Bill C-32 - An Act to Amend the Copyright Act

July, 2010

After previous proposals to amend the Copyright Act in the last decade failed, Canada has once again put forward another bill, namely Bill C-32, in an attempt to amend the outdated Act.  The Act was last substantially amended in 1997 when the drafters could not have contemplated the various technological developments to follow.  Many sections of the Act do not adequately address how new technology permits users to handle copyrighted works.  In other respects, the Act is simply silent.

After the federal government conducted several cross-country consultations on the proposed amendments to the Act in the summer of 2009, which were very well attended, it now has the onus to propose a draft bill which addresses the missing protections for the creators of copyrighted works and enacts reasonable limitations on the users of copyrighted works.  Below I will address some of the proposed changes to the Act by separating them into two categories: Proposed Changes for Owners/Creators and Proposed Changes for Users.

Proposed Changes for Owners/Creators

Digital Locks (Technological Protection Measures)

The current Act makes no reference to what the Bill refers to as “technological protection measures”.  A technological protection measure, or colloquially a digital lock, means a technology which controls access to a copyrighted work.  In order to address the rapid copying and infringement of copyrighted works,  the creators of these works have sought to prevent those infringing activities by incorporating measures into the mediums on which the copyrighted work resides which seek to prevent any infringing activity.

The Bill prohibits any person from circumventing a technological protection measure, offering services to the public in that regard, or providing the means by which someone can circumvent a technological protection measure.

However, in pursuing damages for the circumvention of a technological protection measure, the owner of the copyrighted work cannot elect to recover statutory damages, which award minimum damage amounts, if the infringer carried out such circumvention for his or her own private use.

The Bill does contain exceptions where one is permitted to get past or provide devices to get past the technological protection measures.  Some of the exceptions permit circumvention for the purposes of: (i) national security; (ii) investigating incidents of infringement; (iii) making computer programs interoperable; (iv) encryption research; and (v) assessing computer and network security.  One may also circumvent a technological protection measure if the copyrighted work is not accompanied by a notice indicating that its use will permit a third party to collect and communicate personal information of the user, or, if such notice is present, the user is not provided with the option to decline to provide his or her personal information without an impact on how the copyrighted work may be used.

This proposed amendment will be the most contentious.  Notably, this amendment does not in fact penalize a user for copyright infringement, but rather for circumventing a digital lock; the Bill makes the aggrieved entitled to all remedies for copyright infringement as a result of the circumvention of the digital lock.

Internet Service Providers (Network Services)

The Bill finally brings clarity and relief for internet service providers, whose services people have been using for years to infringe copyright.  The Bill specifies that the mere act of providing internet related services by which copyrighted works can be transmitted does not by itself infringe any copyright.  Furthermore, it is clearly stated that when internet service providers host and cache copyrighted works copyright is not infringed.

However, the exception does not apply and it is an infringement of copyright where a person provides a service by way of the internet or other digital network, i.e. peer-to-peer file sharing sites, which the persons knows or should have known is designed primarily to enable copyright infringement and infringement occurs.

The Bill also introduces a “notice-and-notice” system.  If a person with rights in a copyrighted work becomes aware that such copyrighted work may have been infringed by way of the internet, it can provide notice to the internet service provider who shall forward such notice to the person who may have infringed copyright.  The internet service provider shall keep a record of the identity of the alleged infringer for a certain period of time which information may be used in the case a lawsuit is filed.  An internet service provider may be subject to fines if it does not carry out its duties to forward the notice and retain records of the alleged infringer.

Engravings, Photographs, Portraits

The lobbying of professionals in the fields of engravings, photographs, and portraits has achieved a victory in the first draft of the Bill.  Presently the Bill proposes to remove a provision whereby persons who commissioned an engraving, photograph, or portrait would be the first owners of the copyright in such works, absent an agreement to the contrary.  Instead, it will be the engraver, photographer, or portrait artist who will own the first copyright in the work they were hired to create.  If this change is implemented, consumers will have to exercise caution when hiring a professional to create an engraving, photograph or portrait.  Consumers will have to make sure they know upfront what rights they have in the work they commissioned.  The Bill currently proposes granting consumers, who commission a photograph or portrait, an exemption to copyright infringement when they use such commissioned work for private or non-commercial purposes, unless the professional and consumer have agreed otherwise.  

Proposed Changes for Users

Exemption for Private Copying of Copyrighted Works (Format Shifting)

There is an exemption where individuals make a reproduction of a copyrighted work, so long as certain conditions are met.

The Bill states that copyright is not infringed where an individual makes a complete or substantial copy (reproduction) of a copyrighted work if the following conditions are true: (i) the reproduction is made from a non-infringing copyrighted work; (ii) the individual legally obtained the copyrighted work from which the reproduction is made, and did not borrow or rent the copyrighted work, and owns the medium on which the reproduction is made; (iii) no technological protection measure was circumvented in order to create the reproduction; (iv) the reproduction is not given away; and (v) the reproduction is used only for private use.

Moreover, there is an important limitation on this exemption.  If the person who makes the reproduction in accordance with the conditions above gives away, rents, or sells the copyrighted work from which the reproduction was made without first destroying any reproduction, then such individual will have infringed copyright in the work.

This is an important amendment to the current Act which will make it legally permissible to copy a digital music file from one’s computer to a portable music player or to copy a video onto a computer.  Users will be concerned that this exemption may be useless if the owners/creators of copyrighted works place technological protection measures on their media.

Exemption for Recording Programs for Later Listening or Viewing (Time Shifting)

Another common practise of users may become non-infringing if the current version of the Bill passes.  Users have commonly recorded copyrighted works, such as television shows or radio programs, ever since the technology became available despite the fact that it infringed copyright.

The Bill grants an exemption where an individual records radio, television, or internet programs, for the purpose of later listening or viewing if certain conditions are met.  Those conditions are: (i) the program is legally obtained; (ii) the individual did not circumvent a technological protection measure in order to make the recording; (iii) only one copy of the program is made; (iv) the recording is kept no longer than is reasonably necessary in order to listen to or view the program at a more convenient time; (v) the recording is not given away; and (vi) the recording is only used for private purposes.  However, this exemption does not apply where a user receives the copyrighted work through on on-demand service, which allows a person to receive works at times of his or her choosing.

Exemption for User Generated Content for Non-Commercial Purposes

The Bill puts forward another exception to copyright infringement which takes account of the modern reality concerning how the public is using copyrighted works.

The Bill says that there will be no copyright infringement when a person uses a copyrighted work, which has been made available to the public, to create a new work capable of protection under the Act and for that person to use the new work or have it distributed if certain conditions are met.  Generally, those conditions are: (i) the use or distribution of the new work is done for non-commercial purposes; (ii) the source of the original work is recognized, if it is reasonable to do so; (iii) the person using the original work reasonably believed the original work did not infringe copyright; and (iv) the use or distribution of the new work does not have a substantially adverse effect on the current or future exploitation of the original work.

This should mean that persons could use copyrighted works, for example, music and videos on the internet, and make new copyrighted works out of them, such as a remixed song, so long as the above conditions are satisfied.  Such an exemption should allow people to exercise their creativity with existing copyrighted works, and bring much of this current infringing activity within the law, while ensuring that the creators of the original copyrighted work are not affected in a substantially adverse way.  If this section becomes law, it would be very interesting to see what the courts would define as use of a new copyrighted work which has a “substantial adverse effect, financial or otherwise” on the exploitation of the original copyrighted work.  Indeed, many remixes and mash-ups of existing songs exceed in popularity the original songs.

Exemption for Fair Dealing

The Bill proposes to expand the fair dealing exemptions under the Act.  Currently, copyright is not infringed if one uses copyrighted works for the purpose of research, private study, criticism, review, or news reporting.  The current draft of the Bill expands the fair dealing exemptions to education, parody, or satire.  This is an important amendment which brings us in line with many other jurisdictions and the courts will certainly be called upon to state what exactly it encompasses, i.e. an exemption for education could be particularly broad.

Exemption for Backup Copies

Users will also be able to make backup copies of copyrighted works.  The Bill states that it is not an infringement of copyright for a person who owns, or has a license to use, a copyrighted work to make a copy (reproduction) of such copyrighted work.  In order for the exemption to apply, the user must be making the copy solely for backup purposes, the original copyrighted work must be legal, no technological protection measure was circumvented in order to make the copy, and the user does not give away any of the backup copies.  In the case the person no longer owns or has a license to use the original copyrighted work, the user must immediately destroy all reproductions made under this exemption.  Again we see the significant role that technological protection measures will play in whether users may take advantage of these exemptions.

Exemption for Educational Institutions

The Bill provides further copyright infringement exemptions to educational institutions in addition to those currently in the Act.

Educational institutions may do the following acts with works available on the internet for the purposes of education and training: (i) reproduce it; (ii) broadcast it over the internet to students; or (iii) perform it in public to students.  These acts would only be exempted from copyright infringement if the source of the copyrighted work is cited, the work was not protected by a technological protection measure, there is no notice prohibiting the use by the educational institution, and the work was not posted on the internet without the owner’s consent.

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Ryan K. Smith is a lawyer and trade-mark agent at Feltmate Delibato Heagle LLP. He specializes in corporate and commercial law with expertise in intellectual property matters including trade-marks, copyrights, privacy, information technology, and confidential information.  You can reach Ryan at rsmith@fdhlawyers.com and (905) 287-2215.