Bill C-60: Copyright Bill 2005

Bill C-60 is An Act to Amend the Copyright Act. It is a proposed law introduced in June, 2005, which, if passed into law, would substantially alter Canada's Copyright Act. The Bill would delete current rights of Canadians to access and use copyright works and add numerous new and stronger rights for copyright holders.   The Bill addresses the following general subject areas: ISP liability, remote learning, interlibrary loans, and photography issues. The bill also addresses a number of WIPO Treaties implementation issues, including legal protection for technological protection measures (TPMs) and rights management information (RMI) (which are component parts of digital rights management (DRM) systems), a making available right, a first distribution right, moral rights and reproduction rights for performers, and term of protection for sound recordings and photographs.

The WIPO Copyright Treaty ("WCT") and the WIPO Performances and Phonograms Treaty ("WPPT") contain both broad and specific requirements for countries wishing to ratify the treaties. In general terms, Canada would need to address the following issues in order to comply with the treaties:  

• Provide a "making available right" to authors, sound recording makers and performers, in relation to making their work available on the Internet;
• Provide "adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors [or performers or producers of phonograms] in connection with the exercise of their rights ... and that restrict acts, in respect of their works, which are not authorized by the authors [or performers or producers] concerned or permitted by law."
• Provide "adequate and effective legal remedies against" persons who remove remove or alter RMI without authority, or who distribute copies of works knowing that RMI has been removed or altered;
• Provide rights holders with control over the first distribution of their works in tangible form;
• Provide performers with moral rights in fixed and live performances;
• Provide performers in sound recordings with a reproduction right;
• Provide a term of protection for sound recording makers of 50 years from publication in most cases; and
• Provide a term of protection for performers in sound recordings equivalent to the term in the sound recording itself.

"TPM" is short for "technological protection measures". The term "technological measures" is used in the WIPO Treaties to describe any technology that is used by authors or others "in connection with the exercise of their rights..." under copyright. To qualify as a TPM, a technology must restrict unauthorized or illegal acts in relation to the copyright works or performances. TPMs function to control access to works, use of works, or both. They include technologies ranging from simple password protections to complex cryptographic protections and copy-control protections. TPMs can be combined and added to other technologies to form sophisticated DRM systems.   In Bill C-60, TPMs are defined as "any technology, device or component that, in the ordinary course of its operation, restricts the doing - in respect of a material form of a work, a performer's performance fixed in a sound recording or a sound recording - of any act that is mentioned in section 3, 15 or 18 or that could constitute an infringement of any applicable moral rights".

Bill C-60 does not expressly prohibit the circumvention of TPMs. However, it provides that copyright owners and other rights holders have remedies against circumvention of TPMs in three situations.  

• First, Bill C-60 provides that copyright owners and other rights holders are entitled to remedies (including damages and an injunction) against any person who "circumvents, removes or in any way renders ineffective a technological measure protecting any material form of the work, the performer's performance or the sound recording" for the purpose of infringing copyright or moral rights.
• Second, the Bill provides the same remedies against any person who "offers or provides a service to circumvent, remove or render ineffective a technological measure... and knows or ought to know that providing the service will result in an infringement of the copyright or moral rights."
• Third, the Bill provides the same remedies against any person who "knows or ought to know that [a TPM] has been removed or rendered ineffective and, without the owner's or holder's consent, does any of the following acts with respect to the material form in question: (a) sells it or rents it out; (b) distributes it to such an extent as to prejudicially affect the owner of the copyright; (c) by way of trade, distributes it, exposes or offers it for sale or rental or exhibits it in public; or (d) imports it into Canada for the purpose of doing anything referred to in any of paragraphs (a) to (c)."

Circumvention for the purposes of making private copies of sound recordings is not permitted under Bill C-60. In other words, the private copying exemption does not allow individuals to circumvent TPMs in order to exercise their right to make a private copy of a sound recording. This effectively erases the private copying right for the increasing number of sound recordings that are protected by TPMs.

"RMI" is short for "rights management information". RMI is defined in the WPPT as: "...information which identifies the work, the author of the work, the owner of any right in the work, or information about the terms and conditions of use of the work, and any numbers or codes that represent such information, when any of these items of information is attached to a copy of a work or appears in connection with the communication of a work to the public."   Bill C-60 similarly defines RMI as follows: "information that (a) is attached to or embodied in a material form of a work, a performer's performance fixed in a sound recording or a sound recording, or appears in connection with its communication to the public by telecommunication, and (b) identifies or permits the identification of the work or its author, the performance or its performer, the sound recording or its maker or any of them, or concerns the terms or conditions of its use" [emphasis added].

As with the protection for TPMs, the Bill does not state that removal or alteration of RMI is an infringement of copyright. Instead, the Bill provides rights holders with remedies "against a person who, without the consent of the copyright owner, knowingly removes or alters any rights management information in electronic form that is attached to or embodied in any material form of the work, the performer's performance or the sound recording or appears in connection with its communication to the public by telecommunication and knows, or ought to know, that the removal or alteration will facilitate or conceal any infringement of the owner's copyright."   The Bill also provides the same remedies for rights holders against any person who knowingly does any of the following acts and "knows or ought to know that the rights management information has been removed or altered" as described above: "(a) sells it or rents it out; (b) distributes it to such an extent as to prejudicially affect the owner of the copyright; (c) by way of trade, distributes it, exposes or offers it for sale or rental or exhibits it in public; (d) imports it into Canada for the purpose of doing anything referred to in any of paragraphs (a) to (c); or (e) communicates it to the public by telecommunication."  

Bill C-60 exempts ISPs from liability for copyright infringement in relation to their activities as intermediaries for communications or for their caching and other activities aimed at making communications more efficient. In order to quality for the efficiency and caching exemption, however, network providers must meet three conditions: (a) they must not modify the content; (b) they must respect any limitations established by the person who posted the content, provided that those limitations can be implemented automatically and (c) they must not prevent or interfere with lawful access to usage data related to the content at issue.   Bill C-60 also provides limited immunity for ISPs regarding content that they allow others to store on their systems (i.e., hosted content). However, this exemption does not apply where the ISP has "actual knowledge of a decision of a court of competent jurisdiction to the effect that the other person who has stored a work or other subject-matter, or a reproduction of it, infringes copyright by so storing it or by the way in which the thing so stored."

Bill C-60 does not require ISPs to take down content or terminate subscriber on the basis of a mere allegation of infringement received from a copyright holder. ISPs are only required to take down content pursuant to a court order.   However, Bill C-60 does require ISPs to abide by a notice-and-notice system. This means that when a copyright holder send a notice to an ISP complaining about infringement by an ISP's subscriber, the ISP must forward the notice to the subscriber. This requirement only applies when the ISP provides either connectivity or hosting services related to the alleged infringement. The notice from the copyright holder must be in writing and in general terms must (1) provide the claimant's name and address, (2) identify the work at issue and the claimant's interest in it, (3) specify the relevant location data, and (4) specify the claimed infringement as well as its time and date. ISPs who fail to send the notice to their subscriber are subject to a maximum damage award of $5,000.   The Bill does not impose a penalty against a claimant that files a wrongful notice.

At first glance, Bill C-60 appears not to require or encourage ISPs to monitor the activities of their subscribers. However, under the notice-and-notice system described above ISPs who receive notices must not only forward them to their subscribers, but also retain records for six months that will allow the identity of the person to whom the electronic location belongs to be determined. If the copyright holder commences legal proceedings against the subscriber, then the ISP must retain identity data about the subscriber for a year. ISPs who fail to retain subscriber data as required by the Bill could be liable for statutory damages of up to $10,000.

Bill C-60 targets Internet search engines - or "information location tool providers" as they are called in the Bill - in certain ways. For example, the notice-and-notice system described above for ISPs also allows notices to be sent to search engines.   Further, where a search engine is alleged to have committed infringement as a result of caching, the copyright owner is limited in remedy to an injunction - search engines are not liable in damages for caching but can be compelled to remove content from their cache or to stop caching infringing content. In order to qualify for limitation of liability, the search engine must (a) cache automatically and for the purpose of providing the information location service, (b) not modify the work, (c) comply with any conditions relating to caching established by the person who made the content available, (d) not interfere with lawful access to usage data, and (e) not have received a notice under the notice-and-notice system. In effect, this exemption for search engines establishes a notice-and-takedown system - in response to notices regarding caching infringing content, most risk-averse search engines will simply remove infringing content.

Security researchers will be adversely affected by Bill C-60 because "circumvention" is often the essence of their research. Researchers need to understand security weaknesses in order to address threats. Although in theory most researchers would not be liable for circumvention because they are not doing it for an infringing purpose, in practice the threat of possible law suits could have a significant chill on security researchers.

Bill C-60 provides performers with and number of specific rights in their fixed and live performances and creates a reproduction right for sound recording performers. Performers are also provided with moral rights akin to authors' moral rights. The Bill also adjusts the term of protection provided to sound recording makers and performers to fifty years from publication of the sound recording.

Bill C-60 differs from the DMCA in a number of subtle but substantial ways. For example, while Bill C-60 targets only the act of circumvention (and circumvention "services"), the DMCA targets makers and distributors of circumvention devices. The DMCA has had a chill on technological innovation because of it's targeting of devices. In another area, Bill C-60 only targets circumvention in cases where it is done for the purpose of infringing copyright. The DMCA, on the other hand, prohibits circumvention outright, without regard to whether an infringement took place or was intended in relation to the protected work.   In the area of ISP liability, Bill C-60 uses a notice-and-notice system and a specific data retention system to address ISPs' responsibilities in relation to the infringing activities of their subscribers. The DMCA goes much further and requires ISPs to remove content on the basis of notices from copyright owners (a notice-and-takedown system) in order to be exempt from liability for infringement.

The WIPO Copyright Treaty ("WCT") effectively repeals subsection 7(4) of the Berne Convention, which had provided that the minimum term of protection of a photographic work would be for a period ending twenty-five years from the making of the photograph. Under current Canadian law, copyright in photographs owned at first instance by corporations is a flat fifty years from the end of the year of the making of the photograph. Bill C-60 repeals this provision, leaving photographs in Canada with the standard term of protection offered under the Berne Convention: the life of the author plus fifty years from the end of the year of the author's death.   This is perhaps the most egregious term extension in Canadian copyright history: corporations "earn" a term extension - at the public's expense - simply because they are corporations.

Today, we consumers own copyright in photographs we commission - our wedding photos, our babies' first photographs, our portraits. Bill C-60 changes that. Under the Bill, photographers will own copyright in these photographs. Anyone who commissions photographs will have to bargain for copyright.   Why the change? The present Act treats photographers differently than other authors. The author of most works is the first owner of copyright. Commissioned photographs and portraits are an exception to that rule. the government wants to "fix" that by "harmonizing" the treatment of authors under the Act. "Harmonization" makes good sense in the context of corporate and commercial commissionings - why shouldn't corporations have to bargain for copyright? They are very well placed to look after their own interests and have plenty of bargaining power. However, the rule makes no sense in the consumer context. First, in contrast to corporate commissionings, consumers don't have a great deal of bargaining power - particularly when faced with standard form contracts - and generally don't know anything about copyright, much less that they have to change the contract to retain it. Second, the rule runs contrary to good consumer protection policy, which ordinarily puts the obligation to raise an issue and bargain for it on the party best placed to protect its own interests. Photographers are well placed to look after their own interests here - they don't need the government's protection from consumers.   Under the present law, photographers suffer no hardship in having to ask their customers for copyright in commissioned photographs. The market is not failing, and we suffer from no shortage of photographers willing to take on commissioned photographs. If the Bill becomes law, photographers will benefit by never mentioning copyright, by lying in the weeds. That is not good policy nor good law. The government suggests it is "harmonizing" the treatment of photographers with other authors under the Act. That sounds fine, but in fact it's irrelevant. "Harmonization" is a solution without a problem. The issue isn't how the law treats photographers versus poets - they don't have anything to do with one another! The issue is how the law treats photographers versus their customers. Bill C-60 strips consumers rights and hands them to photographers. Now that, we suggest, is a problem.

Bill C-60 proposes to transfer ownership of copyright in consumer commissioned photographs - our wedding photos, baby photos, etc. - from the consumer to the photographer. Copyright includes, among other things, the right to copy, to publish, and to publicly display. Taking these rights away from consumers might cause surprise and alarm among consumers who suddenly discover that it is illegal to digitize and share their baby photos. The Bill responds to this concern by giving consumers the right to use commissioned photographs for "personal purposes". Under this proposal, consumers will be able to make copies of their private photographs for their friends and family, to modify and touch up those photographs, and to post them online - provided all such dealings are for "personal purposes".   Consumers will not be able to use their photographs for any non-personal purposes that might infringe copyright - including publishing a personal photograph in the newspaper, using a photograph for a home business, or displaying the photograph publicly, such as at a school or community centre.   Possibly the nastiest element of the proposal is that "personal use" right is waivable. As if losing their copyrights were not enough, Bill C-60 will still require consumers to read the fine print on all of those standard form contracts.

Another thing that a consumer won't be able to do is to control a photographer's use of private photographs in ways the consumer doesn't like. The government has suggested that Canada's privacy laws address the issue of public use of private photos. But Canada's privacy laws are an uneven patchwork that only imperfectly addresses privacy concerns. First, PIPEDA, our federal privacy law, only applies to commercial uses of photographs. PIPEDA leaves non-commercial uses completely unregulated. Second, even in respect of commercial uses, PIPEDA exempts "artistic" dealings from the Act entirely - en enormous hole compromising consumers' ability to control public uses of private image. Third, although provincial privacy laws have the potential to cover non-commercial uses, at present only three provinces have legislated in the area. Fourth, these laws aren't true privacy laws. Rather, they regulate uses of "personal information". There are all sorts of photographic subjects which are private - your home, your grounds, the settings for family evens such as weddings - but do not qualify for protection under the laws because they don't meet the definition of "personal information". Bill C-60 does not respect Canadians' privacy interests.

Like any other natural resource - begging for a good plundering. The public domain comprises all of those works of authorship whose copyrights have expired, or that do not qualify for copyright protection in the first place. The very point of copyright is to fill up the public domain by offering limited incentives to the creation of work. Note those two key characteristics of copyright: (1) it is an incentive, to encourage the creation of new works; and (2) it is limited - in scope, in reach, and in time - so that all new works of Canada's authors eventually join those of Shakespeare, Dickens, Leacock, and Montgomery in the public domain.   Bill C-60 continues a long tradition of Canadian governments slicing up the public domain - our common heritage - for private gain. This time, sound recording makers and performers get term extension, moving from the current term of remainder of the calendar year of fixation plus 50 years, to remainder of calendar year of publication plus fifty years. This may potentially double the term of some works. The worst of a bad bunch of term extensions goes to corporate photograph owners. Currently, where a corporation is the first owner of copyright in a photo, the copyright term lasts the remainder of the calendar year of creation plus fifty years. Bill C-60 extends this term to the life of the author of the photograph plus fifty years. Believe it or not, corporations get this gift because they are corporations. This is a straight transfer out of the public domain and our common heritage into the hands of corporations.   What do we all get in return for our government's generosity? Absolutely nothing. This term extension will not result in one additional photograph being taken, record pressed or song performed.

Bill C-60 offers two new rights to the use community:  

1. an educational use of materials for distance education purposes, and
2. digital interlibrary loan.

However, the conditions and restrictions Bill C-60 imposes on these rights sharply limits their usefulness.

Bill C-60 gives educational institutions the right to use a work, performance or sound recording in a lesson, test, or examination, to communicate it to students over the Internet, and to record the lesson, performance or sound recording for that purpose.   Bill C-60 also proposes to extend current photocopying blanket licenses to cover electronic delivery of those same works until such time as collectives explicitly license electronic delivery.

Bill C-60 allows libraries to deliver digital copies of material requested via interlibrary loan.

Bill C-60 places some startling restrictions on these public institutions.   Bill C-60 requires libraries to become digital rights management experts by taking "measures that can reasonably be expected to prevent the making of any reproduction of the copy other than a single printing, its communication, or its use for a period of more than seven days." This is mild compared to Bill C-60's treatment of educational institutions under the distance learning right. The Bill requires educators to:  

1. use the distance learning lesson only for the course for which it was created;
2. destroy the lesson within 30 days of the end of that course;
3. implement measures to restrict lesson access to only students of the course;
4. implement measures to prevent further use of the lesson by students after the course has ended;
5. implement measures to restrict further distribution of the lesson by students;
6. keep records documenting: the making of each lesson, the course in which it was made, the date it was made, and the date it was destroyed; and
7. take measures prescribed by regulation.

Bill C-60 is a missed opportunity. In the s. 92 Report, Supporting Culture and Innovation, Industry Canada and the Department of Canadian Heritage jointly highlighted "access and educational use" as short-term issues to be addressed in this, the first of what promises to be several rounds of copyright revision. The education licensing of the Internet proposal being temporarily shelved, the government's commitment to access issues amounts to a crippled distance learning provision and an electronic interlibrary loan provision that requires libraries to become DRM specialists. The list of pressing access issues not addressed in Bill C-60 is a long one:  

• Reform of the statutory damages provisions. Statutory damages continue to inappropriately apply to our public institutions and to file-sharing defendants in perversely disproportionate ways.
• Reform of fair dealing: fair dealing continues to rely on a narrow categorization approach with uncertain application. Parody, reverse engineering and research, time-shifting and media-shifting, transformative works, and other valuable uses of copyright protected content continue to function in Canada only under the shadow of copyright infringement.
• Standard form licenses casting aside the copyright balance: Standard form licensing agreements routinely require Canadians to abandon their rights, including their right to deal fairly with a work or comment publicly on it, in exchange for access to the work. This trend will only accelerate with the advent of ubiquitous DRM and TPM. This is not good policy.
• Internet radio: while alternative radio thrives in the US under a workable licensing scheme, Canada falls behind.
• Crown copyright: Canadians continue to lack access rights to works they have paid for through taxpayer dollars.
• The digital library: Canada has the opportunity to become the first nation in the world to make its cultural heritage universally available online.
• The public domain: Our government pays no attention to access issues associated with public domain works.

We can only hope that future governments will pay more attention to Canadians' rights in copyright-protected content.

The Heritage Committee Interim Report on Copyright Reform of March 2004 included a recommendation that a mandatory licensing scheme be applied to Internet material used for educational purposes. This recommendation was met with mixed reviews publicly and profound consternation on behalf of researchers and education communities generally. Armed with recent decisions of the Supreme Court of Canada like CCH v. Law Society of Upper Canada, many of these educational communities have been willing to voice objections to the introduction of any compulsory Internet licensing scheme in the Canadian educational environment. The primary source for these objections has been the contentious issue of defining what resources are in the public domain, and what default approach should be adopted to ensure that holders of copyright are compensated.   Any compulsory licensing scheme will open the public coffers to a blanket levy where, consequently, users viewing only publicly available works subsidize users displaying protected works. Many critics have therefore called for a special exception for educational users, possibly as a newly defined class under the fair dealing exceptions in the Copyright Act. These critics argue that, with appropriate and prescribed limitations, a new fair dealing exception could strike a workable balance between appropriate compensation for rights holders and access to online information in an educational environment. Indeed, many of the works that the educational communities would be required to pay for under the new mandatory licensing scheme have been publicly funded and produced by scholars and researchers in those communities.   This surprisingly vocal, grassroots lobby campaign by the educational communities (surprising because of the communities' track record of employing defensive approaches to potential copyright liability), has forced the Government to take a second look at the recommendations of the Heritage Committee report. The March 2005 Government Statement on Proposals for Copyright Reform by Heritage Canada explains that because the issue is more complex and contentious than it once believed, the educational licensing scheme was left out of the bill, and a consultation paper will soon follow.

Bill C-60 was introduced by the Liberal minority government in the House of Commons. The bill has undergone First Reading in the House, which means the bill has been read, without debate, and printed for public circulation. When Parliament resumes in the autumn, the bill will likely go through the legislative process as follows:  

• Second Reading: At Second Reading, the government debates and either accepts or rejects the principle and object of a bill.
• Committee Stage: A committee examines the bill clause-by-clause, hears witnesses, and submits a report. That report either recommends passage of the bill with or without amendments, or that the bill be stopped there. This is the stage where stakeholders can exert the most influence. Bills may be referred to committee after either first or second reading; however, if referred after second reading, members may make only minor amendments at the Report State. If referred after First Reading, members may introduce new provisions to the bill.
• Report Stage: House members may move for amendments. They debate the bill further, and then vote.
• Third Reading: The bill is debated a final time and voted on.
• Message Stage: Once passed, the bill is sent to the Senate, where the process is very similar.
  • The Senate rarely vetoes a bill that passes third reading in the House (though it is possible). If the Senate recommends any amendments to the bill, notice is given to the House, and they must vote on the proposed amendments.
• Royal Assent: When the bill passes through all of the previous stages, the Senate asks the Governor General or a deputy to give it Royal Assent. The bill is then proclaimed in force.

If an election is called before Bill C-60 receives Royal Assent, the bill effectively dies and must be resubmitted in the next Parliamentary session. For example, if the bill is sitting in Committee stage and the government calls a snap election, the bill can no longer be considered and any new Copyright bill must be reintroduced in the next Parliament. Bills that pass Third Reading of the House and Senate usually receive Royal Assent expeditiously before a Parliamentary session is about to end upon the calling of an election.

Contact the Ministers of Industry and of Canadian Heritage regarding your views about Bill C-60 and copyright reform. As well, try contacting your local M.P. in order to express your concerns as a member of the public. It would also be a good idea to speak with your local school board in order to discuss these important issues with another concerned party.

Sections 79 to 99 of the Copyright Act provide that making a private copy of a musical sound recording for personal use on a CD and certain other media is legal, because Canadians pay hidden levies on the recording media themselves. Canadians must pay the levy even when they use products like CDs to simply store photos, data and other digital files, rather than copy music. The private copying levy also captures those who have purchased several CD's, and combine them on a single compilation disc for personal use. This unfairly penalizes Canadian consumers, small business owners and independent musical artists to the tune of tens of millions of dollars every year, and often results in double-compensation.   Although all songwriters and composers, regardless of their nationality, are entitled to collect from the levy, so-called 'neighbouring' rights holders, such as sound recording makers and performers, must be Canadian in order to be eligible for compensation. The WIPO Performances and Phonograms Treaty ("WPPT") requires national treatment for foreign stakeholders. In other words, if the treaty is implemented in Canada, we cannot extend greater rights and protections to Canadians than we do to foreigners. There is much concern that in order for Canada to implement the WPPT, fundamental changes to our private copying regime are necessary.   The Heritage Committee dismissed this issue in an interim report on copyright reform in May 2004 (Bulte Report). The Standing Committee on Canadian Heritage concluded that the private copying levy does not prevent Canada from implementing the WIPO treaty. Furthermore, in its March 2005 Government Statement on Proposals for Copyright Reform, Heritage Canada reaffirmed this conclusion, and explained that a consultation paper would follow shortly after the introduction of Bill C-60. Heritage did not conclude that the existing levy would not to be amended; rather, it concluded that implementation of the WPPT should not be forestalled while consultations on the issue are still in progress. It is difficult to understand how the current formulation of the levy would not have to be changed in order to satisfy the national treatment requirement in the WPPT. Heritage has clearly taken the stance that we should implement the treaty now, and deal with the consequences as they arise. This approach is unfortunate given the importance of this issue to the overall copyright regime in Canada.

The consultation paper and response submissions, referred to in question 25, will form the basis of the analysis of the private copying regime as a whole. However, the bill introduces some new specific limitations on what can be done with copies made under the private copying system. Bill C-60 makes it an infringement to knowingly sell, rent, trade, distribute or communicate copies made for private use under Section 80(1). The bill does not alter the right to make a personal copy (including a P2P download) but does set some tough limits on what users are entitled to do with those copies. For example: Section 27(2.1) makes it an infringement of the reproduction right to knowingly sell, rent, trade, distribute, communicate or perform a work that was made legally as a private copy under the Copyright Act. In other words, so long as downloads via P2P are for personal use, and not redistributed, there will be no infringement.