Government Statement on Proposals for Copyright Reform

The Ministers of Industry and Canadian Heritage are pleased to announce on behalf of the Government of Canada that the drafting of amendments to the Copyright Act to address the challenges and opportunities of the Internet is underway with a view to introducing a bill in Parliament later this Spring. This Statement sets out the proposed amendments that will be contained in the bill.

Background

The Copyright Act (the Act) is an important marketplace framework law and cultural policy instrument that supports creativity and innovation. Many sectors of the economy, for example, those dealing with arts and culture, communications and broadcasting, education and research, either rely on or are affected by copyright. One of the public policy principles underlying the Act is the need to maintain an appropriate balance between the rights of copyright owners and the needs of intermediaries and users. Another is that the Act be drafted, to the extent possible, in technologically neutral terms; the Act should be adaptable to technological innovations and other changes that arise in the cultural, legal and economic environments.

In October 2002, Supporting Culture and Innovation: Report on the Provisions and Operation of the Copyright Act (the Section 92 Report) was tabled in Parliament on behalf of the Minister of Industry, as required by section 92 of the Act. The Section 92 Report set out an agenda for addressing copyright issues over the short, medium and long terms. The first group of issues, for short-term resolution, focuses on adapting the Act to address the challenges and opportunities of the Internet.

The rapid evolution of digital network technology, notably the Internet, has compelled a re-examination of the operation of the Act. Significant improvements in speed and bandwidth in particular have permitted the Internet to become an efficient and relatively low-cost platform for creating and disseminating all types of copyright material, regardless of their size or format (e.g., software, music, film). One consequence of this development has been the advent of peer-to-peer file-sharing mechanisms which has made it possible to share copyright material at little or no cost, often without the authorization of rights holders. At the same time, the ability to use high-quality Internet services in the educational and research context is important for Canada's future economic success and in promoting Canada's cultural presence in the world.

Though the Act has proven adaptable to changing technologies, there is uncertainty as to how some of its aspects apply in the Internet environment. Rights holders seek clarity in terms of the scope of their existing rights and the adequacy of their protection on-line. Users and intermediaries face uncertain copyright liability for some of their activities. Many of the provisions of the Act relating to educators and researchers did not contemplate uses in an Internet environment. Moreover, not all collective societies and rights holders have been able to adapt their business models to deal with the Internet and provide access efficiently and at reasonable cost.

In these circumstances, rights holders, Internet intermediaries and users have all pressed the Government to update and clarify the copyright framework. Following extensive consultation and consideration, and taking into account the Interim Report on Copyright Reform of the Standing Committee on Canadian Heritage and the views of stakeholders who appeared before it, the Government proposes that the Act be amended as follows.

WIPO Treaties Issues

The bill will propose the implementation of a number of copyright protections required by two World Intellectual Property Organization treaties (the WIPO Treaties) concluded in 1996 to address the Internet: the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT). These changes would provide rights holders with greater confidence to exploit the Internet as a medium for the dissemination of their material and provide consumers with a greater choice of legitimate material. The changes would also provide stronger remedies against the misuse of the Internet for disseminating material which infringes copyright.

Proposed Amendments:

• In conformity with the WIPO, the existing exclusive communication right of authors would be clarified to include the making available right. In conformity with the WPPT, sound recording makers and performers would be provided the right to control the making available of their material on the Internet.
• In conformity with the WIPO and WPPT, the circumvention, for infringing purposes, of technological measures (TPM) applied to copyright material would itself constitute an infringement of copyright. Copyright would also be infringed by persons who, for infringing purposes, enable or facilitate circumvention or who, without authorization, distribute copyright material from which TPM have been removed. It would not be legal to circumvent, without authorization, a TPM applied to a sound recording, notwithstanding the exception for private copying.
• In conformity with the WIPO and WPPT, the alteration or removal of rights management information (RMI) embedded in copyright material, when done to further or conceal infringement, would itself constitute an infringement of copyright. Copyright would also be infringed by persons who, for infringing purposes, enable or facilitate alteration or removal or who, without authorization, distribute copyright material from which RMI has been altered or removed.
• In conformity with the WIPO and WPPT, rights holders would be provided with the ability to control the first distribution of their material in tangible form.
• In conformity with the WPPT, performers would be provided with moral rights in their fixed and live performances, consistent with the moral rights already provided to authors in relation to their works.
• In conformity with the WPPT, a reproduction right for performers in sound recordings would be introduced.
• In conformity with the WPPT, the term of protection provided to sound recording makers in respect of their sound recordings would be adjusted (i.e., fifty years from publication, in most cases). The term of protection provided to performers in respect of their recorded performances would be adjusted to mirror the term in the sound recording itself.

Internet Service Provider Liability

The bill will propose that Internet service providers (ISPs) be exempt from copyright liability in relation to their activities solely as intermediaries. This would clarify the liability of ISPs in a manner that helps to ensure that they can continue to provide Canadians with high-quality Internet services at low cost. At the same time, the bill will propose that ISPs be required to play a role in curbing the misuse of their facilities for copyright infringement. In this context, ISP refers to any entity, commercial or otherwise, that provides digital network services to subscribers or clients.

Proposed Amendments:

• ISPs would be exempt from copyright liability in relation to their activities as intermediaries, namely, their activities as mere conduits for information, their caching activities, their hosting activities, and their information location activities.
• A “notice and notice” regime in relation to the hosting and file sharing activities of an ISP's subscribers would be provided for. That is, when an ISP receives notice from a rights holder that one of its subscribers is allegedly hosting or sharing infringing material, the ISP would be required to forward the notice to the subscriber. Blocking access to such material would be required only when ordered by a court. Upon receipt of a notice, ISPs would also be required to keep a record of relevant information for a specified time. Rights holders would have the legal means to compel ISPs to comply with the regime. The Government would have the power to prescribe the form that must be used in giving notices and to set fees that may be required to be paid by rights holders to ISPs for processing such notices.

Educational and Research Access Issues

The Government supports the use of leading-edge technologies in education and research. The bill will propose certain measures that will facilitate the use of the Internet for these purposes.

Use of Copyright Works for Remote Learning

Amendments would permit educational institutions to use network technologies such as the Internet to deliver classroom instruction and material to students remotely, without incurring additional copyright liability.

Proposed Amendments:

• Current educational exceptions permit the performance or display, within the classroom, of certain copyright material as part of a lecture. The requirement that the performance or display be confined to the classroom would be removed to enable remote students to view the lecture using network technology, either live or at a more convenient time. Educational institutions would be required to adopt reasonable safeguards to prevent misuse of the copyright material.
• Material that may be photocopied and provided to students pursuant to an educational institution's blanket licence with a collective society would also be permitted to be delivered to the students electronically without additional copyright liability, unless the licence in question provides for such delivery. Educational institutions would be required to adopt effective safeguards to prevent misuse of the copyright material.

Interlibrary Loans

The Act currently permits, as part of an inter-library loan, the reproduction of certain copyright material (notably academic articles), provided, among other things, that the requesting patron receives only a paper copy.

Proposed Amendment:

• The electronic desktop delivery of certain copyright material directly to the patron would be permitted, provided that effective safeguards were in place to prevent the misuse of the material or of the inter-library loan service.

Photography Issues

The bill will propose changes to harmonize the treatment of photographers with other creators in terms of authorship and copyright ownership. This would remove impediments on the ability of photographers to commercialize stock photography commissioned by commercial entities such as news services and advertising agencies. At the same time, the interests of consumers in the use of photographs commissioned for domestic purposes (e.g., wedding photos) would be protected.

Proposed Amendments:

• In all cases, the photographer would be considered the author of his or her photograph.
• In all cases, the term of protection for photographic works would be the life of the author plus fifty years.
• First ownership of copyright in commissioned photographs would now rest with the photographer, but an individual that commissions a photograph for personal or domestic purposes would, subject to an agreement to the contrary, be able to make personal and non-commercial uses of that photograph.

Educational Use of Publicly Available Internet Material

The Government recognizes that the Internet has become an important resource for students and teachers to conduct education-related activities. Internet material is often downloaded, reproduced or transmitted to students and teachers for the purposes of assignments, lessons and research. Use of Internet material in the classroom setting may trigger copyright liability, however. Educators seek an exception from copyright liability for use for educational purposes of Internet material which is "publicly available" (generally understood to be material in respect of which the rights holder does not seek compensation for use). However, there is disagreement as to what material on the Internet is to be considered as "publicly available" and which uses are to be permitted. Rights holders also want to encourage use of the Internet in an educational context, but to do so through licensing approaches. The challenge is how to ensure a copyright framework that will facilitate Internet use in the classroom in a manner that will not unreasonably impair the rights of copyright owners.

This is a complex and contentious issue. The Government believes that it requires further public input and consideration, including with respect to the implications of recent copyright decisions by the courts (notably the recent Supreme Court of Canada decision regarding fair dealing, CCH v. Law Society of Upper Canada). Accordingly, the bill will not address this issue. Instead, the Government will release a consultation paper on the issue as soon as possible after introducing the bill.

Private Copying

Even as the bill addressing the short-term issues identified in the Section 92 Report is readied for introduction, the Government is preparing to consult on certain priority medium-term issues. Foremost among these is private copying. The Act's private copying regime provides for an exception to copyright that permits the making of a copy of a sound recording for private use. It also provides for a levy to be paid by manufacturers and importers of blank audio recording media.

Questions have been raised regarding Canada's ability to ratify the WPPT in the absence of changes to the private copying regime. In this context and in light of Internet-related developments which have challenged the private copying regime since its introduction in 1997 (including in the courts), the Government proposes to release a consultation paper on this issue as soon as possible after introducing the bill.

Work on other medium-term issues identified in the Section 92 Report, including the matter of reproductions made by broadcasters (“transfer of medium”), will also intensify with a view to later consultations.

Conclusion

The Government intends to introduce a bill to amend the Copyright Act later this spring. It will seek to ensure throughout the legislative process that the proposed amendments benefit from a consideration of the full range of cultural and economic perspectives that should be reflected in modern copyright law. The result should be a Copyright Act that addresses the Internet in a manner that appropriately balances the rights of copyright owners to control and benefit from the use of their creative works with the needs of users to have reasonable access to those works.