Canada: IP Year In Review – Copyright

Last Updated: December 20 2005

Article by Antonio Turco, ©2005 Blake, Cassels & Graydon LLP

This article was originally published in Blakes Bulletin on Intellectual Property, December 2005.

2005 was another interesting year for copyright law in Canada. The year brought the promise of proposed amendments to the Copyright Act and a decision of the Federal Court of Appeal related to music file sharing. As well, the Supreme Court of Canada is hearing an appeal in a case involving electronic publishing.

Legislative Developments

Bill C-60. In June, the Federal government introduced Bill C-60, under the title An Act to Amend the Copyright Act. Bill C-60 embodied many of the proposed amendments identified in the Government Statement on Proposals for Copyright Reform and claims to fulfill the Canadian Government’s commitment to address short-term copyright reform issues (see Copyright Reform Legislation Introduced, Blakes Bulletin on Intellectual Property, October 2005). Bill C-60 is the first in what is likely to be a series of bills amending and updating the Copyright Act (the Act). The last time the Act underwent significant amendment was in 1997, a time when rapid changes in technologies made clear directions difficult, if not impossible, to predict.

With the dissolution of Parliament, Bill C-60 died on the order paper. A federal election will take place in January. At this time, it is impossible to predict the effect the outcome of the election will have on the future of copyright law reform in Canada.

In a 2002 report, the Government itemized short, medium and long-term issues on its copyright agenda. Medium term issues included remedies, rights in visual and audio-visual works, Crown copyright, collective rights management, term, the ephemeral recording exception and the private copying regime. Longer term issues included traditional knowledge, database protection, audio-visual performers’ rights, and signal rights for broadcasters. Bill C-60, dealing with most of the short term issues, is seen as an attempt to reflect the Government’s commitment to balance and account for the public interest in access to and use of creative works.

Also central to Bill C-60 are two World Intellectual Property Organization (WIPO) treaties: the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, which address copyright issues and the Internet. The treaties establish copyright protections for authors, sound recording makers, and performers of audio works. Canada signed the treaties in 1997, but cannot ratify them without amendments to the Act.

Portions of Bill C-60 were intended to address the challenges of digital technology by implementing the provisions of the WIPO treaties. In particular, rights holders would be given a variety of new rights. Many rights holders would have the sole right to control the making available of their copyrighted material on the Internet. Bill C-60 also placed an express limitation on the scope of the private copying exemption, by providing that private copies of sound recordings cannot be uploaded to the Internet or further distributed.

Bill C-60 also introduced provisions dealing with the circumvention of technological protection measures (TPMs), such as encryption, and the alteration or removal of rights management information (RMI), which identifies content protected by copyright, or its author/maker, and the terms and conditions of its use. However, these acts would only attract liability when done to further or to conceal copyright infringement.

Bill C-60 would exempt Internet service providers (ISPs) from liability for copyright material circulating on their networks for which they act purely as intermediaries. In addition, caching of electronic information by ISPs, done for efficiency purposes, would not itself constitute infringement. These provisions incorporate the conclusions of the Supreme Court of Canada in its 2004 SOCAN decision (see Copyright Law and the Internet – The Tariff 22 Case, Blakes Bulletin on Information Technology, July 2004). Liability would remain with those persons, including ISPs, who post or transmit copyrighted material without authorization. ISPs would potentially play a significant role in curbing infringing activities by virtue of the proposed “notice and notice” regime, under which an ISP would be required to forward any notice it receives from a copyright owner to a subscriber who is alleged to be engaged in infringing activities online. The ISP would also be required to retain, for a period of up to six months, information sufficient to identify the subscriber in question. This is in contrast to the “notice and takedown” regime implemented in the United States under the Digital Millennium Copyright Act.

Additionally, Bill C-60 aims to facilitate the use of digital technologies for educational and research purposes. Specifically, educational institutions would be permitted to use the Internet to deliver certain copyright protected material, for example, lectures and licensed teaching material, electronically, provided that appropriate safeguards are in place to prevent the unauthorized transmission of works.

Performers would also be given additional rights, such as rights over fixation, communication by telecommunication, public performance, and rental. Moral rights protection would be extended to performers’ performances.

The copyright bundle of rights would be expanded by the inclusion of a “first sale” right over any tangible, material form of a work.

Photographs have historically been treated quite differently from other copyright works. Ownership of copyright resides in the person commissioning (for valuable consideration) the original, rather than the author, even without a written assignment. The term of protection is a fixed time running from creation (rather than from the death of the author), for photographs owned by any corporation in which the author does not have voting control. Bill C-60 would eliminate these distinctions.

While Bill C-60 proposed a number of amendments to the Act, it is significant to note that it did not address several key issues that were covered in the government’s May 2004 report. The government had planned to release a consultation paper to deal with the issues that were not covered in Bill C-60.

Significant Decisions

Music File Sharing. In BMG Canada Inc. v. John Doe, the Federal Court of Appeal overturned a decision of the Federal Court which had served as a legal barrier to lawsuits proposed by members of the Canadian Recording Industry Association related to the peer-to-peer file sharing of copyrighted music. The issue before the Court was a motion by the plaintiffs for an order requiring certain ISPs to disclose the identity of their customers alleged to be liable for copyright infringement. The plaintiffs could not continue with their action because they could not identify the alleged infringers, who operated under pseudonyms on the Internet.

In his decision, the motions judge made four crucial findings that the Court of Appeal was required to consider:

One. Existing Canadian copyright law was insufficient to permit the recording industry to sue the alleged infringers.

Two. The privacy rights of the alleged infringers trumped any copyright interest of the part of the copyright owners.

Three. The recording industry was required to establish a prima facie case of copyright infringement.

Four. Certain key pieces of evidence were hearsay and, therefore, inadmissible.

The Court of Appeal dismissed the appeal by the plaintiffs, finding that the evidence on the record was defective. However, it did so without prejudice to the plaintiffs' right to commence a further application for disclosure of the identity of the alleged infringers and effectively set out a road map for the plaintiffs to follow to do so.

In rendering its decision, the Court of Appeal expressly addressed the conclusions of the motions judge related to substantive copyright law. The motions judge held that, with reference to subsection 80(1) of the Act, downloading a song for personal use does not amount to infringement. He also said that placing personal copies of songs onto shared directories, such that the songs were accessible by other computer users over the Internet, did not amount to authorization or distribution contrary to the Act. He found no difference between the activities of the alleged infringers placing a copy of a song in a shared directory linked to a peer-to-peer service and a library placing a photocopier in a room with copyrighted material. The motions judge felt that the mere act of placing a copy of a song on a shared directory, without some other positive act, did not amount to distribution. Such acts, in his view, did not result in secondary infringement unless there was evidence of knowledge on the part of the alleged infringer.

The Court of Appeal said that conclusions related to copyright infringement should not be reached at a preliminary stage of an action, without the benefit of a full evidentiary record. The Court of Appeal held that the danger in reaching such conclusions at the preliminary stages of an action without the availability of evidence, nor consideration of all applicable legal principles, are obvious. For example, the motions judge did not consider all the requirements of the private copying exception. Similarly, he did not consider whether the users' act of copying songs onto their shared directory could constitute authorization because it invited and permitted other persons with Internet access to have the musical works communicated to them and be copied by them.

Having noted the dangers of rendering legal conclusions at the preliminary stage, the Court of Appeal made it clear that, were this case to proceed further, it should be done on the basis that no findings on the issue of infringement have been made to date.

Future Decisions in the Supreme Court of Canada

Electronic Publishing. The Supreme Court of Canada is scheduled to hear an appeal from the decision of the Ontario Court of Appeal in Heather Robertson v. The Thomson Corporation (see Ontario Court of Appeal Examines Right of Freelance Authors, Blakes Bulletin on Information Technology, November 2004). Ms Robertson is a freelancer who wrote two articles that were published in a national newspaper. One, a book excerpt, was the subject of a written agreement between the newspaper and her publisher; the other, a book review, was written under an oral agreement. Copyright was not addressed in either agreement. The newspaper publisher placed the articles in online databases. Ms Robertson argues that, by doing so, the newspaper infringed her copyright.

The action was certified as a class action, with the class consisting of all freelance contributors to the newspaper other than those who died on or before December 31, 1942. Ms Robertson brought a motion for partial summary judgment and an injunction restraining the use of her works in the databases, on the basis that the reproduction of her articles in the databases did not fall within the newspaper’s copyright in the collective work and infringed her copyright. The application for partial summary judgment was dismissed by the Ontario Superior Court of Justice, which found that genuine issues remained for trial. The Court of Appeal dismissed both an appeal and a cross-appeal. The Supreme Court of Canada will now decide the issue.

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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