Monday, March 13, 2006

Notes: Digital Copyright Reform in Canada: an International Perspective

Here are my notes from the "Digital Copyright Reform in Canada: an International Perspective" colloquium at the University of Toronto Centre for Innovation Law and Policy, Friday March 3 2006.

•Sunny Handa, co-chair gave intro
-there are socio-economic forces influencing copyright law; international factors are the most important (though maybe not in the USA)
-history / Berne convention
-after 1971 it became almost impossible to update copyright internationally - paralysis set in as more rights were added in and as copyright became more and more important
-US was late getting on board

Michael Einhorn - Consultant with Consor Intellectual Assets Management
•is aware of an opposition to copyright in the US and Canada
•let's get the facts straight: the big music companies are not American transnationals; they are owned by other countries or integrated multinationals
-record labels don't own radio stations
-the record labels would love to get to consumers outside of radio stations
•retailing has been very competitive - Wal-Marts etc put record stores out of business
•the 4 distributors own more than 40 labels - see RIAA web site - and these distribute over 900 other labels
•the market will sort stuff out
•the old rental services are gone - the market didn't like it when consumers lost their music when the subscription runs out, so those types of services failed
-the market will punish companies who try to lock stuff up too much
•there is also streaming – those services are working ok, and are now being combined with downloading
•they don't make much money on selling the music; they really want to sell you something else: ipods, walkmans, other stuff on Wal-Mart's web site, yahoo's search engine results/advertising
•can there be a mutually beneficial confluence of advertising and entertainment here?
•Einhorn worked in US Justice Dept - competition department
•if you let companies go without paying it's favouring them against others who die
•example of canals and railways - there were a lot of incentives for intermediaries to build hotels tunnels etc; for example:
-electronic recommendation services
-weedshare - here you get music, put it on your web site etc; if your friends buy it you get a cut
-built-in ads in the audio file
•none of this will work if users can do whatever they want with the files

Duncan MacKay, head of Pollara market research
•Pollara has been tracking use of music in Canada for CRIA
•research discussed here is based in 2 telephone surveys , one in 2005 and another in 2006
•more people use "illegal" services
•more files are downloaded when they go to "illegal" sites than legal ones
•paid stuff is used more by older age groups
-the group 12-24 does most of the buying and also most of the illegal downloading
•most is top 40
•frequency has stayed about the same or increased from a year ago
•the main reason people are buying less is that they are downloading
•average 170 files on mp3 player; 500 on computer
•1/3 is own cds ripped, 1/3 from illegal sites

Douglas Hyatt, Rotman School of Management
•worked advancing copyright tariffs before copyright board as an economist
•worked in Ukraine during transition to market based economy in the '90s
-there was no private property, so when jobs were lost in a region there was no way that people could sell their property and move to a new place
•blank media levy legitimizes stealing - this is one school of thought
-Hyatt would like to hear Einhorn talk about that
•DOJ in US will look at record companies for price fixing - this is in the news now - almost everything is 99cents - how can you tell what is price-fixing
-would like to hear Einhorn on that too
•the copyright board is pricing rights
-it hurts the music industry not to be able to price their own rights

Einhorn response:
•the last look into price fixing came up with nothing
•there was a real finding on advertised pricing - the companies would help pay music stores for advertising, but there was a minimum price that would be advertised
-this was settled
•DRM allows market rules to be encoded in the files; levy requires a government agency to do allocation

Sunny Handa starts off question period

MacKay of Polaris:
-mentions he is also on the Puretracks board
-responds that 99 cents was the balance of supply and demand that could sustain the business

Dr. Mihaly Fiscor, University of Budapest Hungary
•copyright has become less like a dermatology unit (come back in 8 months) and more like an emergency unit with more urgent emergencies
•copyright has bad PR
•Berne was updated about every 20 years
•Berne can only be ratified unanimously
•Fiscor worked for WIPO as assistant director general?
•TRIPS was there in 1992 but not beiing worked on; after that the Internet exploded
•There were 3 stages of debate
1) John Perry Barlow - copyright is dead
-Internet is another world of complete freedom
-netiquette will be enough
-even if you want to you can't regulate the Internet
2) copyright should contine
3) 1996: stage of synthesis - changes, but no fundamental transformation
•substantively TRIPS didn't do too much - just term extension, clarificationon databases etc
•in the process of applying the principles to the digital world we came up with the making available right
•you need to prevent manufacture, distribution etc - not just the circimvention itself
-protection is needed not just for copying but also for access
-you need some kind of balance and something to monitor the situation

Barry Sookman, McCarthy T├ętrault
•Bill C-60 was completely inadequate to the WIPO treaties
•What is the resistance in Canada?
-they are philosophical, fears of digital lockup, changes to the copyright balance, misinformation about DMCA, fear of para-copyright, privacy concerns
•paints a caricature of the user-rights side and argues that these positions are unreasonable
•C-60 was a disaster - standards of protection were too low

Fiscor to Sookman when Sookman sat down after his presentation, enthusiastically: "great"

Alain Strowal
on the EU InfoSoc Directive:
-prohibits circumvention with knowledge
-prohibits manufacture, sale etc with primary purpose circumvention
-only "effective" TPMs are protected
-fair mechanism to ensure accommodation of exceptions
•C-60 did not prohibit manufacture, sale etc
-there was also no mechanism to ensure accommodation of exceptions
•the exceptions to protection of TPMs are not in the directive but are in recital 48 (research in crypto) and recital 50 (reverse engineering and study)
•also there can be voluntary measures to ensure exceptions can be met (making hard copy available etc), and state encouragement of voluntary measures
•exceptions are in article 5, 2
•how can you combine the levy system with the TPM system? -you can't get paid both ways.
-there should be a phasing-out of levies

Marybeth Peters
•US copyright is based in constitution and legislation
-she has always been a little bit jealous of Europe who see copyright as a natural right
-but then she sees "our system as better"
•has been head 11 years, but worked there 40 years
•copyright office is in legislative branch rather than executive - so she can make statements without clearing it with anyone
•There was no debate in the US on implementing the WIPO treaties
-it was all about ensuring copyright industries could continue in online environment
•it was seen as necessary to cover the manufacture etc
•there was a blank circumvention of access controls item
-this is the one that caused the uproar
-so a compromise was reached
-there was a ban but there are also exceptions for encryption research, libraries etc
-they came up with the 'fail-safe' exception - a rule-making every 3 years - you can petition copyright office for a new exception for 3 years
•Senator Hatch very involved
•intermediary points were made up by industry getting together
•she is now for the system - it keeps copyright owners honest - if they keep stuff too locked up there will be an exception created

Daniel Gervais
•someone looking for policy justifications for copyright, looking back through policy documents, would find a mishmash
•the courts are taking it upon themselves to profess on copyright policy
-we should decide whether that is what we want, and not hide behind the courts
•EFF now says the burden of proof is too great
•copyright was designed to promote contractual relations among professionals, and to prevent professional piracy
-here, we have users and "broadcasters" who are not professional
•users don't seem themselves as stealing - they see creation of social networks
•there was a trend towards continuously increasing rights for patents
-this trend turned when it was countered with other rights – the right to health of patients etc.
-the prices never recovered
•watch that the same thing doesn't happen with copyright
-a clash with privacy rights
•we can't get rid of copyright
-we also can't treat end users like other professionals - there should be some allowance for private uses
-the basic question is which uses should be paid for and by who
•Gervais is in favour of licensing and the 3-step test
•would like to see a legal p2p service - licensed music and a paid service

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