Canada: The Copyright Modernization Act - How will the New Exceptions Impact You?

Last Updated: November 11 2010
Article by Margot E. Patterson

This article previously appeared in Focus on Construction | Infrastructure - November 2010

Bill C‐32, the Copyright Modernization Act, has been the subject of a great deal of attention and debate since it was introduced in June, over issues such as "digital locks", "users' rights", and whether and how Canada is keeping up with other countries in protecting copyright. Reforming the Copyright Act is a government priority, and with Parliament now back in session, the bill will soon be before the Committee for review.

Rapid advances in the use of digital media to access, use, share and copy works have had led to increased pressure to overhaul Canada's copyright legislation, which has not been significantly revised since the last general amendments in 1997. Over the years, the government has conducted stakeholder consultations and put forward bills intended to better align our legislation with the digital environment, and with international standards as set out in two 1996 World Intellectual Property Organization treaties. Two bills died on the Order Paper in 2005 and 2008. Bill C‐32 is the most recent proposal to balance out the policy concerns of increasing innovation and competition against creators' needs to protect their works. How best to achieve this balance has always been one of copyright's most fundamental issues.

This article focuses on the access to, and use of, works in the digital environment through copyright exceptions. Much of the tension in the Copyright Act which characterizes its balance is found in those significant words: "it is not an infringement of copyright to..." engage in those defined activities the government has identified as being exempt from liability.

The Bill C‐32 proposed exceptions are listed in the second part of this article. Before arriving there, however, it is worth noting that while copyright in Canada is statutory law, the courts and the Copyright Board of Canada have increasingly found themselves defining the reach and limits of rights and exceptions – in the absence of "modernized" legislation.

Defining the Rights of Owners and Users in Copyright Decisions

For example, in the 2002 decision Théberge v. Galerie d'Art du Petit Champlain inc., the Supreme Court of Canada said that the proper balance lies not only in recognizing creators' rights but also "in giving due weight to their limited nature". Two years later, in CCH Canadian Ltd. v. Law Society of Upper Canada, the Court observed that the Copyright Act sets out the rights and obligations of both copyright owners and users, and said that exceptions to copyright infringement can be understood as "users' rights".

In July, the Federal Court of Appeal upheld a Copyright Board decision that the fair dealing exception in the Copyright Act, which applies to "research", covered the 30‐second previews of songs available online for purchase and download. The Society of Composers, Authors and Music Publishers of Canada (SOCAN) had wanted its tariff for online uses of music to reflect the distinct value of previews and is now seeking an appeal to the Supreme Court. SOCAN wants the Court to rectify a "very significant and unwarranted expansion in the scope of" fair dealing, noting that the case "raises important questions about the scope and application of the Copyright Act, particularly the fair dealing defence", in the "new world of copyright", characterized by mass use of digital media.

Defining the Rights of Users and Owners in Legislation: the Bill C‐32 Exceptions

For those who wish to avoid copyright liability in their business operations or private uses, and for those who are closely watching how their rights will be limited under the Copyright Act, here is a list of the expanded or new exceptions to copyright protection proposed in Bill C‐32. Eventually, some aspects of these can be expected to be tested before copyright decision makers, such as the courts and the Copyright Board. As legislative proposals, however, all efforts are now focused on making sure the provisions are fair, workable, and meet the government's stated policy objectives.

Fair Dealing

Fair dealing has long been part of Canadian copyright law to allow certain uses that have significant social benefits. The existing fair dealing exceptions cover research and private study (s. 29), and with certain requirements, criticism or review (s. 29.1).

The bill adds education, parody and satire as noninfringing activities (s. 29). New exceptions are also provided for non‐commercial, usergenerated content (e.g. for mash‐ups of video clips (s. 29.21)), making copies for private purposes (e.g. "format shifting" songs to an MP3 player (s. 29.22)), time‐shifting programs on PVRs and other devices (s. 29.23), and for making backup copies to protect against loss or damage (s. 29.24).

Educational Institutions

The government has expanded the ability of teachers and students to use digital technology and copyright materials without liability. The bill adds exceptions for instructors to send lessons by telecommunication (e.g. for distance education (s. 30.01(3)), and for their students to copy the lesson in order to access it at a more convenient time (s. 30.01(5)). Exceptions are introduced where the educational institution has a reprographic reproduction (photocopy) licence to make digital copies of works (s. 30.02(1)), and for the instructor to print one copy of the work (s. 30.02(2)). Educational institutions and instructors are also granted exceptions to use works and other materials available through the Internet, subject to certain limitations (s. 30.04(1)).

Computer Programs and Technological Processes

As the government has pointed out, the last round of updates to the Copyright Act took place at a time when many of the digital media and technologies widely available today were not yet developed (or even imagined). The government states that it wants to permit greater flexibility in using computers, systems and programs in ways that do not create unanticipated or incidental copyright liability. It also has the policy goal of supporting innovative, competitive businesses and markets, such as the Canadian third‐party software market.

New exceptions are granted to copy a computer program to make it interoperable with another (s. 30.61), and to copy a work or other subjectmatter for the purposes of encryption research (s. 30.62), or for computer system or network security purposes (s. 30.63). A broad new exception is introduced for making temporary reproductions for "technological processes" (s. 30.71), which are not defined in the bill.

Broadcasting

The existing Copyright Act provides exceptions to programming undertakings – broadcasters or broadcast distributors that originate their own programming – to make certain reproductions without liability. The exceptions are limited in certain ways, however, and are not applicable where a copyright‐collective society seeks payment for the reproductions through a licence. To advance the government's policy to limit liability for making temporary, incidental digital copies, the bill considerably expands the scope of the exception and its availability to broadcasters.

Network Services

The government wants to clarify that ISPs and search engines are not liable when they deal with content only as intermediaries. The bill grants exceptions for "providing services related to the operation of the Internet or another digital network" (s. 31.1(1)), for caching and other similar incidental acts (s. 31.1(3)), and for hosting (s. 31.1(5)).

Perceptual Disabilities

The Copyright Act provides for exceptions for persons with disabilities. A new exception is granted for non‐profit organizations for the visually impaired, such as the CNIB, to make and send copies of works that are accessible to persons with a print disability to similar organizations outside Canada (s. 32.01(1)).

Private Uses and Non‐Commercial Infringement

Greater flexibility is given to use personal photos that are professionally taken: the bill provides new exceptions for private or non‐commercial use of photographs commissioned for personal purposes (s. 32.2(1)(f)).

Technological Protection Measure (TPM) Circumvention

The debate over access versus protection has made TPMs the focus of some of the most significant and contentious issues surrounding the bill. TPMs are sometimes called "digital locks", which may be used by rightsholders to control access to their work (e.g. by password or access code) or to prevent copying (e.g. by encrypting the work). Bill C‐32 supports these measures with legal protection, making it illegal to: bypass or circumvent the TPM; to manufacture, sell or distribute devices designed to hack TPMs; or to offer services to do so.

In the interest of fair access, innovation and competition, the government has limited the protection for TPMs by providing exceptions for circumventing them:

  • for purposes of law enforcement and national security (s. 41.11);
  • for the interoperability of computer programs (s. 41.12);
  • for encryption research (s. 41.13);
  • to prevent the collection or use of personal information (s. 41.14);
  • for computer system or network security purposes (s. 41.15);
  • for making works, performances or recordings accessible to persons with perceptual disabilities (s. 41.16);
  • for broadcasting undertakings, to benefit from the temporary recordings exception in s. 30.9, (s. 41.17); and
  • for unlocking a wireless device (s. 41.18).

The government may enact regulations adding to the above list of exceptions, if for example it considers it necessary to lift restrictions on competition in the applicable sector.

Bill C‐32 has the potential to change Canada's copyright landscape significantly. If history repeats itself, further broad copyright reform may not occur again for a number of years. This presents a unique opportunity to ensure that this bill – should it survive – delivers positive change for stakeholders which will stand the test of time.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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