Chapter 2, Provisions and Operation of the Act (Continued)

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Supporting Culture and Innovation: Report on the Provisions and Operation of the Copyright Act

B. Access to and Use of Works and Other Subject Matter

Although the recognition and protection of rights provide the basis for copyright, works and other subject matter are generally created in order to be disseminated. Uses of works typically comprise three different types: individual use of copyright material for private consumption: use of copyright material for commercial exploitation (e.g. the use of music by broadcasters); and use of copyright material by non-profit institutions (such as educational institutions). A distinction may also be made between direct access to or use of a work (i.e. performing to an audience) and uses in which the work is incorporated into another product, which is then dealt with separately.

Legal access to protected material can be achieved in many ways: purchasing books or sound recordings or other material; seeking authorization from individual rights holders directly; negotiating licences via collective societies to which rights holders have assigned their rights; or making use of exceptions that are provided in the Copyright Act. Note that exceptions or limitations may or may not entail payment to rights holders.

The Government of Canada has been encouraging the collective management of rights as a means to ensure both proper remuneration for rights holders and efficient access to copyright material. By and large, collective management has worked well, but many stakeholders seek legislative reform to enhance access. This section addresses user issues relating to rights management, exceptions and the private copying regime.

B.1 Rights Management

B.1.1 Collective management of copyright

Issue:Whether Part VII of the Act should be amended to simplify rights acquisition and clearance for the benefit of both rights holders and users.

Collective societies were established to enable the licensing of copyright material when the individual management and enforcement of rights for specific uses would be unmanageably complex, costly and time-consuming. Users and consumers of copyright must be able to clear copyright efficiently and at the lowest cost possible. At the same time, rights holders are more likely to be compensated for the use of their material when copyright clearance is fast, simple and straightforward. For example, a person wishing to develop new material by integrating pre-existing material into his or her work may have to clear copyright from a variety of rights holders and even collective societies. Respect for copyright and efficiency of the process could both be strengthened and improved if that user could clear all rights through a "one-stop" or "minimum-stops" process.

In 1995, the Information Highway Advisory Council (IHAC) recommended that "the federal government should encourage industry and creator and user communities in the creation of administrative systems to streamline the clearance of rights for use of works in a digital medium."64 There currently exist in Canada 36 collectives, more than in any other country. The advent of digital technology and the Internet have created additional pressures to streamline collective management. The Internet provides easy access to millions of works and other materials, including government documents; legal, scientific, medical and other professional journals; music; video excerpts; e-books; etc. In many cases though, uses other than browsing require the clearance of copyright through a number of individual rights holders or collective societies.

The Government of Canada has undertaken concrete measures to implement the IHAC's recommendation. It has invited Canadian copyright collectives to round tables to explore practical solutions. These include administrative solutions that facilitate a more efficient rights management system, and possible legislative solutions such as extended licensing (i.e. a licensing scheme that allows for a collective with a substantial number of voluntary participating rights holders in a certain category to extend its licensing authority to all national and foreign rights holders in the same category). An Electronic Copyright Fund has also been created to assist collectives in improving the collective management of rights in the digital environment.

B.1.2 Copyright Board

Issue: Whether section 66 of the Act should be amended to provide for streamlined and more efficient administrative procedures for the Copyright Board.

Certain collective societies are subject to the tariff-setting power of the Copyright Board, an administrative body whose powers and jurisdiction are set out under Part VII of the Act. This part also sets out the process that the Board must follow in certifying tariffs.

Before 1988, the Copyright Board had tariff-setting jurisdiction over performing rights societies representing composers and music publishers with respect to public performance and communication to the public of musical works. As a result of amendments to the Act since 1988, the Board was assigned new duties, such as:

  • setting tariffs (on which royalties are based) payable to collective societies representing sound recording makers and performers with respect to public performance and communication to the public of sound recordings and performances;
  • setting tariffs with respect to the retransmission of works contained in distant television and radio signals;
  • setting the levies with respect to blank audio recording media (private copying);
  • setting tariffs with respect to the use of certain material by educational institutions;
  • setting the royalties and related conditions of licensing where the collective society and the user are unable to agree, with respect to uses and rights other than those described previously;
  • examining, at the request of the Commissioner of Competition, particular licence agreements with collective societies that have been filed with the Board; and
  • issuing licences with respect to published material of rights holders who cannot be located.

In setting tariffs, the Board considers tariff proposals filed by the collective societies and takes into account the representations of interested parties, including those who may object to the proposed tariff.

Many consider the Copyright Board process to be both cumbersome and costly. At a disadvantage are those collectives and users who do not have the means or resources to present an efficient case before the Board. Cost awards, as is the case with the Canadian Radio-television and Telecommunications Commission (CRTC), could be considered as one way to streamline the process.

B.1.3 Layering of rights

Issue: Whether the Act should be amended to simplify the clearance of multiple rights in a work.

As in most countries, Canada's Copyright Act establishes different rights for different activities. The most fundamental rights include the right to reproduce and the right to communicate to the public by telecommunication. In 1988, the Government of Canada added an exhibition right for artistic works and in 1997 a rental right for sound recording and computer programs. In this era of convergence, a single activity may now implicate a range of different rights. For example, when an artistic work is posted over the Internet, reproduction, communication and perhaps the exhibition rights may apply. The net effect is that multiple clearances and payments may be required. This issue becomes even more complex because existing rights holders are potentially adversely affected with the introduction of additional rights, and because different collectives manage different rights and any associated remuneration.

B.1.4 Unlocatable copyright owners

Issue: Whether section 77 of the Act should be amended to address the scope of application of the in absentia licence for the material of copyright owners who cannot be located.

The Copyright Board may license the material of rights holders who cannot be located in order to facilitate access to such material. There are concerns that the in absentia licensing process for unlocatable copyright owners has overburdened the resources of the Copyright Board, and that improvements to the process are needed. At the same time, in absentia licensing applies only to published works or published performances and sound recordings. Consideration could be given to whether the in absentia license should be extended to unpublished material. Unpublished material, especially archival material, may also be of public interest.

B.2 Limitations and Exceptions

B.2.1 Administration of justice

Issue: Whether the Act should be amended to extend exceptions to satisfy the interests of the justice system.

Lawyers, litigants and the general public do not have specific exceptions in the Act that would allow them to copy the legal material that they need in their interactions with the justice system. Pursuant to collective licensing, many provincial law societies, law libraries and law firms copy legal material upon payment of a fee. The Government of Canada also issued an order in 1997 allowing anyone to reproduce federal legislation and federal tribunal and court judgements.65 Following a recent court decision66 that indicated exceptions should not be construed narrowly, it could be inferred that fair dealing may apply to such uses.

Exceptions for the administration of justice exist in the copyright laws of the U.K.,67 Australia68 and many other Commonwealth jurisdictions. Such an exception would likely constitute a fair use in the U.S.69

B.2.2 Computer programs

Issue: Whether section 30.6 of the Act should be amended to extend exceptions concerning computer programs.

The Copyright Act was amended in 1988 to provide limited exceptions with respect to computer programs, such as for the making of a single copy of a program for back-up purposes. There are no exceptions, however, for activities that have become common practice since that time, such as reverse engineering, debugging and ensuring the interoperability of computer programs across different computer operating systems or platforms.

In the U.S., there is a limited exception with respect to the use of a particular program on a particular computer.70 General research on computer programs (including reverse engineering) falls under the U.S. fair use provision, which specifically acknowledges that research may constitute fair use.71 The EU directive allows for "error correction" and de-compilation for purposes of achieving interoperability.72 In Australia, certain additional exceptions apply with respect to computer programs, including exceptions for the creation of interoperable products, error correction and security testing.73

B.2.3 Contractual limitations on exceptions and uses

Issue:Whether the Act should be amended to provide that statutory exceptions should not be nullified or limited by terms contained in licensing agreements.

The Act provides for specific exceptions for certain users in certain contexts. A number of stakeholders have been concerned that exceptions permitting certain uses of copyright material are effectively undermined by the terms of use found in standard-form contractual agreements, such as so-called "shrink-wrap" licences that accompany software. With this type of licence, the act of removing the wrap or cover signals the agreement of the user to the terms of use. This standard-form contract would thereby override the statutory exceptions in the Act. There is a corresponding concern that such standard-form contracts can also be used to extend the scope of protection beyond what is contemplated in the Act.

The U.K. has a provision in its Act that prevents an educational exception from being limited by contractual agreement.74 In the U.S., this matter is addressed at the state level.

B.2.4 Ephemeral recording exception

Issue: Whether section 30.9 of the Act should be amended to extend the ephemeral recording exception.

Under the Act, licensed broadcasters may make temporary copies of sound recordings to facilitate programming. Such recordings are permitted because they are considered technically necessary to carry out a broadcasting operation. The Act, however, provides that the exception will not be available if there is a collective licensing system in place. Broadcasters have argued that rights holders are already compensated for the communication to the public of their material, and that the exception should exist without regard to the existence of collective licensing. In addition, some have argued that the exception should be extended to independent audio Web-casters, who would not normally be licensed by the CRTC.75

B.2.5 Exceptions for individuals with perceptual disabilities

Issue: Whether section 32 of the Act should be amended to extend the current exception concerning individuals with perceptual disabilities to address new technologies.

New technologies provide individuals with perceptual disabilities with increased access to works. However, the current exceptions in the Copyright Act for individuals with perceptual disabilities exclude activities and new technologies such as closed captioning of audiovisual works, audio description of audiovisual works for the visually impaired, and software that can read books for visually impaired individuals. The impact of technological advancements on current exceptions should be considered.

B.2.6 Exceptions for libraries, archives and museums

Issue: Whether section 30.1 of the Act should be amended to adapt existing exceptions for non-profit libraries, archives and museums to address new technologies, or to extend such exceptions to certain for-profit libraries, archives and museums.

The exceptions currently available to non-profit libraries, archives and museums may need to be revisited to assess how effectively they support public policy objectives regarding access to copyright material that is collected and managed by these institutions. One specific issue in this area is whether the exceptions relating to archival material should extend beyond non-profit institutions. Another relates to the need to preserve and manage the collections of libraries, archives and museums. Currently the Act provides for the preservation of copies of material in obsolete format, but these non-profit institutions seek the ability to make copies in an alternate format in anticipation of the current format or technology becoming obsolete.

Finally, as is the case for educational institutions, current educational exceptions may not address activities undertaken by these institutions in the digital environment. As a result of the increasing use of digital technology in libraries, archives and museums, the present exceptions in the Act should be examined to consider whether they need to be adapted to new technology and the digital environment.

B.2.7 Exceptions for non-profit educational institutions

Issue: Whether sections 29.4 to 29.9 of the Act should be amended to extend the exception for educational use to certain freely available material on the Internet.

Educational institutions currently rely on both analogue and digital technology to deliver programs to their students. The Copyright Act provides educational institutions with a number of specific exceptions. Many of these exceptions do not apply, however, when information and communications technologies are used to overcome the physical limitations of the classroom or provide access to modern instructional media. Educators feel that learning institutions risk copyright liability for commonplace activities in the classroom involving use of the Internet. They are seeking a broad exception for the use of any material "freely available" on the Internet that is used in an educational setting.

In May 1999, the U.S. Copyright Office76 recommended that certain amendments be made to the U.S. copyright law to facilitate distance education. A bill addressing these issues has passed the Senate and is before the House of Representatives.77 In the EU, member states may develop their own frameworks for technology-enhanced learning and may enact exceptions or limitations to the reproduction right for non-commercial educational purposes, including distance learning.78

Access to copyright material for educational purposes can also be achieved via compulsory licensing. Australia extended existing educational statutory licences to the digital environment so that an educational institution does not infringe copyright if reasonable amounts of copyrighted electronic material are copied and communicated to staff and students (e.g. via a closed-circuit television system or intranet) and equitable remuneration is paid. Larger amounts of electronic material may be copied and communicated if the material cannot be obtained within a reasonable time at an ordinary commercial price by the staff or students.79

B.2.8 Fair dealing

Issue: Whether sections 29 and 29.1 of the Act should be amended to expand the scope of fair dealing to ensure that it does not exclude activities that are socially beneficial and that cause little prejudice to rights holders' ability to exploit their works and other subject matter.

Fair dealing is a defence to copyright infringement for certain activities. It currently only comprises reproduction for the purposes of research or private study, criticism, review or news reporting. In the U.S., the corresponding concept of "fair use" is much broader.80 U.S. courts have not limited fair use to particular categories of use and have relied on the doctrine to allow activities such as parody and the recording by private individuals of television and radio programming for time-shifting purposes.81 The EU allows member states to provide for exceptions or limitations that allow fair use for the purpose of caricature, parody or pastiche,82 for copying for time-shifting purposes and for private use on condition that the rights holders receive fair compensation.83 Australia and the U.K. permit free time-shifting for private use.84

A related issue concerns the fact that it is not considered "fair dealing" if the user fails to acknowledge sources in a criticism, review or news report.85 In practice, a complete acknowledgment of sources can be lengthy and cumbersome since they could include not only an author, but also a performer, sound recording maker or broadcaster.

B.2.9 Performance of an audiovisual work on the premises of an educational institution

Issue:Whether section 29.5 of the Act should be amended to allow the showing of films and videos, in addition to performances of other works on the premises of an educational institution.

Despite the fact that an important source of educational material can be found among audiovisual works, including audiovisual works that are part of a multimedia work, this material cannot be performed for educational purposes on the premises of an educational institution without the authorization of the rights holder. The issue is whether the current exception, which allows for performances of a play, live music, the playing of a CD or tape and the watching of a television program on the premises of an educational institution for educational purposes should be extended to allow for the showing of films and videos.

B.3 A Special Regime for Music: Private Copying

Issue: Whether sections 79 to 88 of the Act should be amended to address adverse effects on stakeholders from the application of the private copying regime in a digital environment.

The private copying regime, introduced by Bill C-32, provides for an exception that permits the making of a copy of a musical sound recording for the private use of the person making the copy. It also provides for a levy to be paid by manufacturers and importers of blank audio recording media. Tariffs on blank audio recording media are set by the Copyright Board and are payable to the Canadian Private Copying Collective (CPCC), which is a consortium of collective societies representing eligible authors, sound recording makers and performers. The CPCC then distributes the money to these collectives for the benefit of their members.

The regime was introduced because unauthorized copying of sound recordings by individuals was resulting in significant economic losses to rights holders. Many countries, including the U.S., France and Germany, have developed similar collective remuneration schemes to compensate rights holders, typically through the imposition of a levy on blank audio recording media or equipment.86

The Act provides an exemption to the levy where the blank audio recording medium is used on behalf of persons with a perceptual disability. The current provisions, however, give neither the Government of Canada nor the Copyright Board the power to exempt particular classes of users from the payment of the levies. The CPCC has been voluntarily operating a "zero-rating scheme," however, which effectively provides an exemption, subject to certain conditions, in favour of certain classes of persons who do not use the media for copying recorded music.

Since the introduction of the private copying regime, significant technological changes have occurred. Audiocassettes are nearly obsolete and Canadians are turning to CD-Rs, DVDs, MP3 flash card technologies and the Internet for the purposes of peer-to-peer file sharing. What exactly constitutes private copying in this environment remains unclear.

As a result, a number of issues have been raised with respect to the application of the private copying regime.

  • The levies are payable even on media that are ultimately sold to users who do not use them to copy music. Stakeholders in the high tech sector who, for example, use CD-Rs for storing data, computer programs or other digital products, have pointed out that the levies applicable to digital recording media amount to cross-subsidization and add substantially to their costs, in turn affecting their competitiveness. There is a concern that a grey or black market in recording media may emerge as a result. The administrative difficulties in tracking use and preventing abuse of blank audio recording media make it difficult to provide a broad exemption based on consumer use. Consideration could be given to redefining the scope of application or how the "zero-rating scheme" could be incorporated into the Act. The U.S. excludes from the definition of "digital audio recording medium" any medium that is primarily used to record "audiovisual works or non-musical literary works" such as computer programs or databases.87
  • Many Canadians currently use video cassettes to tape television programming. Some stakeholders have as a result suggested expanding the private copying regime to other works, including audiovisual works.
  • The private copying exception arguably allows private copying from all sources, including unauthorized sources, as long as the copy is made onto an audio recording medium. It has been suggested that the exception be narrowed to specify that it applies only to copies made from authorized sources. The normal copyright remedies would then apply to copies made from unauthorized sources.
  • The question arises as to whether the private copying regime is consistent with the requirements of the WPPT. The exception for private copying currently applies to all performances and sound recordings, but only Canadian sound recording makers and performers (or makers and performers from other countries on a reciprocal basis) are entitled to receive payment from the levy. When Canada ratifies the WPPT, it may be necessary to amend the Act, either by narrowing the scope of the exception in section 80 or by paying royalties from the levy to sound recording makers and performers from all WPPT countries on a national treatment basis. National treatment means that Canada would give sound recording makers and performers in WPPT countries all the benefits that Canadians are entitled to receive under the Canadian private copying regime, regardless of whether they have such a regime in their domestic law.
  • The levy applies to blank recording media that are imported or manufactured for sale in Canada, but does not apply to importers who import the blank media for their own use. Some stakeholders argue that this creates another incentive for a grey market for blank media, affecting the Canadian suppliers' market and the rights holders' remuneration. The issue is whether all importers should be subject to the levy for all imports, not merely for those they sell in Canada. Some stakeholders have also argued that retailers should be liable when they knowingly or negligently sell blank media for which their respective supplier or importer has not paid the required levy.
  • Since sound recordings may now be protected by anti-copying technologies that may prevent the making of private copies, there may be a need to assess whether recordings protected by such technologies ought to be excluded from the private copying regime.

64 Connection, Community, Content: The Challenge of the Information Highway, supra, note 13, p. 119

65 Reproduction of Federal Law Order, supra, note 21.

66 CCH Canadian Ltd. v. Law Society of Upper Canada, [2002] F.C.J. No. 690, at para. 126 (F.C.A.).

67 The U.K. Act, supra, note 17, ss. 45-50.

68 Copyright Act 1968 (Aus.), supra, note 19, s. 182A.

69 17 U.S.C. § 107, supra, note 36.

70 17 U.S.C. § 1201(f) supra, note 36, establishes a limited reverse engineering exception for computer programs.

71 17 U.S.C. § 107, supra, note 36; Sega Enterprises Ltd. v. Accolade Inc., 977 F.2d 1510 (9th Cir. 1992)

72 EC, Council Directive 91/250/EEC of 14of 19 May 1991 on the legal protection of computer programs, O.J. L 122/42, arts. 5(1), 6, on-line: The European Commission. (http://europa.eu.int/smartapi/cgi/sga_doc? smartapi!celexapi!prod!CELEXnumdoc&lg=en&numdoc=31991L0250&model=guichett).

73 Copyright Act 1968 (Aus.), supra, note 19, ss. 47D, 47E, 47F.

74 The U.K. Act, supra, note 17, s. 36(4).

75 The Canadian Radio-television and Telecommunications Commission, "Exemption Order for New Media Broadcasting Undertakings" (Public NoticeCRTC 1999-197) on-line: CRTC (http://www.crtc.gc.ca/archive/ENG/Notices/1999/PB99-197.HTM).

76 The United States Copyright Office, Report on Copyright and Digital Distance Education (Washington: Copyright Office, 1999), on-line: (http://www.copyright.gov/docs/de_rprt.pdf).

77 Technology, Education and Copyright Harmonization Act of 2001, on-line: The Library of Congress (http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=107_cong_bills&docid=f:s487rfh.txt.pdf).

78 EC, Council Directive 2001/29, supra, note 34, recitals 34, 42 and arts. 5(2)(c), 5(3)(a).

79 Copyright Act 1968 (Aus.), supra, note 19, ss. 135ZMB, 135ZMD. The Digital Agenda Act came into force in March 2001.

80 17 U.S.C. § 107, supra, note 36.

81 Time shifting in this context refers to the technologically enabled ability of a domestic user to record a TV program for viewing once only, but at a later and more convenient time.

82 EC, Council Directive 2001/29, supra, note 34, art. 5(3)(k).

83 EC, Council Directive 2001/29, supra, note 34, art. 5(2)(a).

84 Copyright Act 1968 (Aus.), supra, note 19, s. 111; the U.K. Act, s. 70, supra, note 17.

85 Article 10 of the Berne Convention, supra, note 6, has certain requirements with respect to naming the source and the author of a work. On-line: WIPO (http://www.wipo.int/clea/docs/en/wo/wo001en.htm#P142_25795).

86 In the U.S. see: supra, note 36, 17 U.S.C. § 1004; in France see the French Code, supra, note 18; see also the EC, Council Directive 2001/29, supra, note 34, art. 5(2)(b). In Germany see the Law Dealing with Copyright and Related Rights (Copyright Law), art. 54.

87 17 U.S.C. § 1001, supra, note 36.

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