Canada: Amendments To The Copyright Act Proclaimed Into Force

On November 7, 2012, the majority of the provisions of the Copyright Modernization Act were proclaimed into force. The amendments are wide-ranging and represent the first major changes to the Copyright Act since 1997. The most significant changes to the Copyright Act now in force are as follows:

Technological Protection Measures

One of the cornerstones of the amendments to the Copyright Act is the introduction of provisions that prohibit the circumvention of technological protection measures ("TPM") or "digital locks", i.e. unauthorized descrambling, decryption, avoidance, bypassing, removal, deactivation and impairment of a TPM. This prohibition is a general and overriding provision that trumps many of the other exemptions provided for under the amendments. The prohibition on circumventing TPMs also encompasses offering services and providing any device designed primarily for the purpose of circumventing a TPM.

Where there is a breach of the anti-circumvention of TPM provisions, the owner of copyright is entitled to all remedies available in situations of infringement, except in limited circumstances such as statutory damages where the contravention was only for private purposes. In addition, the circumvention of a TPM triggers criminal sanctions for individuals who are found guilty of infringement in commercial contexts.

There are only limited exceptions to the prohibition on the circumvention of a TPM:

  • investigations related to law enforcement and national security
  • acts related to the interoperability of computer programs
  • encryption research
  • assessing the vulnerability of security of a computer, computer system or network
  • making a work perceptible to persons with perceptual disabilities
  • broadcasting undertakings
  • gaining access to a telecommunication service by means of the radio apparatus (i.e. "unlocking" cell phones)
  • verifying and preventing a TPM from collecting and communicating personal information about the user where the TPM was not accompanied by a notice of that fact and where the user was not provided with the option to prevent the collection and communication of his or her personal information.

Prohibition on File Sharing and Expan ded Rights for Performers and Sound Recording Makers

The amendments to the Copyright Act provide performers and sound recording makers with expanded rights, including the sole right to authorize the making available and communication of sound recordings to the public over the Internet. These amendments have the impact of prohibiting individuals from sharing digital music online.

The Copyright Act has also been amended to expand the scope of moral rights of performers in respect of the above rights while extending the term of copyright protection for performers in a sound recording to 50 years from the first publication of the sound recording or 99 years from the musical performance, whichever is earlier. For sound recording makers, the term of copyright protection in a sound recording is extended to 50 years from the first fixation or first publication of the sound recording. Copyright in a communication signal subsists for 50 years from when the communication signal is broadcast.

Statutory Damages for Copyright Infringement

The statutory damages provisions under the Copyright Act have been amended to make distinctions between commercial and non commercial infringements and provide copyright owners with the ability to elect statutory damages of: (1) $500 to $20,000 if all of the infringements are for commercial purposes; and (2) $100 to $5,000 if all of the infringements are for non-commercial purposes.

These amendments decrease the scope of statutory damages available to copyright owners against infringers since the prior version of the Copyright Act provided that a copyright owner could elect for statutory damages of between $500 to $20,000 per work infringed. The amendments limit such statutory damages in the case of non-commercial infringements from between $100 to $5,000 for all infringements in a single proceeding for all works infringed.

Anti-Piracy Provisions

The amendments make it an infringement of copyright for any person to provide a service that is designed primarily for the purpose of enabling acts of copyright infringement over the Internet, e.g. peer-to-peer (P2P) distribution.

Expanded Exceptions to the Infringement of Copyright

The amendments have introduced several new exceptions to the infringement of copyright: Expansion of the "Fair Dealing" Exception - By adding education, parody, and satire to the existing "fair dealing" exceptions for research, criticism, review or news reporting, and private study, the amendments have expanded the scope of the fair dealing exception to the infringement of copyright.

Non-Commercial User-Generated Content - "Mashups" - A new exception to the infringement of copyright now exists for non-commercial user-generated content, which permits an individual to use an existing copyright protected work in the creation of a new work in certain circumstances. This new exception exempts from infringement the creation, use, and dissemination of "mash-ups", i.e. a work created by combining or remixing two or more distinct works that are commonly found in the form of videos available on websites such as YouTube.

Reproduction for Private Purposes - "Format Shifting" - An individual may now reproduce a work for private purposes that amounts to "format shifting" under certain circumstances. However, this exception does not apply to reproductions of musical works onto an "audio recording medium", such as a CD, or if the reproductions are not later destroyed. There are also a number of uses that do not fall under the exception and are infringements of copyright, e.g. borrowing a CD and transferring the content from the CD to an iPod.

Reproduction for Later Listening or Viewing - "Time Shifting" - An individual may now under certain circumstances record using any recording device a broadcast television, radio or Internet program for the purpose of listening or viewing that program later. While the amendments allow for "time shifting", the exception does not apply to on-demand services where the user can receive the work, performance, and sound recording at a time of their choosing.

Backup Copies - An individual who owns or has a license to use a "source copy" of a work may now reproduce that source copy under certain circumstances. Where a backup is made in such cases, the backup copy becomes the source copy and the user is required to destroy all reproductions made.

Network Services - Limitation of Liability for ISPs - Essentially codifying the decision of the Supreme Court of Canada's decision in SOCAN v. CAIP, 2004 SCC 45, an ISP is exempted from the infringement of copyright when it acts solely as intermediaries in providing services related to the operation of the Internet and other digital networks, including communicating, hosting and caching activities, provided that the ISP does not modify the content in the process.

Temporary Reproductions for Technological Processes - An exception from infringement now exists for temporary reproductions of a work for technological processes if: (1) the reproduction forms an essential part of the technological process; (2) the reproduction's only purpose is to facilitate a use that is not an infringement of copyright; and (3) the reproduction only exists for the duration of the technological process.

Expanded Exceptions for Educational Institutions

The amendments also expanded the limited exception to infringement provisions applicable for educational institutions, such as:

Works Not Commercially Available - The amendments create an expanded exception to the infringement of copyright for an education institutions to reproduce a work provided that the work is not otherwise commercially available and that reproduction is done for the purposes of education or training on its premises.

Distance Education - Subject to certain conditions, an educational institution will now be permitted to disseminate over the Internet a "lesson" (i.e. all or part of a lesson, test, or examination) to students enrolled in a course provided by the educational institution. Students who have received such a lesson over the Internet are permitted to reproduce that lesson in order to listen or view it at another time, provided that the copy is destroyed 30-days after the student receives their final grades and provided no TPM is circumvented in the process.

Digital Reproduction - Subject to certain conditions, an educational institution that has a reprographic reproduction (i.e. photocopying) license with a collective society will be permitted to make a digital reproduction of the paper form and to communicate that digital reproduction over the Internet. The amendments include detailed provisions governing the application of this exception.

Works Available Online - Finally, the amendments allow educational institutions who, for educational or training purposes, reproduces, communicates or performs in public a work that is available through the Internet, provided that: (1) such acts are made in respect of services offered to students; (2) the source of the work is cited by the educational institution; (3) the work is not protected by a TPM and the Internet site does not feature a notice prohibiting such acts; and (4) the work was made available online without the consent of the author.

Expanded Exceptions for Libraries, Archives, and Museums

The amendments also expand on the limited exception to infringement provisions applicable to libraries, archives, and museums ("LAMs"). In particular, the amendments create an exception to the infringement of copyright for LAMs in respect of photocopies made for patrons on the basis of research or private study. These amendments require that the LAM limit the reproduction to a single work and require that the LAM inform the patron that the copy is only to be used for research or private study and that any other use may require authorization from the copyright owner.

While LAMs are permitted to make digital copies for a requesting patron who made the request from another LAM, the providing LAM is required to take measures to prevent the printing of more than one copy, communicating the digital copy to another person, and using the digital copy for more than 5 business days from the request.

Ownership of Copyright in Engravings, Photo graphs and Portrait s

The amendments repeal the provision under the previous regime, which provided that it is the person who commissions an engraving, photograph or portrait who is the first owner of copyright. The previous provision is replaced with the general provision that the author of a work is the first owner of copyright. The effect of this provision brings engravings, photographs and portraits in line with other works under the Copyright Act.

Private Copying Exemption for MicroSD Cards

On November 7, 2012, the government also enacted the MicroSD Cards Exclusion Regulations (Copyright Act), which will exclude MicroSD cards from the "private copying levy". MicroSD memory cards will now be exempt from the private copying levy since, as noted in the government's Regulatory Impact Analysis Statement that accompanied the Regulations, the government feared a negative impact on e-commerce business in Canada if such a levy was allowed.

Review of the Copyright Act by Parliament

The Copyright Act is to be reviewed by Parliament every five years.

Provisions Not Yet Proclaimed Into Force

As part of the Governor in Council's two-staged approach to bringing the amendments to the Copyright Act into force, there are certain provisions of the new law that are to be enacted at a later time, including:

Notice-and-Notice System for Claimed Infringement

This amendment, once introduced, will bring into force a "notice-and-notice" system that allows copyright owners to send a notice of claimed infringement in a specified format to an Internet services provider ("ISP").

Once a notice of claimed infringement is received, the ISP will then be required to forward that notice to the alleged infringer. Should an ISP fail to comply under this "notice-and-notice" system, the copyright owner is entitled to claim statutory damages against the ISP of between $5,000 to $10,000. This enactment will essentially bring into law what is already considered industry practice; however, the government is currently in the process of consulting stakeholders to prepare the accompanying Regulations, and no date for enactment has been specified.

Provisions Related to International Copyright Treaties

The amendments have delayed the coming into force of the provisions referring to the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT) until the date that those treaties come into force in Canada.

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