Copyright law: set for an overhaul?

A look at the key recommendations of two recent House of Commons reports concerning Canadian copyright law

Copyright law: set for an overhaul?

This spring, two House of Commons committees recommended changes to Canada’s Copyright Act. The first, the Standing Committee on Canadian Heritage, released May 15, made 22 recommendations; and the report of the Standing Committee on Industry, Science and Technology, released June 3, made 36 recommendations for the Government of Canada.

While some recommendations were anticipated, others were not, and some recommendations didn’t go far enough, sources say.

Here, Canadian Lawyer’s panel of experts weighs in on the reports’ key recommendations.

CHPC Recommendation 6: That the government increase its efforts to combat piracy and enforce copyright.

Under Canada’s current regime, anti-counterfeiting measures enacted at the border are clunky and expensive, says Mark Biernacki, a partner at Smart & Biggar LLP in Toronto. When Canadian customs agents intercept suspect goods at the border, the rights owner must apply to court for an order for destruction within 10 days; if the importer doesn’t respond to the rights holder, the rights holder must file a statement of claim.

“There are other jurisdictions and simplified procedures where if the importer doesn’t respond the goods [are] seized and destroyed,” he says. “That’s better and less expensive; it conserves judicial resources, results in more seizures and makes it more difficult to import counterfeit goods.”

INDU Recommendation 8: That the government introduce legislation amending the Copyright Act to provide creators a non-assignable right to terminate any transfer of an exclusive right no earlier than 25 years after the execution of the transfer, and that this termination right extinguish itself five years after it becomes available, take effect only five years after the creator notifies their intent to exercise the right, and that the notice be subject to registration.

Extending the general term of copyright to 70 years from 50 years from the death of the last living author is necessary under the new Canada-United States-Mexico trade agreement, says Catherine Lovrics, a partner at Bereskin & Parr LLP in Toronto. That agreement requires Canada to modify its intellectual property framework to extend copyright protection to “life plus 70 years.”

Lovrics notes that “the INDU committee recommended that in order to enforce copyright for the next 20 years, the creator needs to register copyright.” Although copyright arises automatically under international treaty, that treaty provides for only a 50-year plus life general term, “and so the Canadian government introducing this registration requirement to enforce copyright in the last 20 years arguably is onside.”

INDU Recommendation 9: That the government consult with provincial and territorial governments, Indigenous groups, and other stakeholders to explore the costs and benefits of implementing a national artist’s resale right, and report on the matter to the House of Commons Standing Committee on Industry, Science and Technology within three years.

An artist’s resale right was recommended in both reports, says Yuri Chumak, partner and cofounder of IP firm Chumak & Company LLP in Toronto. The ARR applies when the artist’s work is sold publicly, e.g., at auction, and would mean the artist would receive additional compensation for the work; it would not affect private sales, he says. “The question is whether this would be even workable or constitutional.”

CHPC report, Recommendation 14: That the government amend subs. 14(1) of the Copyright Act so that it reads “from 25 years after assignment.”

The Copyright Act currently states that authors who assign their rights by contract may only get them back 25 years after their death, when their estate would manage these rights. During consultations before the Heritage committee, Canadian singer and songwriter Bryan Adams proposed that that become a right to terminate all copyright assignment 25 years after the date of assignment, suggesting that the words “death of the author” in article 14 (1) of the act be changed to the word “assignment.”

This recommendation was intended to limit any unfairness that arises from the unequal bargaining position of an artist compared to a producer and align Canada with its international partners.

For the reversionary right to be automatic 25 years after an assignment without any mechanism for exercising that termination right “is huge [and] could disrupt almost any industry, frankly, but largely on the entertainment side,” says Lovrics.

Chumak calls the CHPC recommendations “very artist-friendly.”

INDU Recommendation 14: That the government consider amending the Copyright Act or introducing other legislation to provide clarity around the ownership of a computer-generated work.

Computer-generated work, whether artificial intelligence or other, is a hot topic, says Chumak. “If a tool is created by an author but the machine itself creates the work, who owns the copyright?” But although the committee has recommended that the Copyright Act be amended to provide clarity around ownership, it hasn’t said how that will that be decided: Will the owner be the creator of the tool or will no copyright be assignable?

INDU report, Recommendation 18: That the government introduce legislation amending s. 29 of the Copyright Act to make the list of purposes allowable under the fair dealing exception an illustrative list rather than an exhaustive one.

“Top of mind has to be more fair dealing and ‘illustrative’ rather than ‘exhaustive,’” says Hashim Ghazi, an associate at Deeth Williams Wall LLP in Toronto.

Fair dealing is a limitation and exception to the exclusive right granted by copyright law to the author of a creative work, and it is found in many common law jurisdictions including Canada. Currently, says Ghazi, the Copyright Act’s provisions for allowable infringement, including fair use by educational institutions, is “relatively restrictive.” Rewording the act to say “such as” and not “one of these eight” exceptions will help it adapt to evolutions in technology, he says.

INDU report, Recommendation 19: That the government examine measures to modernize copyright policy with digital technologies affecting Canadians and Canadian institutions, including the relevance of technological protection measures within copyright law, notably to facilitate the maintenance, repair or adaptation of a lawfully acquired device for non-infringing purposes.

Biernacki, who successfully represented Nintendo America Inc. in its copyright infringement case against Go Cyber Shopping, says he’s encouraged by INDU’s recognition of the effective use of technological protection measures as important in creative industries and of Canada’s international obligations.

However, he is concerned with INDU’s comment that it “agrees that the circumvention of TPMs should be allowed for non-infringing purposes, especially given the fact that the Nintendo case provided such a broad interpretation of TPMs.” Although Biernacki says he believes the reference to Nintendo should be interpreted neutrally, “if the committee is saying that infringement should be a precondition for TPMs, then that’s a problem.”

INDU Recommendation 28: That the government introduce legislation amending the Copyright Act to increase upper and lower limits of statutory damages provided under ss. 38.1(1), 38.1(2) and 38.1(3) of this Act to account for inflation, based on the years when they were originally set.

This recommendation was “a missed opportunity” to more significantly increase the upper limit of the range of statutory damages, to account for higher-value works valued at more than $20,000, says Biernacki says. 

It’s unlikely, though, that any of the recommendations will be passed into law before the fall elections, given the need for a first reading of a bill in the House of Commons and amendments made to the Copyright Act following that.


Standing Committees’ timelines and mandates

Dec. 13, 2017 - the House of Commons designated the Standing Committee on Industry, Science and Technology to review the Copyright Act. The committee heard a total of 263 witnesses and received 192 briefs. Section 92 of the Copyright Act provides that the act must be reviewed every five years by a designated or established parliamentary committee.

Feb. 13, 2018 - the statutory review began of the Copyright Act. It consisted of 52 meetings, which lasted until May 16, 2019. The committee heard a total of 263 witnesses and received 192 briefs.

March 29, 2018 - the House of Commons Standing Committee on Canadian Heritage adopted the following motion: “That the Standing Committee on Canadian Heritage, following the letter from the Standing Committee on Industry, Science and Technology, conduct a study on remuneration models for artists and creative industries, including rights management and the challenges and opportunities of new access points for creative content.”

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