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Internet Copyright Law

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Discussion of current state of Internet copyright law in Canada.

Discussion of current state of Internet copyright law in Canada.

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  • 1. Internet Copyright Mark S. Hayes Blake, Cassels & Graydon LLP The Business of Copyright McGill University, Montreal August 13, 2008
  • 2. Internet Copyright
    • Several common questions since Internet-based copyright use became common in mid-1990s
      • Does copyright law apply?
      • What rights are being infringed?
      • Where does infringement take place?
      • Who should be responsible for infringement?
      • How much should be paid for Internet rights?
  • 3. Copyright Basics
    • Is work subject to copyright?
    • Who owns the copyright?
    • Is the copyright divided, jointly held, collectively administered?
    • Can I get the necessary licences to use the work online?
    • Will one of the exclusive rights be infringed if I don’t?
    • Can I rely on one of the exemptions or “user rights” in the Copyright Act?
    • Most of these topics addressed in other sessions
  • 4. Early Developments
    • “Cyberspace Is Not A No-Law Land” – 1997
      • offline copyright law can apply to online copyright law
    • Copyright Board Tariff 22 – 1999 (and subsequent appeals)
      • ISPs are not responsible for communicating copyright works over their systems; caching and subsequent transmission not a new communication
      • infringement takes place anywhere there is a “real and substantial connection” with Canada
        • problematic in licensing context
  • 5. Recent Developments
    • More Copyright Board tariff decisions and appeals
    • Other cases relevant to online copyright liability
    • Bill C-61 – latest effort at copyright reform
    • Deal with each of these and then examine application to user-generated content sites
  • 6. Copyright Board and Appeals
    • Ring Tones (Tariff 24)
      • Copyright Board - August 2006
      • Federal Court of Appeal - January 9, 2008
    • CSI Online Music Services – March, 2007
    • Tariff 22 Phase II – October, 2007
  • 7. Ring Tones – Tariff 24
    • Problem created by separate reproduction and communication rights
      • historically separate
      • reproduction right concerned with creation of physical copies (books, CDs, DVDs)
      • public performance (pre-1990) and communication (post-1990) mainly related to broadcasting
    • Internet and other telecommunications channels conflated these rights
      • is delivery of a copy of a work by telecommunications a reproduction, a communication or both?
  • 8. Ring Tones – Tariff 24
    • Ring tones present classic case
      • small music file being sold for installation on phone
      • use of telecommunications a delivery method, not part of exploitation of work
      • really a reproduction accomplished using telecommunication
      • reproduction right already directly licensed
      • should wireless provider have to pay again for communication right?
  • 9. Ring Tones – Copyright Board
    • Agreed that transaction was primarily a reproduction
      • however, Copyright Act requires payment when a communication is made by telecommunication
      • relevant only to tariff rate, not liability
    • Result - communication right is not an electronic substitute for pre-1990 performance right
    • Copyright owners entitled to additional royalty for transportation of work by telecommunication
  • 10. Ring Tones – Fed. Ct. Appeal
    • January, 2008
    • Fairly mechanical analysis
    • Communication takes place when copy of work is received, even if recipient doesn’t listen to it immediately
    • Fact that transmission is primarily a reproduction not relevant
    • Simultaneous transmissions not necessary for a “communication to the public”
  • 11. Does This Make Sense?
    • Enumeration of rights in section 3 of Copyright Act intended to set out different exclusive acts that copyright owners control
    • All of these acts are intended to be exploitations of the work, not control over how the work is disseminated or transported
    • Why should reproduction of a work over a wire be any different from reproduction using another digital medium?
    • Mainly a problem for music, since copyright is historically divided into many pieces with different owners
  • 12. Some Implications
    • Licensees of copyright works must ensure that they obtain all necessary rights
      • for electronic distribution, must obtain licence to communicate to the public
      • note most US licences refer only to “public performance” rights; may not be equivalent to Canadian communication right
    • Will additional payment be required for the new “making available” right in Bill C-61?
  • 13. CSI Online Music Services
    • Aimed at services like iTunes, Puretracks, etc.
    • Reproduction rights for underlying musical works
      • services already had licensed reproduction of recording from record companies
    • Board found appropriate proxy market was reproduction of works on CDs
    • Very little legal analysis as reproduction right is straightforward – valuation was key issue
    • Rates set provided basis for Tariff 22 rates
  • 14. Tariff 22 – Phase II
    • Phase II was to establish rates for Tariff 22 tariff
    • As a result of SCC decision in Phase I, claim against ISPs abandoned
      • SOCAN split tariff into many parts to target all different online uses
      • largely a mirror of multiple offline tariffs
    • In this decision, Board dealt only with online music services governed by CSI Tariff
      • tariff for other uses (including streaming) yet to come
  • 15. Tariff 22 – Phase II
    • “ Internet transmissions are not just another form of delivery, for the simple reason that paragraph 3(1)( f ) of the Act specifically targets communications by telecommunication . While the notion of telecommunication itself must be interpreted in a way that takes account of technological developments, any attempt to compare delivery of music online with delivery of music on physical media is inherently flawed from a copyright perspective. Sending a music file over the Internet is protected by the Act ; sending a music CD in the mail is not .”
  • 16. Tariff 22 – Phase II
    • Previews
      • online services allow users to sample parts of a song before purchasing
    • Board found this activity is fair dealing for research purposes and thus not infringement
    • May be applicable to other activities, such as providing samples of books or other works
  • 17. Tariff 22 – Phase II
    • Extra-jurisdictional reach
    • SCC left Copyright Board with a problem
      • “real and substantial connection” test useful in infringement cases, but impossible to apply to licensing such as tariffs
      • “The problem with [this test] is that it requires looking at each communication individually to determine if the connection to Canada is sufficiently strong for the communication to happen “here”. In practice, this is impossible to do. As a result, we will have to resort to rough approximations to determine what is included in the tariff and what is not.”
  • 18. Tariff 22 – Phase II
    • Retroactivity
      • Tariff 22 first proposed in 1996 as a fee for providing Internet access
      • Board decided that wording of original tariffs was broad enough that it would include the specific activities now being targeted
      • “SOCAN undertook not to pursue small users retroactively. SOCAN will however claim royalties from large users starting in 1996. Each situation will be looked at on a case by case basis by SOCAN. Common sense and economics will prevail .”
  • 19. Other Cases
    • Jurisdictional rule created by SCC in Tariff 22 creating problems outside of tariff cases
    • Disney v. Click Enterprises (Ont., April 2006)
      • Canadian web site streaming copyright movies
      • plaintiffs obtained default judgment in NY
      • moved to enforce in Ontario
      • “real and substantial connection” to NY since Click “utilized the Internet to enter the United States to carry out its activities”
      • use of US payment processor also important
  • 20. Other Cases
    • Contrast Desjean v. Intermix (F.C.A., Nov. 2007)
      • proposed class action based on allegation that defendant had delivered spyware to customers
      • although Intermix delivered software to computers in Canada, this was not sufficient to establish jurisdiction
      • F.C.: “it would be manifestly unfair to subject Intermix to this Court’s jurisdiction since it would, in effect, mean a U.S.‑based operator of a Web site, with no business assets in Canada and no physical presence in the jurisdiction, could be sued in this country as well as in any other country from which a plaintiff might choose to download its products.”
  • 21. Other Cases
    • eBay v. M.N.R. (F.C., Sept. 2007)
      • information about eBay PowerSellers stored on servers located in US
      • eBay Canada was not owner of information, but had access to information in normal course of business
      • information had to be produced to M.N.R.
    • Internet jurisdictional issues still far from clear
      • SCC’s test deliberately vague
      • good for courts; bad for business
  • 22. Copyright Reform – Bill C-61
    • Although billed as dealing with online issues, changes deal as much with offline issues as with the Internet
      • “Making available” right
      • Digital format changes by consumers
      • Educational use of Internet material
      • ISPs and server operators; “notice and notice”
      • Statutory damages limited to $500
      • Technological protection measures (TPMs)
      • “Information location tools”
  • 23. “Making Available” Right
    • Both WIPO Copyright Treaty (WCT) and Performances and Phonograms Treaty (WPPT) require granting of “exclusive right of authorizing any communication to the public ..., including the making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chosen by them”
    • C-61 revises Sections 15 and 18 to grant right “to communicate ... to the public by telecommunication in a way that allows a member of the public to access it from a place and at a time individually chosen by that member of the public”
  • 24. “Making Available” Right
    • This “making available” right granted only to performers and sound recording owners
    • Already in place in respect of other works?
    • Implications:
      • not clear if “making available” is infringement of other works, such as audiovisual works
      • “making available” appears to be related to communication right; will additional royalty be required in addition to communication and reproduction royalty?
  • 25. Digital Format Changes
    • Individuals permitted to make certain format changes, but only to limited categories of works and in specific non-commercial situations
      • s. 29.21: book, newspaper, periodical or videocassette
      • s. 29.22: musical work embodied in a sound recording
      • not non-musical sound recording
    • Must own non-infringing original
    • Cannot have circumvented TPM
    • If copy was downloaded from Internet, then any contract entered into prevails over any format changing right
      • unusual provision, to say the least
  • 26. Educational Use Of Internet Material
    • Section 30.04 allows educational institutions to make use of material available on the Internet for educational purposes
    • Must give credit
    • Cannot use if protected by TPM or “a clearly visible notice”
  • 27. ISPs And Server Operators
    • Section 31.1 codifies much of SCC’s decision in Tariff 22
      • Provision of access in itself not infringement
      • Caching in itself not infringement
      • Provision of digital memory not in itself infringement unless operator has notice of decision that content is infringing
    • Solving a problem that does not exist?
  • 28. “Information Location Tools”
    • Search engines and other providers of information location tools not liable for damages, but can be subject to injunction
    • Immunity lost if:
      • searches not automatic
      • work is modified
      • any automated caching restrictions are not followed
      • operator interferes with lawful gathering of use statistics
    • Solving a problem that does not exist?
      • US cases have already found implied licence for search engines where site operator does not block crawling
  • 29. “Notice And Notice”
    • ISPs, storage providers and search engines must pass along any “notice of claimed infringement” to customers
    • Failure to do so does not result in loss of immunity from infringement, but could lead to statutory damages of up to $10,000
  • 30. Statutory Damages
    • For individuals, limited to $500 for all infringements of the plaintiff’s works by an individual
      • infringement must have been for private purposes
      • individual can’t have circumvented TPM
    • Will significantly reduce possibility of actions against consumers as has been seen in the US
  • 31. TPMs
    • Too complex to deal with in detail here
    • Important to note 2 types of TPMs:
      • access TPMs
      • infringement TPMs
    • Only infringement to circumvent an access TPM
      • copyright owner cannot elect statutory damages
    • Cannot provide service, technology or device that circumvents either type of TPM
    • Limited exceptions
  • 32. Bill C-61
    • Unclear whether legislation will be enacted due to minority Parliament
    • Many lawyers and users taking a “wait and see” approach
    • Reaction to proposed changes has been fairly muted
      • opposition may not force major changes this time
    • Still much lobbying to be done!
  • 33. User Generated Content
    • UGC not a new concept
      • bulletin boards in 1990s were similar in some ways
    • Many factors have increased level of concern:
      • increased bandwidth
      • improved compression
      • new technologies for presenting web sites
      • new ways to connect users
  • 34. Types of UGC
    • Text-related
      • reviews and rants
    • Wikis
      • collaborative web site collecting factual information
    • Social networking sites
      • in purest form, little copyright material
    • Folksonomies
    • Link exchanges
      • have been some controversies about “deep links”, but generally do not create copyright issues
  • 35. Types of UGC (2)
    • Collaborative creation
      • sometimes online collaboration used to create offline content
    • Submission contests
      • may be used to create marketing material and other commercial content
    • Games and online worlds
    • File exchanges
  • 36. Copyright Issues Involving UGC
    • Does content enjoy copyright protection?
      • content must original enough to qualify for copyright protection
      • much of blogosphere might not qualify
    • Ownership
    • Infringement
    • Defences or exemptions
    • Strategies for UGC site owners
  • 37. UGC Ownership
    • Often ownership of UGC is quite complex
      • owned by poster
      • owned by poster and third party
      • adapted from third party content
      • owned entirely by third party
    • Single item may have many copyright components with differing ownership
      • performers and authors may not know actual ownership situation
    • Often “mashups” of content from multiple sources encouraged by site operator
  • 38. Infringement
    • Submission and posting of UGC will infringe a number of rights
      • reproduction
      • communication
      • public performance
      • making available
      • broadcasting
  • 39. Defences or Exceptions
    • “Fair dealing” or “fair use”
      • applicable to both poster and site operator
      • extent of defence varies widely by jurisdiction
      • may limit ability to rely on defence if no geographic limitation on site access
    • Innocent hoster
      • again varies widely by jurisdiction
      • generally must not know content infringes and must not take active role in posting
  • 40. Defences or Exceptions
    • Notice and take down; notice and notice
      • many jurisdictions require that “innocent” hosters take down infringing content upon receipt of a notice from copyright holder
      • details vary between jurisdictions
      • DMCA procedure used by many sites, but may not protect site operator in other jurisdictions
      • re-posting of infringing UGC
  • 41. Standardization
    • “ Principles for User Generated Content”
      • published October 2007 by coalition of media companies and UGC sites
    • Number of obligations on UGC site operators
      • Content identification technology
      • assist in locating infringing content
      • take down content on receipt of a notice from copyright owner
    • In return, UGC site operators would not be sued and Copyright Owners would “accommodate fair use”
    • Principles widely criticized as biased towards excessive control by copyright owners
  • 42. Standardization
    • Some issues
      • lack of consultation with user groups
      • technology focus makes compliance difficult for smaller UGC sites
    • Too soon to tell if Standards will become de facto industry requirement
      • note that Google is using technology to prevent infringement even though not subscribing to Principles
  • 43. Some Site Operator Strategies
    • Terms and conditions
    • Notice and takedown
    • Licensing and rights clearance
    • Stay below the radar
  • 44. Basic Terms and Conditions
    • Restrictions on use and penalties for breach
      • most common penalty is withdrawal of posting right
      • difficult to enforce if users anonymous
      • may never actually want to use penalties
      • usually intended to short-circuit argument that infringement is condoned
    • Warranty about content ownership
    • Licence to use content as required by UGC site (don’t forget future requirements)
  • 45. Terms and Conditions
    • Must decide whether to use click-through agreement or merely post terms
      • as in other situations, depends on whether positive terms need to be imposed
    • Be careful of over-reaching
      • e.g. some sites try to get warranty that content will not infringe any possible use anywhere in the world
    • Possible use of Creative Commons licences
  • 46. Bare Licences
    • “Bare licence” without consideration revocable in many jurisdictions, including Canada
    • Terms on many sites say that licence of content is irrevocable
      • Wikipedia approach: just sue us
    • Better approach?
      • allow revocation on notice but reserve right to use for archival and related purposes
      • e.g. Facebook
  • 47. Notice and Takedown
    • DMCA requires very specific procedure
      • site operator cannot rely on defence unless it follows procedure
      • copyright owner cannot sue non-responsive site operator unless it follows procedure
    • However, DMCA only applies in US
      • following DMCA procedure may not work in other jurisdictions
      • e.g. if copyright owner does not follow DMCA procedure, site operator can ignore notice; notice may nevertheless be valid in other jurisdictions
      • also, site operator may be liable to poster in non-US jurisdictions if content removed under DMCA procedure
  • 48. Licensing and Rights Clearance
    • Big problems licensing UGC
      • site operator doesn’t know who owns it
      • poster often doesn’t know who owns it
    • Three choices
      • get very broad licence from all big copyright owner groups
      • license specific content and only allow UGC based on it
      • create own content for use by posters
    • Specific content licence not practical for most applications, but……
  • 49.  
  • 50. Licensing and Rights Clearance
    • One option is to get very wide licence to try to cover everything users will submit
    • For example, YouTube has struck licence deals with:
      • CBS
      • NBC
      • Universal Music
      • Sony/BMG
      • Warner Music
      • EMI
      • CBC
      • UK music collectives
  • 51. Licensing and Rights Clearance
    • YouTube likely has not cleared all necessary rights, even for mainstream music and videos
      • producer or record company does not hold all rights
      • many rights holders not represented by large companies
    • In any event, only very large sites have option of obtaining wide licence
      • copyright owners not interested in small fish
      • control activities through enforcement, not licensing
  • 52. Stay Below The Radar
    • Big copyright owners generally don’t care about small UGC sites
    • If no-one has heard of site, unlikely to face enforcement actions
    • Staying small and unnoticed not part of most site operator’s business plan
  • 53. Future of UGC and Copyright
    • Current copyright regime presupposes centralized production, financing and distribution of copyright content
    • Development of decentralized and diffuse UGC doesn’t fit too well into this model
    • Will copyright bend to UGC or will use of UGC have to become copyright-compliant?
    • TPM situation points to latter but copyright interests are very entrenched
  • 54. Conclusion
    • “Public” Internet is only about 15 years old
    • Business models still in flux
    • Copyright is slowly adapting to Internet realities, but many developments are still in the future
    • Still very limited case law
    • Flexibility and creativity still a part of dealing with Internet copyright issues
    • Answers today may not be the same tomorrow!
  • 55. Questions?
    • [email_address]