Digital Media - Technology Clearly Outpaces the Law 



June 4, 2008

Canadians generally like to think of themselves as law-abiding citizens, but thanks to antiquated copyright laws, most would be surprised to learn that they break the law almost daily.  Nearly 80% of online Canadian households use broadband Internet access and other technical innovations such as "iPods" and personal video recorders to gain "on demand" access to books, movies, music, and television.  However, while there has been a revolution in digital content technology, there has been stagnation in Canadian law regarding its use.

Even putting aside the pervasive issue of flagrant unauthorized Internet file-sharing, the following commonplace activities are technically infringements under the Copyright Act:

  • "ripping" legally-purchased music or movies to a computer hard drive;
  • transferring copyrighted music from a cassette, record or CD to an MP3 player;
  • recording a television programme to a VCR, DVD recorder or personal video recorder (PVR); and
  • creating a backup copy of a movie or video.

In the United States, these types of activities (but not file-sharing) would fall under the general exception to infringement known as "fair use". Over the years, U.S. courts have expanded fair use to cover the private activities for which digital media players are sold: recording material for later use (time-shifting), transforming material from one medium to another (format-shifting) and remotely using material at locations other than where it is stored (place-shifting).

Canada's version of fair use is called "fair dealing", which permits some copying for research, study, criticism, review or reporting.  The legality of Canada's digital media players thus rests on the Act's "private copying" exemption, which essentially permits some copying while taxing blank media to compensate content creators.

However, the private copying regime suffers from two fatal flaws in this context:

  • first, it only applies to audio recordings, meaning that it cannot be used for videos, television or books; and
  • second, it only applies when the copying is made to "blank audio recording media" prescribed by regulation, which includes blank audiotapes and recordable CDs, but not recordable DVDs, hard drives, MP3 players or memory cards. 

A 2008 Federal Court of Appeal case confirmed the limited application of private copying by quashing the Copyright Board of Canada's attempt to apply the private copying levy to MP3 players, up to $75 per device. This decision was celebrated by retailers, but commentators noted that it confirms that everyday uses of digital media devices are infringing.

The current Copyright Act fails to recognize the realities of new technologies, such as digital media devices and the Internet.  Even worse, the disconnect between law and technology is likely stifling Canadian innovation and technology. For example, the "TiVo" PVR, launched in the U.S. in 1997, was delayed for nearly ten years. Some of this delay was attributed to legal concerns. In addition, a recent CRTC submission from the Canadian Association of Broadcasters indicates that companies are reluctant to introduce new technologies such as networked PVRs because "rightsholders would pursue an action against a large corporate entity that launched" such a service based on Canada's lack of a "fair use" doctrine.

Clearly, Canadian copyright law needs an update. In fact, as a signatory to various World Intellectual Property Organization (WIPO) treaties, Canada has already agreed with the international community to modernize its intellectual property laws.  However, it is increasingly apparent that the update needs to be a balanced one. 

For example, in the U.S., the fair use doctrine has been largely sidestepped by content creators through the US Digital Millennium Copyright Act (DMCA). These provisions prevent consumers from breaking digital locks (also known as DRM) placed on content.  This means that if a CD or DVD has copy protection, fair use does not apply.  Interestingly, content producers have begun to move away from DRM, a shift in ideology likely predicated upon the reality that piracy continues unabated once the DRM is broken while paying consumers struggle with DRM's complexities, technical requirements and restrictions—in effect, making the pirated version of a copy-protected work "better" than the original.

In December 2007, the Federal government attempted to introduce new copyright legislation that, by all indications, contained DMCA-style anti-circumvention provisions without much balancing of consumer rights.  Massive public uproar arose—some 40,000 people joined a Facebook group called "Fair Copyright for Canada" to mobilize opposition to the legislation. There was even a large protest at Industry Minister Jim Prentice's annual constituency luncheon.  The introduction of this legislation was pushed out from December 2007 and is expected in the summer of 2008, presenting the government with an extended opportunity to revise and develop a balanced, Canadian solution addressing many concerns:

  • What will happen with the private copying regime, which has distributed over $100 million to Canadian rights-holders?  Should it be expanded to movies, computer programs or books to compensate rights-holders?
  • How will it address illegitimate Internet file-sharing, which undeniably deprives copyright holders of revenue?
  • How will it implement Canada's WIPO obligations, such as providing "adequate legal protection and effective legal remedies against the circumvention of effective" DRM?
  • How will it protect users' "fair dealing", private copying, and potentially even "fair use" rights that Canadians expect?

While this author would not presume to know the perfect legislative solution (a general exception for private, personal and non-commercial infringement seems reasonable enough), it is clear that copyright reforms are of primary importance to Canadian consumers and businesses. Copyright laws must adapt to the technologies of today and tomorrow.  In the very least, Canadians should be able to legally enjoy their MP3 players and VCRs.