the challenges of the digital age by reconsidering the traditional conception of copyright. Instead of attempting to control the use of their works, they are interested in promoting access, and compensation, through innovative licensing mechanisms. However, to achieve this goal requires meaningful incentives for all stakeholders to participate in the creation of these systems. In its approach to liability for Internet service providers (ISPs), Bill C-32 would have moved in exactly the opposite direction.
The question of ISP liability has been dealt with differently in various jurisdictions. The U.S., one of the first to move on the issue, opted for a “notice and takedown” system, which requires ISPs to take steps to disable access to infringing content after receiving a notice of claimed infringement from a rightsholder. More recently, other countries have experimented with “graduated response” systems, which require ISPs to deliver a series of notices to alleged infringers, warning them of the potential legal consequences of their actions, before taking steps to stop the infringing use through coercive means. (Contrary to popular belief, there is much more to graduated response systems than a “three strikes, you’re out” policy that culminates in the loss of Internet access for the infringer, but that’s a whole other article.)
Bill C-32 would have created a “notice and notice” system that would have imposed far more lenient obligations on ISPs. Upon receiving a notice of claimed infringement, the ISP would have been required to deliver it to the alleged infringer. Period. No takedown requirement, no further notices. And the failure to deliver the notice would have resulted in a penalty of no more than $10,000 for the ISP.
Not surprisingly, opinions differ greatly on whether and to what extent ISPs should be liable for infringing activities that take place through the use of their facilities, and this article is not the place to debate the differing viewpoints. The question, instead, is what, if anything, a “notice and notice” system would do to combat piracy, either by discouraging online infringement or by encouraging ISPs to engage with other copyright stakeholders in developing progressive solutions to the problem. The combination of expansive immunities for ISPs and weak penalties for failure to comply with their minimal obligations would seem to accomplish little on either count.
Whatever its strengths may have been , Bill C-32 was not an anti-piracy bill. It simply failed to provide the right mix of incentives, education and enforcement to make a meaningful contribution to the very complex problems faced by the content industries. If the next government is serious about fighting online piracy, it will need to think very carefully about the issues, and take a more realistic view of the problem and the available solutions, before tabling its inevitable copyright reform bill. Maybe in that case, the fourth time could be the charm.