Hugh Stephens Blog

Public Lending Right (PLR) Registration in Canada is Still Open: Enrol If You Are Eligible

Photo: Author

If you know all about the Public Lending Right (PLR) program in Canada, you probably don’t need this reminder. However, if you don’t and are a Canadian (citizen or resident) writer, editor, translator, photographer, illustrator, or narrator who has published a printed, audio or e-book with an ISBN number in the last five years, you may qualify for a PLR payment—but only if you register by May 1. The PLR program, run by the PLR Commission in association with the Canada Council, has been in operation in Canada since 1986. It distributes annually approximately $15 million to qualified authors registered with the program, based on a sampling of major libraries across the country to determine whether registered works are present in library holdings. Payments are based on library holdings, not the number of times a work is loaned out, despite the name “lending right”. This year, payments were made to 18,247 authors of the 20,091 who have registered. The maximum payout to an author was $4,500. Minimum payment is $50. The average payment was $806 and the median (half above; half below) was $399.91. Once a book is registered and confirmed to be in the library inventory, payments can continue for up to 25 years.

Not all genres are eligible. While the program covers fiction, poetry, drama, children’s literature, non-fiction and scholarly works, “practical” books such as cookbooks, self-help, “how-to” guides, travel guides, manuals, reference works, educational books like textbooks or books resulting from a conference, seminar or symposium, and periodicals, are not eligible. Full eligibility criteria for registration can be found here. Registration is a bit old-school and not that simple. A form needs to be downloaded and completed by hand. Various codes have to be added to the form (there is a guide). Photocopies have to be made of the work’s title page, copyright page, and table of contents. For audiobooks similar information must be provided, such as a photocopy of the audiobook box cover. Next, this all has to be packaged up and mailed through Canada Post. Registered mail is advised. Applications are then assessed, compared against an electronic database of library holdings and cheques prepared for mail out by February of next year. (A recent innovation is an option for electronic deposit). All this is accomplished by a dedicated staff of just 4 people!

About 800 authors a year apply for the program. In a sense, this is a problem because funding has not been increased for around two decades. (While new authors are added, there is some natural attrition as the estates of deceased authors do not receive payments, plus there is a drop off as older works age out). But the end result is a net increase, with the same amount of funding being spread over an ever-increasing base. Not only that, with inflation over the years the value of payments has actually declined by almost 50%. The Trudeau government made a pledge to increase the PLR back in 2021 but so far has taken no action. The Writers Union of Canada has advocated for a doubling of annual funding from $15 to $30 million (it was just $3 million when first launched in 1986). A coalition of Canadian publishing and authors organizations has just sent a public letter to the Minister for Canadian Heritage and the Finance Minister prior to the release of the 2024 budget on April 16 urging that commitments to increase funding be fulfilled.

The formula for payments to authors is somewhat complicated. It is explained on the PLR website as follows:

“Payment per title = Hit rate × # libraries where title is found × % share × time adjustment”

The hit rate varies but last year was $61.53. That is multiplied by the number of libraries where the title was found. If the author claims full title there is no percentage share adjustment but where a work has more than one author claiming a share of title (e.g. a writer as well as an illustrator), there is an adjustment related to the amount of contribution each made to the creation of the work. The time adjustment is related to when the work is published. Older works are subject to a discount. Got it? The best way to find out what you might earn is to register, assuming your work qualifies. If you get a cheque in 2025 you will have some idea of your contribution to the literary base of Canadian libraries.

Canada is now one of more than 30 countries that has a PLR. (The US does not). The first PLR program goes back to 1946 in Denmark, followed by Norway and Sweden although the idea originated in 1919 with the Nordic Authors’ Association passing a resolution calling on governments to compensate authors for library lending of their books. The World Intellectual Property Association (WIPO) defines the PLR as “the legal right that allows authors and other right holders to receive payment from government to compensate for the free loan of their books by public and other libraries.” In Europe, the PLR is actually underpinned by copyright legislation in the form of the Rental and Lending Right Directive (Directive 2006/115/EC) that provides authors with an exclusive right over the lending out of their works, or remuneration for the lending of such works. PLR in non-EU countries, such as Canada, Australia, New Zealand and Israel is not dependent on a legal right but is in fact a form of government subsidy to authors. In some countries payment is based on how often works are loaned, in others, such as Canada, it is based on library holdings.

In most countries, including Canada, libraries do not pay for the PLR, and it does not affect their budgets. Instead, funding comes from central government sources. You would think, therefore, that being part of the writer/publisher/reader ecosystem, libraries would be enthusiastic supporters of such payments to authors as it encourages them to create more works, enlarging the base of books available to users of libraries. That, however, is usually not the case. Libraries generally don’t support, or give very lukewarm support, to the PLR for fear that funding for it might come out of their hide, as in the Netherlands. (WIPO tactfully says that “In the few cases where libraries pay for PLR, such as in The Netherlands where public libraries operate as independent entities, PLR is viewed by the library community as a legitimate charge that fairly compensates authors for the use of their works free of charge by the public”). That is a very rosy interpretation of the position of most library associations. Not only is there concern that somehow funding for authors will mean less money for libraries, but there is ideological opposition from library associations too.

The International Federation of Library Associations and Institutions (IFLA), in its policy statement on PLR, states that “IFLA does not favour the principles of ‘lending right’, which can jeopardize free access to the services of publicly accessible libraries, which is the citizen’s human right…” It goes on to say that “the justification usually given for PLR – that the use of copyright works through public libraries detracts from primary sales – is unproven”, arguing that lending by libraries often assists in the marketing of copyright works. (equally unproven, I would say). The Canadian Library Association has published opinion pieces echoing IFLA’s position, although its official position is that it supports payments to Canadian writers and endorses the use of library data to implement the PLR. There are caveats, however, such as opposition to any legal entitlement to PLR payments for writers plus assertions that library lending is of financial benefit to authors even without any PLR payments.

Despite reluctant library endorsement, PLR continues to grow globally. It now exists in 34 countries, with another 27 having it under consideration. As a result, in 2019 IFLA nuanced its outright opposition. For countries where there is not yet a PLR, members are urged to continue to oppose it. In particular IFLA opposes establishment of a PLR in developing countries (I guess writers in those countries don’t deserve support). If institution of a PLR appears inevitable, IFLA’s position is that national library associations must insist it not be funded from library budgets and that the administrative burdens on libraries be minimized.

PLR International, an advocate for expanding the PLR that holds an international conference every few years (the last one was in Brussels in September of last year), has addressed the IFLA position head on. It clearly states in its Charter of Best Practices that “PLR systems should be funded directly by central and/or regional government and should NOT be funded from library budgets.” Canada’s PLR Commission has “Celebrating Libraries” as one of its three fundamental pillars, the others being “Supporting Authors” and “Enriching Readers”, no doubt in acknowledgement of the generally tepid position of library associations on the PLR. (Interestingly, in the UK, the PLR system is run by the British Library).

The sometimes surprising misalignment between authors and library interests relates not just to the PLR, as I wrote a few years ago (“Are Libraries the Enemy of Authors and Publishers?”). I concluded they were not, although more recently the position that some in the library sector have taken on Controlled Digital Lending and collective licensing (“Chided by the Canadian Federation of Library Associations for Defending Authors: What an Honour!) for educational publishers makes me wonder.

But whether Canadian libraries are enthusiastic or lukewarm supporters of the PLR, it exists and has been in existence in Canada for almost 40 years, albeit without any legislative foundation. Although payments are relatively trivial, they are nonetheless a welcome supplement to the income of many writers and are a mark of recognition and partnership between libraries and authors, even though it seems some librarians are reluctant to see it that way. Published authors out there who have not registered should do so, if only to demonstrate to the government the wide base of creativity in Canada and to encourage a topping up of the PLR fund. You have two weeks left. Deadline is May 1. Don’t miss out.

A Cautionary Copyright Tale

My daughter’s (copyrighted) art, circa 1990, age 5 (Used with permission)

It is rare that a copyright story makes the national news, in Canada or elsewhere, but this one had all the needed ingredients. A teacher exploiting students, irate parents, and a possibly negligent school board. What’s not to like?

The Canadian Press reported that ten Montreal area parents have launched a lawsuit for CAD$1.6 million against a junior high school teacher for copyright infringement, and for negligence on the part of the Board. According to the report, Mario Perron is (or was?) an art teacher at Westwood Junior High in St. Lazare, QC, west of Montreal Island. Perron had assigned his class to prepare “creepy portraits” of themselves and other students in the style of artist Jean-Michel Basquiat who, despite his Quebecois sounding name, was an American neo-impressionist artist in the 1980s who worked with Andy Warhol. Some of the works produced by the students were quite interesting, judging by the samples displayed in this Google search. (Who knows? Maybe they relied on an AI program to produce Basquiat-like works “in the style of”, as I did a couple of years ago for an earlier blog). My prompt, however, was for an artist (Monet) whose work is in the public domain.

Their teacher clearly did not give much thought to copyright when he posted artwork created by the students on his website, including portraits of classmates and self-portraits screened on to tee-shirts and coffee mugs. They were offered for sale at various prices, over $100 in some cases. There is little question that this was a flagrant violation of the student artists’ copyright. You may ask why these students would enjoy copyright in these amateur works? The answer is simple. The works met all the criteria in Canada to be eligible for copyright protection.

There is no minimum limit on the age of a creator, although a creator has to be living, sentient human being, not an AI robot or a monkey with a camera. (Yes, in theory even an infant’s artwork could be protected by copyright). All that needs to be shown is that the work is original (not a copy), that it is the expression of an idea (the idea itself cannot be copyrighted), that it demonstrates “skill and judgement” and that it is fixed in some form (i.e. a physical incarnation as on a canvas, or on paper, a recording, a photograph.) Plus, the artist must be a resident of a Berne Convention country (which Canada is). These works met all these criteria. A work does not have to be a Rembrandt to enjoy copyright protection. The artist does not have to be famous or have produced any other work. It could be argued that even dipping your hand into a can of paint and placing it in a certain way on the canvas constitutes originality, skill and judgement. These works belonged to the student artists and neither their teacher, nor anyone else, had the right to appropriate them through unauthorized reproduction and distribution, let alone for commercial purposes. The law is very clear.

In addition to copyright considerations, here are additional factors to take into account, such as the fact that the portraits were, according to the teacher’s instructions, either self-portraits or portraits of classmates. Since the instruction was to produce a “creepy portrait” à la Basquiat, it is not inconceivable that some of the subjects of the works might become the object of ridicule or harassment since their first names were attached to the portraits. This issue goes beyond copyright law, but it is important to remember that copyright law grants the creator the right to determine the means and extent of distribution of a work (for example, the author can decide not to publish or display it). These rights were violated. It is the potential damage from the unauthorized distribution of the works that could be even more harmful than the violation of economic rights. To usurp the right of the artist to decide where and how their work will be displayed is a clear violation of copyright law. I won’t comment on the personal harm aspects of the case, but they are clearly related to the copyright infringement elements.

The remedies sought are substantial, amounting to $155,000 for each of the ten families involved in the suit, based on statutory damages of $5000 per work times 31 works, the number created by each student. In addition, the plaintiffs are seeking $100,000 in punitive damages and $150,000 in costs. Canada’s Copyright Act, Section 38.1(1) provides for statutory damages (damages where the amount of actual damage does not have to be documented, nor actual injury proven) of not less than $500 and not more than $20,000 for commercial infringement, and not less than $100 and not more than $5000 for non-commercial infringement. Mr. Perron is potentially in big trouble.

As for the School Board, which is saying very little, the claim is that they were negligent in allowing this to happen. Are they any more negligent than a company whose employee carries out illicit after-hours activities, such as copyright violations of the work of others? I wouldn’t have thought so, but of course a teacher does exercise a position of trust over their students, and the Board is responsible for ensuring that the trust is exercised responsibly, so perhaps. The works were created in a classroom setting (this does not give either the school or the instructor any authorship rights over the works, by the way), yet the infringement occurred outside school hours and premises. Could or should the school administration have known? There certainly wasn’t a line in the policy book for teachers that said, “Do not make unauthorized use of student art for your own commercial gain”. Who would have thought of that? Anyway, I am not a lawyer so what I think about the Board’s culpability doesn’t really matter. The court will decide, if it gets to court.

The parents (one of whom must surely be an IP lawyer) have also asked for a written apology, the removal of all the students’ art from the internet and an accounting of funds earned. To my knowledge, they have not demanded that Perron be fired, although that may happen. Perhaps the suit has been filed to get the attention of the School Board, which was dilatory in responding to initial complaints. Perhaps there will be a non-punitive settlement, with any proceeds to date being donated to school art programs. Hopefully Mr. Perron and others will have learned an important lesson about the role of copyright in protecting the work of creators, even if they are young students. Perhaps he won’t lose his job.

I would like to think the result will be a greater awareness by educators, students and the public of the importance of copyright in society today. Let’s hope that this particular teacher was simply blind or ignorant with regard to his actions, not malign. He will now know better. It is an important lesson for all concerned, and a cautionary copyright tale if there ever was one.

Would Anyone Copyright This Flag? (Not an April Fool’s Joke)

Image: Flags of the World (Used with permission)

No, this flag is not an April Fool’s joke, although I am posting this on April 1. As a flag design, it’s a dog’s breakfast. Not that a registered design has to be aesthetically appealing, but it needs to be original. And this one is original, in its own way. The flag of the Town of Ladysmith, BC, as Ladysmith councillor Jeff Virtanen has stated, is a “hodgepodge”. The mayor also agrees that it should be updated. Where it actually came from, no-one is saying but it is a pastiche of the red bars of the Canadian flag, with a maple leaf in the lower right, dogwood symbol (the provincial flower of British Columbia) in the upper left, and then, in the middle, a design of what appears to be a sail boat (Ladysmith does have a harbour) with two horseshoes superimposed on the sail (not sure what they are supposed to represent), with a diagonal slash that says “49^th parallel”.

That is a reference to Ladysmith’s location, smack on the 49^th parallel, the dividing line between Canada and the United States for most of North America west of Lake of the Woods. However, owing to a quirk of both history and geography, when the boundary west of the Rockies between the United States and British possessions in North America was settled by the Oregon Treaty of 1846, all of Vancouver Island, which extends south as far as Victoria at latitude 48’ 25” N, was included within British territory. Somehow, the fact that you can drive through the 49^th parallel without being accosted by the US Border Patrol or the Canada Border Services Agency is part of Ladysmith’s appeal. Actually, it is a nice little town of 9,000 originally established as a coal mining centre back at the beginning of the 20^th century, with a great location, some nice heritage buildings—and a very eclectic flag.

Last year I wrote about flags and copyright (“Flagging Copyright Concerns: Vexillologists Take Note”), given the controversy over the Australian Aboriginal flag, when the Australian government had to fork over AUD$20 million to purchase the copyright to a flag design that it had adopted, as the Aboriginal flag, under the Flags Act. Aboriginal artist Harold Thomas had designed the flag back in the 1970s and an Australian court had upheld his copyright on the design. I doubt if there is going to be any dispute over ownership to the Ladysmith flag, although you will note that the flag image gracing this blog at the top of this page is used with permission of the website Flags of the World, which has a depiction of the Ladysmith flag along with 188,000 other flags. It is very detailed. If you want to know what the flag of Tannu Tuva between 1933 and 1941 looked like, this is the place to find out.

Generally, most country flags are not copyright protected either because the designs have lost protection owing to the lapse of time or because governments have made them copyright exempt. However, there may be other forms of intellectual property protection to ensure the national flag is not misused in such a way as to misrepresent a commercial entity as a government institution, or to prevent it from being disfigured or dishonoured.

Flags of the World has an extensive section on copyright, noting that, “Our editorial policy is to include images only when we can ascertain that we have permission to use them”. The website gives permission to use any of the flags on the site under the following conditions;

you limit your use to a maximum of 5% of the images or content of the website (let’s see, 5% of 188,000 is 9,400 so I am OK there)
you quote the author (Check, did that)
you quote the website (Check, yup)
you do not alter in any way the images or the content of the text (Check)
you use the material for non-commercial and non-political purposes only (And Check)

It looks like I am in the clear when it comes to using this particular flag image. However, just to be extra vigilant I asked for and was granted permission to use the flag design on the website which was designed by Masao Okazaki from a photo located by Dave Fowler. It is not clear who the original designer of the Ladysmith flag is or was.

Now, whether and when Ladysmith’s municipal flag will get a makeover is a good question. It may not be top of mind for residents who are dealing with other issues, like inflation, world peace or whatever. Still, a flag is a branding tool, and this brand needs updating.

But here are some copyright considerations that Ladysmith Town Council might want to consider.

When the new design is approved by Council, no doubt after an extensive public consultation process, the flag designer (or their estate) will hold the copyright for the work for the duration of their lifetime, plus 70 years. That is unless they are an employee of the town and were assigned the task of flag design as part of their duties, in which case ownership would vest in the township (unless there is an agreement between the employee and employer to the contrary) although the copyright term of protection will still last for the life of the author plus 70 years. In Canada, there can be a distinction between authorship and ownership. If the artist is not an employee but if the work is produced under a “contract of service or apprenticeship”, (as opposed to a simple “contract for services”), the township will also own the copyright. But if the work is done under a “contract for services”, i.e. as an “independent contractor”, the author of the work will control the copyright. What is the difference between the two types of contracts? That is why we have lawyers!

If you want to add another layer of complexity, even if the copyright is owned by the township, the author will still enjoy moral rights in the work, that is the ability to protect the integrity of the work, unless there is an agreement to the contrary. So, if we take the current flag as an example, and Council decides to remove the two horseshoes from the sailboat’s flag, in theory the creator of the original design (if anyone is aware of who that is) could assert their moral rights to oppose the modification of the flag. Better to get a new one designed and, if possible, control the copyright through contractual provisions.

Replacing a poorly designed flag may be a good idea, but keep in mind the copyright ramifications. I am sure that the Town has a legal department, or at least a lawyer on retainer for legal advice, so they will no doubt do it right. I can hardly wait to see the new flag floating proudly over Ladysmith harbour.

After Blocking News in Canada, Meta Challenges Australia (Again)

Image: Shutterstock via AI modification

It was inevitable. After Meta pulled the plug on news content on its platform in Canada as its way of complying with the obligations of the Online News Act, Australia, the model that Canada sought to emulate, was surely next in line. On March 1, Meta announced that it plans to stop paying publishers of news content in Australia, and will not renew its current agreements with Australian media once they expire. Most will expire this year.

Canada had modelled its Online News Act (Bill C-18) on Australia’s News Media Bargaining Code, albeit with “improvements”. Rod Sims, who was head of the Australian Competition and Consumer Commission (ACCC) at the time the Commission designed the Code (later incorporated into legislation as the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Act 2021), was invited to testify before the Canadian Parliamentary committee examining Bill C-18. In his testimony, Sims talked about the success of the Code, its benefits for not just large media players but also many smaller “country” outlets, estimating the benefits to be north of A$200 million per year to journalism in Australia. He added that the institution of the Code “has transformed the journalism landscape in Australia. It’s gone from pessimism to optimism.”

Inspired by the results of the Australian legislation (which, by the way, ended up not designating either Google or Facebook under the Code, since they managed to come to sufficient “voluntary” agreements with Australian media), Canada moved ahead, basing its legislation on the Australian law but adding a couple of additional features. One was to increase transparency with regard to deals that would be struck under the law. Another was to require self-designation by platforms (while making it apparent that only Meta/Facebook and Google) met the criteria, allowing them an exemption if they reached acceptable deals with media. In this way, the companies could not avoid designation and would be subject to the law, something they strongly opposed, even though both had already engaged in voluntary programs on their own terms to provide some financial support to selected media outlets.

Just as happened in Australia, (see “Google’s Latest “Stoush” with Australia: What’s the Lesson from Germany’s Failed Effort? and “Facebook in Australia: “READY, FIRE, AIM”) both platforms pushed back strongly against the draft legislation, threatening to block news for Canadian users. (Facebook briefly and disastrously blocked news for Australian users during its campaign against the Code, but ultimately backed down). First, in the fall of 2022 Facebook said it might have to block postings of news on its Canadian platform, followed by Google which threatened to block search for Canadian news in Canada by Canadian users. By the summer of 2023, when the Online News Act became law without any of the amendments proposed by the platforms, Meta upped the ante by declaring that it would end news availability on Facebook and Instagram for all users in Canada prior to the Act taking effect, set for December 2023. Again, just as in Australia, Canadian government leaders were public in their condemnation, accusing Meta of threatening and irresponsible behaviour. Alas, it was all to no avail. It appears Meta had already made its decision to not provide financial support for news content in Canada, and to end the few existing agreements that it had undertaken in the past. At the time, it indicated it would also be taking similar action elsewhere. Rather than submit to the legislation by negotiating with media entities, it complied (in letter if not in spirit) by blocking links to Canadian media. Negotiations with Google continued and eventually a compromise of sorts was reached whereby Google agreed to contribute to a fund which would be used to support journalism in Canada.

This was a somewhat pyrrhic victory (the fund will be about $100 million, less than half what had previously been estimated), but a victory nonetheless in the eyes of at least some of the news media. One can debate the overall success of the legislation (see MediaPolicy.ca’s “The Online News Act is law: a buzzer-beater win or epic miscalculation?”), but along with more government financial support, the Google funded pot will be welcomed by many smaller media outfits. Ironically, establishing a fund rather than requiring negotiations between the platforms and media for payment for content was an early proposal by some commentators. Now this has come to pass more by accident than design. Criteria for disbursing from the fund have been tweaked so that broadcast media, and in particular the CBC, who employ the bulk of news journalists in the country, get less than their proportional share would otherwise indicate.

The lesson for Canada, and now for Australia, is that the big digital platforms will not hesitate to play hardball if they feel their global interests are threatened. While Australia, followed by Canada, was first off the mark with legislation designed to level the playing field between a stressed journalism sector and the monolithic platforms, the response of the platforms was governed more by potential precedent than the specifics of those markets. The existence of draft legislation at the federal level in the US, (the Journalism Competition and Preservation Act, aka JCPA) as well as at the state level in California and Illinois, has not escaped the attention of Meta and Google. (Even the watered-down compromise settlement that Google made with Canada has led to some lip-smacking speculation in the US as to the amount of funding that could flow to US media). It appears that Meta, in the face of cost cutting and loss of market share in 2022, had made a business decision that if it had to pay for access to news content, it would do without. To what extent this is a wise business decision remains to be seen, but the company has clearly made a business decision in this regard. This decision may or may not affect Meta’s bottom line, but it will have the effect of leaving the platform as a purveyor of less than reliable information from nonprofessional sources. However, doing the most socially responsible thing as opposed to maximizing profits by cutting costs is not what Meta is about. Having made its decision, it will need to unwind its commitments to Australian media, which it is now in the process of doing.

What does this mean for Australia and what can the Australian government do about it? Writing about this in Canada’s National Post, Rod Sims, now professor at the Crawford School of Public Policy at ANU, outlined some choices the Australian government needs to face. It could move to designate Meta under the Bargaining Code and force it into the negotiation and arbitration process. That would likely lead to Meta taking precisely the action that it took in Canada. The government could amend the legislation, but to what end? It could publicly criticize Meta, accusing it of unfairness and bad behaviour. It has already done this, with Prime Minister Albanese saying that what Meta is doing is “not the Australian way”. That will have zero influence on Mark Zuckerberg and the people who run Meta.

At the end of the day, Australia can stand up to Meta, and let the chips fall as they may, or it can allow Meta to free ride on Australian news content, accepting that there may be social benefits in allowing this to happen. A recent report by the Australian Broadcasting Commission (ABC) points out that Facebook is the largest social media platform for general news and half of Facebook’s users in Australia report using the social media platform for news. (Regardless of this, Meta’s beancounters give news no value to the platform). According to a University of Canberra report cited by ABC, 45% of Australians get their news from social media as opposed to less than 20% from print sources. The largest source of news is still TV at 58%. (The numbers are greater than 100 because many consumers get their news from more than one source). In one sampling, 14% of Australians got their news from Instagram! While I find this personally appalling (indirectly revealing my age), that is the reality of our society today. Better that consumers find reliable, curated news somewhere–but we still need to recognize that responsible journalism needs to be paid for. Meta, apparently, has no desire to be a part of that equation. Without the infusion of responsible, curated journalism, Facebook will become an even greater home for misinformation than it already is. But does Meta care? Clearly not. Consumers need to be encouraged to find their news sources elsewhere. Easier said than done.

The Australian government is no doubt pondering how to respond in the best interest of Australia. Allowing Meta to wriggle out from its obligations under the Bargaining Code would not necessarily undermine the deals struck with Google, who appears to have accepted that its overall interest is best served by some form of accommodation. Having Microsoft, which has publicly stated it is willing to subject itself to both the Australian and Canadian legislation, breathing down its neck is undoubtedly a factor in this. Even if the Google deal won’t be undone, it is still galling that Meta can get away with it. Canada had to swallow that reality, yet stood up to Meta. What will Australia do? It’s a tough call.

DMCA Copyright Infringement? The Perils of Relying on AI

Image: Shutterstock

My curiosity was piqued by the email that popped up in my inbox. “DMCA Copyright Infringement Notice”. Should I open it or ignore it? I took the plunge. Immediately my sphincter puckered, and a frisson went down my spine as I read it was from one Alicia Weber, Trademark Attorney, with Nationwide Legal Services in Austin, TX. She stated that she represented the Intellectual Property division of Claude AI UK and Nationwide Legal had identified an image belonging to their client on this very blog. If I did not take specified action within 5 business days, legal proceedings would be undertaken against me under DMCA Section 512(c) guidelines. What had I done? As one might expect for a copyright blog, I strive to be meticulously careful and to follow the copyright rules, but images can be tricky. I have found that the safest thing is to make your own, or license one from a service like Shutterstock. However on occasion, when Shutterstock does not have what I want, I have resorted to using a Creative Commons (CC) image off the web, being careful to comply with its terms.

Complying with usage terms is really important for works covered by CC licences, as the Independent Journal Review, a US news website, has just learned. In a recent case, the website used a photograph offered through a Creative Commons licence by photographer Larry Philpot, but failed to attribute the work to the author as required by the terms of the licence. There was no requirement to pay for using the photo, just to provide attribution in the correct format. The law firm blog that discussed this case does not say what the damages were, but there have been a number of cases where users who did not comply with the full terms of a Creative Commons licence have found themselves sued for, and sometimes paying out, substantial sums. There is even a “business model”, if you can describe it as such, that consists of putting out images on the web covered by a complicated CC licence, such as the original CC 2.0 licence, and then going after users for statutory damages for willful infringement if even the slightest mistake is made in attribution. This practice is commonly referred to as “copyright trolling”. While I am not passing judgment one way or the other, this website claims that the plaintiff in the Independent Journal Review case fits that description, although in that case the attribution requirements did not seem to me to be particularly onerous.

But back to Nationwide Legal Services of Austin, TX. Did I make an error of attribution? Since the image I used was licensed from Shutterstock, and was indicated as such on the blogpost, clearly not. What then was the problem? According to the complaint, this blog post of mine used an image belonging to Claude AI. To wit, this image.

But wait (as the TV ads say), it is clearly not the same image. Yes, it has some superficial similarities to the one I licensed from Shutterstock. Both have an image of a robot holding a logo outlined in red, although not the same robot. In the case of the image I used, the robot is holding the internationally recognized symbol for copyright, ©. See above. The robot in the Claude AI image appears to be holding a stylized image of a Euro. How could the two have been confused? Did any human actually look at these two images and compare them? If so, they would have seen that they are clearly different. Did one take inspiration from the other? I don’t know, but Claude AI’s image could just as easily have been based on the one offered by Shutterstock or vice versa. So, what happened?

More than likely the supposed match between the two was identified by an AI powered web crawler that scanned thousands of images on the web and then compared them to images held in Claude AI’s repertoire, but apparently no one bothered to actually verify the match. It was easier to simply send out an (automated?) letter demanding action. In this case, although the legal language was threatening, the demand was not for money. All that was asked was that I credit the company by adding a direct and clickable hyperlink to https://claudeai.uk/, either beneath the image or in the footer of the page. This link leads to a webpage that proudly proclaims, “Maximizing Efficiency with Claude AI: The Future of Workplace Automation”. Claude AI is touted as “an artificial intelligence-powered platform that can automate various tasks in the workplace.”

Like identifying infringing images and sending legal notices?

Well, No-one said AI was perfect.

I politely responded to Ms. Weber, pointing out the discrepancy. So far, I have not heard back. I hope I don’t.

Japan’s Text and Data Mining (TDM) Copyright Exception for AI Training: A Needed and Welcome Clarification from the Responsible Agency

A news headline that reads “AI Guidelines”

Image: iStock

Japan has always been known for its strong creative sector and rich cultural output, from animé to manga to literature, music and film, and for its respect for intellectual property (IP) and the rights of creators. Compared to some of its neighbours in the region, it has been a pillar of respect for IP. In the middle of last year, however, this image was sharply challenged through the interpretation, or misinterpretation, of remarks made to a Diet committee by then Minister of Education, Culture, Sports, Science and Technology (known by its acronym of MEXT), Keiko Nagaoka, with respect to Japan’s Text and Data Mining (TDM) exception. The TDM exception had been introduced in 2018. It was widely, but incorrectly, reported (for example, here and here) that the Minister had stated Japan would not enforce copyrights on data used for AI training. To the dismay of creators everywhere, this statement was pumped up by advocates for the AI industry as an example for others to follow in the competitive race to develop generative AI, even if it meant throwing rights-holders under the bus. But this is not what really happened. To clear up any confusion, Japan’s Agency for Cultural Affairs (ACA), an entity that is part of MEXT and which (as part of its mandate) manages the Copyright Office, has just published a draft discussion and consultation paper on AI and copyright. To understand the true situation regarding TDM for AI training in Japan, and the Japanese government’s position on this issue, read on.

The misinformation about Japan’s position on AI and copyright can be traced back to Article 30(4) of the Copyright Law, the 2018 amendment introduced to deal with text and data mining. At the time, it did not attract much attention, but has come into prominence with the explosion of data mining for AI development. This section permits the unlicensed use of copyrighted data for the purpose of testing, data analysis or data processing. Notably (and unfortunately) it does not make any explicit distinction between legally accessed and non-legally accessed materials, unlike the TDM provisions in the EU, the UK and Singapore. In other words, it does not explicitly prohibit the use of pirated content.

At first blush, Section 30 (4) appears to be the proverbial loophole in copyright protection through which you could drive the generative AI truck. That, however, is not the case despite misunderstandings regarding Minister Nagaoka’s comments. The provision carefully distinguishes between works where the end use is simply for data analysis and processing purposes, and uses where, according to the English translation of the Japanese law, there is a degree of “enjoyment” of the work by the user, in which case the exception does not apply. We will come back to the meaning of “enjoyment”, as this is a key part of the story. In addition, the use of the work must not “unreasonably prejudice the interests of the copyright owner”. Many readers will recognize this wording as the third element of the Berne Convention “three step test” that governs exceptions to copyright.

Now, let’s look at the meaning of “enjoyment” in the context of Article 30(4). Unfortunately, I don’t speak Japanese, so I don’t know what specific Japanese term is being rendered into English as “enjoyment”. The English term is likely not an exact equivalent. However, the meaning of “enjoyment” in Japanese law is critical as it is the key concept that separates a benign use of data in its most generic form from data where there is perception of, or access to, the actual content (i.e. the copyrighted expression of an idea, translated as “the thoughts and sentiments expressed in the work”). “Enjoyment” also encompasses the idea of benefit or beneficial use. One definition mentioned in the ACA’s discussion paper describes enjoyment as “the act of accepting, savoring, and enjoying something that is mentally excellent or materially beneficial”. According to the Agency’s discussion paper, if the user of the copyrighted data derives benefit from the content, such as by creating output based on that content, and thus creates “a product that allows one to directly sense the essential characteristics of the expression of the copyrighted work of the learning data…”, then “enjoyment” exists. And importantly, if enjoyment exists, the TDM exception to copyright in Article 30(4) does not apply.

Given that at least some AI generated works clearly replicate and display the essential characteristics of works they were trained on, it is clear the claim that Japan has provided a blanket copyright exception for AI training is miles off-base. This conclusion seems to have escaped those who loudly proclaimed last year that Japan had opened the taps to permissionless copying of copyrighted works for AI development purposes. The potential lack of clarity, compounded by misinterpretation of Minister Nagaoka’s remarks, has led to the drafting of the ACA discussion paper, and launch of a public consultation. It is a welcome development.

The latest draft of this paper, dated January 2024, helps clarify a number of questions related to the Article 30(4) TDM exception. The paper makes it clear that far from declaring open season on its creative sector, Japan has defined its TDM exception carefully and narrowly. However, it is not without its problems, notably the omission of any reference to a requirement for lawful access to data. Credit for pressing for clarification of Japan’s position must go to the country’s creative sector, which has worked hard to ensure that Japan’s position on a TDM exception for AI training is properly understood, both domestically and internationally.

On the lawful data issue, the discussion paper recognizes the damage that piracy causes to Japanese rights-holders;

“…the damage to Japan’s content industry caused by pirated versions is enormous, and it goes without saying that countermeasures against piracy (should be) moved forward…”.

More specifically, the paper makes it clear that knowingly collecting data from a site containing pirated content increases the likelihood that AI developers or AI service providers will bear liability for infringement, as this would represent a neglect of duty of care. This statement in the discussion paper does not, of course, have the force of law but is a further positive indication of the intent and future direction of Japanese law and regulation in this area.

Arguably, Japan’s TDM exception for AI training as expressed in Article 30(4) could have been more clearly drafted, or perhaps a more precise translation could have been prepared. The misunderstanding and reporting of Minister Nagaoka’s comments outside Japan was unfortunately distorted by cultural differences and nuances of language—not to mention probably willful distortion by those seeking to weaken copyright protection globally. The ACA’s draft discussion paper is a welcome clarification of the purpose and intent of the law, demonstrating the careful balance of interests in the legislation and reaffirming the protection that rights-holders in Japan enjoy under the Copyright Act. Hopefully, the draft paper will be finalized shortly and become the foundation for further clarification of the law’s intent.

Given the unlikelihood of further legislative change at the moment, the key conclusions of the paper could be put into officially issued guidelines or regulations. These could also include potentially incorporating all three elements of Berne’s three-step test, thus reaffirming Japan’s well-deserved reputation as a rule of law country that fully respects the rights of creators and its international obligations.

What Do Fair Use and Fair Dealing Mean in an Age of Artificial Intelligence (AI)

Image: Shutterstock

For those of you who may have missed it, this is “Fair Use and Fair Dealing” week, sponsored once again this year by the Association of Research Libraries in the US and the Canadian Association of Research Libraries in Canada. I have written blog posts on fair use/fair dealing for the past couple of years, (here, and here), trying to provide some perspective on the topic given the annual “celebration” of this feature of copyright law by the library community. Yes, it is an important feature of copyright, a defence to infringement in the US and declared to be a “user’s right” by the Supreme Court in Canada. It is an essential part of the copyright landscape, a limitation on the exclusive rights an author enjoys over their work, and is designed to allow reasonable, permissionless and uncompensated (i.e. unlicensed) use of copyrighted works in order to achieve and preserve certain public policy objectives, such as the encouragement of learning and dissemination of knowledge.

Fair use and fair dealing also enable some essential features of a modern democracy, for example by allowing news reporting and artistic criticism to function effectively as well as by facilitating some other specified uses, such as parody and satire. All this has been baked into copyright law for a century or more in Canada and the UK and for longer than that in the US through jurisprudence. However, while fair use and fair dealing permit a relatively wide range of uses of copyrighted materials without licensing, there are limits set by legislation and the courts with regard to the amount of content used and the purpose to which it is put. Each time a new technology comes along, those limits are tested. And AI is severely testing those limits today.

AI is not the only challenge faced by rights-holders as a result of the ambiguities of fair use and fair dealing. The continued uncompensated and unauthorized widespread use of copyrighted and licensable materials by Canada’s education sector, particularly post-secondary institutions, under the pretext of education fair dealing is one current example. The unlicensed and unauthorized digital scanning of copyrighted published works under the invented, contentious and ultimately legally unsustainable theory of “controlled digital lending”, which I wrote about here and here, is another. AI, however, is the unlicensed use where the financial stakes are the highest, running into billions, if not tens of billions of dollars. It is remarkable that the US high tech industry and generative AI developers have tied their substantial investments to a very shaky interpretation of fair use. In effect, they have admitted to permissionless (i.e. unauthorized/unlicensed) reproduction of copyrighted works by resorting to a fair use defence. If there is no potential infringement through unlicensed reproduction and distribution (i.e. no copy has been made, or the copying is de minimis or does not reproduce the protectable expression of a work), there is no need to invoke fair use, yet that is what OpenAI, StabilityAI, Midjourney and other generative AI developers that are being sued by rights-holders (ranging from individual authors and artists to the New York Times, Getty Images and Universal Music) have done. What is the basis of this fair use defence? From the perspective of the generative AI developers, it is that the infringing uses are “transformational”, producing something new that is not a derivative nor a commercial substitute for the original.

This is a line of legal argument that has some traction in the US. While not enshrined in any US legislation, the “transformation doctrine” has nonetheless been relied on by US courts in recent years to justify fair use rulings, (when combined with consideration of the other three factors used in the US to determine fair use). One of the most notable of such transformative use decisions was the Google Books case (Authors Guild, Inc v Google Books, Inc), where a US court found that Google’s unauthorized scanning of the plaintiff’s copyrighted works was a fair use because the sampling index it produced was different from the original works and did not directly compete with them commercially. This is the line of argumentation the AI developers are counting on to justify their unauthorized ingestion, through reproduction, of hundreds of thousands of copyrighted works. But will this carry the day? The situation today looks a lot less certain than when the Google Books case was decided in 2015.

The Association of Research Libraries (ARL), the sponsor of fair use week in the US, has gone on record to declare that, in its view, training generative AI models on copyrighted works is a fair use. (The librarians should be careful what they wish for as AI has the capacity to do as much damage to the library sector as it threatens to do to authors.) The ARL cites the Google Books case as well as others in support of its position. However, there are other more recent cases that make it far from obvious that this transformational use argument will prevail in the case of AI, or at least in some AI cases. Two recent cases in particular have cast doubt on the “open season” on creators that overly broad interpretations of the transformation doctrine have brought about in recent years.

The first was the Internet Archive v Hachette case in 2023 (now under appeal) that dismissed the arguments of the Internet Archive that its unauthorized scanning (copying) of a number of copyrighted works (127 in total, represented by Hachette and three other publishers), and the subsequent lending of those works in digital format, was a transformational fair use. While the court’s decision in favour of the publishers was not based exclusively on a rejection of transformative use for the works in question, this was a big part of the decision. The second case, also decided in 2023, (on appeal to the US Supreme Court), Warhol Foundation v Goldsmith, resulted in the Andy Warhol Foundation being held responsible for infringing the copyright of photographer Lynn Goldsmith by licensing one of Warhol’s remakes of her iconic photograph of musician Prince as a magazine cover. The Warhol Foundation had sought a ruling that Warhol’s use of Goldsmith’s photo to create a series of coloured silkscreen artworks, including the “Orange Prince” print that was licensed as a magazine cover, was transformational and thus a fair use. While the district court had originally found in favour of Warhol, this was overturned on appeal and sustained by the Supreme Court, which held that the licensing of Warhol’s “Orange Prince” work (based directly on Goldsmith’s photograph of Prince) was not transformational because it substituted for the original in the commercial market.

The same could be said of an AI generated image or work that is substantially similar to an original work it has been trained on, (i.e. it incorporates protected elements of a copyrighted work), and which then substitutes for or competes with the original commercially.

The Supreme Court’s Warhol decision seems to have sent a chill through the world of appropriation art, as I noted in a recent blog regarding the willingness of appropriation artist Richard Prince (no relation to the musician, who died in 2016) to reach what amounted to a public settlement (final judgment) over a longstanding lawsuit with two photographers whose works he had appropriated to produce what amounted to derivative works. Artist Prince agreed to conditions that prevent him from “reproducing, modifying, preparing derivative works from, displaying, selling, offering to sell or otherwise distributing” the works based on the plaintiff’s photographs, while paying the photographers five times what he had earned from selling the derivative works, plus covering the plaintiff’s legal costs. Total payments amounted to almost a million dollars. This case was significant, and could well have ramifications for pending AI lawsuits.

The AI industry has staked a lot on a very thin reed, particularly given the welcome swing of the fair use pendulum back to a more balanced position by US courts. Uttering the words, “transformative use” is no longer an automatic get-out-of-jail-free card when works are copied holus-bolus. While it is true that not all generative AI outputs reflect or are substantially similar to the works they were trained on, sometimes they are, as we have seen in the New York Times v OpenAI case. If the AI output is very similar to the original work, and substitutes in the market for it (e.g. artwork promoting….in the style of….), what is transformational about that?

A lot can depend on what prompts are entered, as OpenAI is arguing. But that is putting the responsibility for the infringement on the user, i.e. the human creating the prompts, rather than on entity that did the infringing in the first place by reproducing the copyrighted work without permission. Moreover, it is not enough to say, as OpenAI has argued, that there was a “bug” in their system that they will fix in future iterations. Past infringement is still infringement. You can’t just say, “Sorry, I won’t do it again”. If you infringed, you infringed and there is no guarantee that it won’t happen in future. If the product wasn’t ready for prime time, it should not have been launched on the public.

While neither of the previous cases I have referred to are dispositive of all the issues, and each case must be decided on its own merits, there is nonetheless a compelling trend suggesting that the “transformative use” free ride is coming to an end. If I were an AI developer who had staked hundreds of millions of dollars on the shaky premise that my unlicensed appropriation of copyright protected expression would be found to be a fair use, I would be worried, very worried.

The key message is that while fair use is an important facet of copyright law, it has its limits. This is an important message worth repeating during fair use week. Those limits are being tested by AI developers who have been following a “ask forgiveness after rather than permission before” approach. They may get an unpleasant surprise.

In sum, when it comes to fair use and fair dealing, let us by all means acknowledge its importance, but also remember the other side of the coin. Its limits. What exactly fair use means in the age of AI remains to be determined by the courts, but it is important to remember that it is not a blank cheque based on some mystique of transformation. Along with fair dealing, it is a set of exceptions that gives users plenty of scope for unlicensed uses–but is not a licence for unlimited free-riding and unfair competition with the copyrighted output of creators. That’s a good takeaway for Fair Use and Fair Dealing Week.

This post has been updated to clarify that invocation of fair use is a de facto admission of unlicensed reproduction and distribution of a copyright protected work, and thus a potential infringement.

Australia’s Proposed Streaming Cash Grab is Risky for Australian Consumers and Production Jobs: It’s Time to Dial it Back

Screen Australia Drama Report

At a time when streaming services (also referred to as subscription video on demand, or SVOD) are growing internationally at a frenzied pace, various countries are pondering how to deal with this phenomenon, particularly when it comes to local production. Streaming has some of the characteristics of broadcasting yet operates on a different business model. Everyone thinks of Netflix or Amazon, but there are many streaming players both large and small, ranging from Disney+, HBO, Paramount+ and Apple among US players, to Britbox, Stan in Australia and others such as CanalPlus in France and Crave in Canada. Broadcast regulators, who for the past few decades have habitually regulated what is transmitted over the airwaves and cable through their licensing powers, have tried to get their arms around this new, husky kid on the block. However, instead of providing incentives to stimulate more local production, many have decided the streamers are a potential cash cow that can be tapped to fund domestic drama. Various regulatory options are being floated.

In this rush to regulate, national authorities need to be careful not to kill the golden goose (t0 mix a metaphor) of funding for local production coming from offshore, mostly US, producers. The streamers operate in a global environment and can always shift investment elsewhere if costs get out of line in a specific market. As a result, the degree and type of regulation instituted by smaller but important players like Canada, Australia, and others, is critically important. Regulators need to be careful to avoid creating a domestic cost base that is uncompetitive or else both the domestic industry and consumers could suffer. Denmark is a case in point where its proposed 6% levy on streaming revenues, combined with a contractual standoff between unions, producers and the streamers, has led to a catastrophic drop in production of Danish series. That is the risk currently playing out both in Canada, with Bill C-11, and in Australia, with the government’s consultation process for Australian screen content requirements on streaming services.

In Australia, the streamers are currently the leading source of production funding for Australian adult drama. Streaming services now invest more in this genre than public, commercial and subscription broadcasters combined, despite having no legal obligation to do so. Expenditures on streaming productions increased from A$371 million in 2018/19 to A$680 million in 2022/23. As a result of this record level of investment, local production costs have shot up, with labour costs rising more than 40% over the past five years. Because of rising costs, and the relative newness of the industry (which has resulted in a scramble for subscribers and market share), most streamers are currently losing money. The Australian and New Zealand Screen Association (ANZSA), which represents the MPA studios as well as several local screen businesses, estimates that its members collectively lost A$3.6 billion in the past year. Looking just at the traditional Hollywood studios, that loss was a stunning $A12.6 billion globally, a margin of minus 21%.

The industry will undoubtedly settle down to a greater equilibrium once the initial phase of market establishment is over, including rationalizing and becoming more efficient in production costs. However, one of the models being proposed by the Australian government is to impose a required contribution to Australian scripted drama (excluding any financial contribution made to other forms of Australian content) of up to 30%, based on the previous year’s amount of expenditure on programming. There would be a sliding scale dependent upon the number of Australian subscribers. Given the constant flux and evolution in the industry, there is no business logic in basing required contributions on program expenditures at a given moment in time, when labour costs are inflated, and streamers are temporarily running unprofitable businesses in order to secure market share. It is not only an unfair burden based on an unsustainable expenditure pattern but will lead to expectations that whatever contributions are made in a given year will constitute a floor and should grow. In short, to lock that formula into long term legislation is like taking a snapshot in time and setting it in amber.

A possible alternate formula proposed for financing the production of Australian scripted drama is to base the contribution on revenues. This is even more problematic from a business point of view. Revenues are growing but so are expenditures. Remember all the red ink referred to earlier? At the present time, revenues are not a good proxy for the state of the industry and would negatively affect younger services, or those yet to launch. Moreover, the contribution expected from streamers based on revenue is disproportionate when compared with commercial and subscription broadcasters. Streamers are expected to contribute 10% of revenues (less sports programming revenue) whereas the current contribution from traditional broadcasters is between 1 and 2% of revenues. Not only that, but the consultation paper also indicates the 10% would constitute only a floor for Australian drama expenditure. It could be doubled to 20% over time.

Both of these proposed formulae threaten to place an unsustainable burden on the industry. For example, the 6% revenue levy in Denmark compares unfavourably to other countries in the EU where levies on revenue range from zero to the 1.5 to 2.5% percent range in Greece, the Netherlands and Germany. The Australian proposal is to start at 10% and moves up from there!

What will be the result? Who will the losers be? While the Australian government’s desire to increase spending on the production of local content is understandable, every policy initiative needs to be examined in the light of possible consequences. Australia is a big and important market so, frankly, it is unlikely but not impossible that the streamers will pull out (as happened with Amazon in Vietnam or with Warner Bros in Denmark, in terms of production), but a certain result is that new streaming services will be reluctant to enter the market. If the expenditure model is adopted as proposed, with increasing tiers of contribution dependent on number of subscribers, there will also be a perverse disincentive to avoid growing the subscriber base. Instead, businesses will be encouraged to raise subscription fees to keep the number of subscribers constant while maintaining needed margins. The big loser will the Australian consumer, who will have fewer or more expensive viewing options, as well as the Australian production industry as streamers take steps to control expenditure on productions to minimize compulsory contributions to one relatively narrow genre of content. Increased costs have to be covered somewhere and if costs of production in Australia soar owing to government intervention, they will either be underwritten in the final analysis by the Australian consumer, or production will seek more competitive environments.

Given the current rate of investment by the streaming industry in Australian content, one wonders what problem the Australian government is trying to fix. To box in an evolving industry, one that is offering plenty of local content to Australian consumers and providing lots of well-paying jobs to the local production industry, seems to me–to say the least—very short-sighted. The streaming industry clearly has incentives to invest in Australian content. Those incentives are the good production values that exist in Australia, good stories serving both local and international audiences and a growing subscriber base that will one day be sustaining from a business perspective, as well as a reasonably competitive market from the perspective of production costs. To impose a disincentive on this virtuous circle by distorting investment decisions through the imposition of an inflexible formula mandating a significant investment to support only specific forms of production is a good way to undermine this positive scenario.

Australia, like other “middle countries” such as Canada, need to be careful not to be regulating in ways that are unsustainable for the market. Canada has just had to swallow hard and put a considerable amount of water in its wine to come to a deal with Google over payment for accessing news content, and has had to watch Facebook block news for Canadian subscribers. Australia managed to reach more successful deals with these large internet giants, although there are reports that Facebook might not renew the deals it made in Australia. Having been bloodied once, the web giants subsequently decided to hold the line in Canada lest the “contagion” spread. While the comparison with Google and Facebook is not exact, (these companies dominate their digital industry in a way that no streaming service does), the streaming industry is not an inexhaustible cash cow to be milked dry; it should be expected to contribute a fair share to domestic production, but it operates on a global scale and overly restrictive demands from any one country can upset the balance of models that contribute to win/win outcomes. Getting that balance right is critical, especially in a mid-sized economy like Australia.

In the meantime, the streamers have been asked to provide input into the Australian consultation paper issued in November. This paper identifies the costs/challenges and likely benefits of each of the two proposed models, based on either program expenditure or gross revenues. From the industry’s perspective, this is like having to decide whether it’s better to be shot or to hang. Surely Australia can do better. It is not too late to dial this back to find a balanced solution that works for everyone–Australian consumers, the Australian production industry, and the international streamers.

Returning the Masks and Restoring Some Justice

By Leoboudv-Own Work, CC BY-SA 3.0 https://commons.wikimedia.org/w/index.php?curid=6733224

The issue of reconciliation with Indigenous peoples will remain a front-burner issue in Canada in 2024 so I think it appropriate to post a good news story on this topic early in the year. I should note, however, that while it may qualify as good news now, it is built on decades of bad news. The story is that hereditary chiefs and other representatives from a First Nation on the northern tip of Vancouver Island have declared their intention to reclaim 17 carved masks and other regalia currently held by the Royal BC Museum in Victoria. The Nation is building a new “bighouse” on their land near Port Hardy and will hold a week-long potlatch where the returned items will be honoured in dance and ceremony for the first time in many decades. According to hereditary chief Henry Seaweed, some of the masks were carved by his grandfather, Willie Seaweed (Sewid), known to be a master carver.

The story of these and similar ceremonial objects is a painful one. Many were carved in the late 19^th century or early 20^th century and were variously acquired by collectors and museums. Some of the most culturally insensitive acquisitions were seizures of cultural properties from Indigenous groups as a result of the outlawing of potlatching. The potlatch, according to the Canadian Encyclopedia, “is a ceremony integral to the governing structure, culture and spiritual traditions of various First Nations living on the Northwest Coast and in parts of the interior western subarctic. It primarily functions to redistribute wealth, confer status and rank upon individuals, kin groups and clans, and to establish claims to names, powers and rights to hunting and fishing territories.” But to the power brokers of the time, the missionaries, educators and government agents, it was a “wasteful, immoral and heathen practice”, to cite the words in the history section of the website maintained by the U’Mista Cultural Centre of Alert Bay, BC. Alert Bay is the site of the most egregious example of culture clash and disproportionate power that resulted in the confiscation of cultural artefacts from the native population. The potlatch was outlawed by the federal government as early as 1884, becoming a misdemeanor punishable by up to six months imprisonment, but enforcement was lax. However, the law was progressively tightened and zealous Indian agents, particularly the one in Alert Bay, William May Halliday, were determined to stamp out the potlatch. In 1921, a native leader Dan Cranmer, organized a potlatch at Village Island, a small island between Vancouver Island and the mainland not far from Alert Bay. This was the opportunity for Halliday to swoop in, supported by Sgt. Angerman of the BC Provincial Police Forty five people were arrested, but sentences were suspended if those charged agreed to give up their potlatch ceremonial paraphernalia. Halliday took custody of the items. Those who refused were sent to prison in Vancouver.

The travesty didn’t end there. According to the account published by U’mista, Halliday later sold 33 pieces to a collector, although whether this was for personal gain or to raise funds for the community is not clear. In any event, he was reprimanded by the Department of Indian Affairs for taking this action. The greater part of the collection was crated and shipped to Ottawa to what at the time was called the “National Museum of Man” and to the Royal Ontario Museum. As for Sgt. Angerman, he ended up with a few of the pieces in his private collection, eventually donating them to the National Museum of the American Indian in Washington, DC.

After the eventual repeal of the potlatch ban in 1951, efforts began to get the items repatriated. By the mid-1970s the museum authorities in Ottawa and Toronto had agreed to return the artefacts provided that a suitable museum was built to house them. Since then other items that had been scattered in the US and UK have been returned to the U’Mista Cultural Centre, a modern and well curated museum established in Alert Bay. The Kwakwa̱ka̱ʼwakw of Alert Bay have thus been able to reclaim their cultural heritage, although it has been a long journey. Now the Gwa’sala-‘Nakwaxda’xw people, originally from Smiths Inlet and Blunden Harbour, but relocated to the Port Hardy area by the Department of Indian Affairs (as it was then called) in the 1960s, are now trying to do the same thing.

Blunden Harbour, on the BC mainland, was a thriving community for many years and the site of a noted carving school. One of the noted west coast artist Emily Carr’s most famous paintings, Blunden Harbour, which was painted in 1930, is based on a 1901 photograph of totem poles in front of longhouses. Sadly, Blunden Harbour was burned to the ground by the Indian Affairs Department to prevent members of the nation from returning to it after they had been relocated as part of the Department’s plan to provide better health and education services. We all know how that turned out.

Quite apart from the contentious issues of relocating native communities and requiring native children to attend residential schools, a long and sad story, the issue of where “appropriated” art should reside is a hot one these days, whether it is Indigenous carvings or the Parthenon marbles. In Canada, there finally seems to be a consensus that cultural objects should be returned to the community from which they came, as long as they can be properly cared for.

When cultural objects are returned to an Indigenous community, they are considered to belong to the entire community, rather than any one individual, even though they may have been carved by a specific artist. In the case of the Gwa’sala-‘Nakwaxda’xw, it would appear that a number of the masks were carved by Willie Seaweed (1873-1967) who resided at Blunden Harbour, known to the Nakwaxda’xw as Ba’a’s. If Seaweed’s works were protected by copyright, would his descendants have a claim against any unauthorized reproductions of his works, such as postcards or prints sold by the Royal BC Museum? In fact, did he or his estate grant permission for his works to be displayed in public, as is required by the Copyright Act? As noted by this legal website, in Canada, “the owner of copyright has the sole right to produce or reproduce a work (or a substantial part of it) in any form, and the sole right to exhibit the work in public.” (This latter provision did not become part of Canadian copyright law until the 1988 revisions, however). Is a carved mask an “original artistic work”? I think it is. Whether Seaweed had rights to his expropriated art, based on copyright law, is an interesting question. Under Canadian copyright law at the time of his death, his works would have been protected until very recently, until January 1, 2018, with the rights exercised by his estate. Of course, that didn’t happen.

I am certain that no-one cared about Seaweed’s rights under copyright law any more than they asked his permission to have his work held in the Museum collection. The current reassertion of the rights of the community over the carvings is based on general principles of fairness and reconciliation rather than copyright law, although the legalities of acquisition may in some cases be questioned, as in the case of the cultural objects seized at Alert Bay in the 1920s.

The question of how copyright laws fit with the issue of Indigenous cultural expression is not a new one. I have written about it here and here. In 2019 two Parliamentary Committees reviewing the Copyright Act with a view to recommending changes noted the impact that copyright can have on native artists and traditional indigenous expression. The INDU Committee noted, in particular, that;

“…in many cases, the Act fails to meet the expectations of Indigenous peoples with respect to the protection, preservation, and dissemination of their cultural expressions. The Committee also recognizes the need to effectively protect traditional arts and cultural expressions in a manner that empowers Indigenous communities, and to ensure that individual Indigenous creators have the same opportunities to fully participate in the Canadian economy as non-Indigenous creators.”

At the same time, in the international sphere, the World Intellectual Property Organization (WIPO) has been working on a Convention on Traditional Knowledge, Cultural Expression and Genetic Resources for many years. In May of this year WIPO will host the Diplomatic Conference in Geneva aimed at concluding an International Legal Instrument focusing on genetic resources and traditional knowledge. If this is successfully concluded, it will be the first step toward a broader convention protecting Indigenous Cultural Expression as well. Whether this will happen is another question, but work is ongoing and appears to be moving toward fruition after many years of inconclusive discussion.

Meanwhile, Canada and other countries with significant Indigenous populations are trying to come to grips with decades of cultural exploitation. While repatriation of cultural artefacts is taking place on a much larger scale today, Willie Seaweed could have done with some copyright protection for his works back in the day. Sadly, access to legal assistance was no doubt a remote possibility if not impossible when he was active as an artist. However, the fact that the Hamatsa masks of the Gwa’sala-‘Nakwaxda’xw will be going home is encouraging, correcting long-overdue justice through the repatriation of these cultural icons.

Britain Walks Away from Trade Agreement with Canada: Will Artists be Collateral Damage?

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Canadian visual artists, who have been hoping for the establishment of an Artists Resale Right (ARR) as part of a successful conclusion to the Canada-UK Free Trade Agreement negotiations, may become collateral damage if the talks breakdown completely. As I wrote in a blog post a year or so ago (“Will the “Artists’ Resale Right” Come to Canada and the US”), it had been expected that an ARR would be included as a reciprocal obligation in the bilateral trade agreement between Britain and Canada that, until the end of this January, was under negotiation. Canada is one of a handful of countries that does not have a resale provision that allows artists to earn a small financial return from sales of their works when they are resold through galleries. The ARR exists in Britain, but British artists would welcome expansion of the regime to Canada, thus expanding its reciprocal nature and allowing them to benefit from resales of their work in Canadian galleries. For their part, Canadian artists have long pushed for the institution of a resale right in Canada and saw the trade negotiations with Britain as a likely vehicle to make this happen, especially given language in the 2021 mandate letter for the minister responsible for the Copyright Act that he should work, “…to further protect artists, creators and copyright holders, including to allow resale rights for artists.” If an ARR was included as a trade agreement commitment with Britain, as it was in the UK-Australia and UK-New Zealand trade agreements, it would require both countries to provide reciprocal benefits to artists from either country. For Canadian artists, this would give them access to ARR provisions in Britain as well as resale royalties when their works were sold in Canada, a positive double whammy.

But all this was thrown in doubt when, on January 25, the UK announced it was suspending the trade talks because of an impasse over access to the Canadian market for British cheese. After Britain’s myopic and misguided departure from the EU through Brexit, it lost the access to the Canadian market that it had enjoyed under CETA, (the Canada-EU bilateral trade and economic treaty). However, to allow time for the negotiation of a standalone Canada-UK Agreement to replace Britain’s CETA obligations and benefits, a transitional arrangement was put in place known as the TCA (Trade Continuity Agreement). The TCA is meant to bridge the gap until such time as a formal bilateral Canada-UK Free Trade Agreement can be reached. However, some of the provisions of the TCA sunset after a period of time, and one of those provisions is the allowance for British cheeses to enter Canada under the preferential EU quota. That special import provision ended on December 31, 2023.

Canada’s dairy market is highly protected under a supply management system whereby production of dairy products is controlled through production quotas allocated to a privileged few producers in order to “stabilize prices”, i.e. keep prices and thus incomes high for these producers at the expense of consumers. In my view, it is a short-sighted and counterproductive policy that benefits a small cadre of dairy producers not only at the expense of all Canadian families, but also to the detriment of other Canadian export sectors which are disadvantaged when Canada is weakened in its goal of opening foreign markets because it has to pay a price for blocking dairy imports. Yet the dairy lobby, centred in Quebec, is highly organized and influential politically. To limit competition and prevent lower priced imports from undercutting the government-sanctioned prices of the dairy cartel, Canada imposes punitive import tariffs on dairy products, including cheese. Of course, Canadians like imported cheeses as much as anyone else, so limited import quotas at manageable tariffs have been negotiated. Under CETA, the EU (of which Britain was a member at the time) was able to negotiate a “tariff rate quota” (TRQ) of 16 million kilos of cheese to Canada annually at a lower rate of duty. Cheese imports falling outside the TRQ are subject to tariffs of over 200%. However, the clock has run out on Britain’s free ride on the EU cheese quota, and negotiations to establish a new, separate quota for Britain have gone nowhere.

Both countries share some of the blame; Canada because, under domestic political pressure from the dairy cartel, it refuses to make any further concessions on dairy and Britain, because it refuses to “earn” concessions from Canada through offsetting benefits in other agricultural areas, such lowering barriers to Canadian beef exports. This is another longstanding issue. Most Canadian beef cattle are given artificial growth hormones in their feed. Britain refuses to allow imports of beef treated with artificial growth hormones, in company with the EU. Growth hormones are commonly used in many beef growing countries (Canada, US, Australia for example) to enhance production without any apparent negative impacts on human health, but there is consumer resistance to hormone-enhanced beef in Europe. Both Canada and the US export hormone-free beef to the EU, but certification can be cumbersome and costly, negatively impacting costs and export volumes. Canada and the UK are now caught up in the same issue. Whatever the rights and wrongs (and this is often in the eye of the beholder), in an attempt to pressure Canada, British negotiators have now suspended negotiations.

Normally, one would consider this as a negotiating tactic and would expect negotiations to resume at some point. This is of course a possibility, something that would be welcomed by the artistic community if it gets the agreement back on track. But Canada and the UK have already agreed on another set of binding commitments that will bring predictability and tariff free trade in many areas through their joint membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), in company with ten other states. The Artists Resale Right does not figure in the CPTPP.

Although the CPTPP framework will not resolve the issue of access for British cheese or Canadian beef it, along with the parts of the Trade Continuity Agreement that remain in force, may provide a sufficient framework for continued UK-Canada trade and investment. And if that happens, the artistic sector will have been left by the wayside as roadkill.

It is too early at this stage to say what will happen. Of course, the Canadian government could decide to introduce a resale right without any reference to Britain or a bilateral trade agreement, but trade negotiators have a way of hanging on to “coinage” (what the other side may consider as a concession) in the event that it may need to be used on a future occasion. If this is the case, the ARR may be held hostage to the UK-Canada standoff over dairy, and Canadian visual artists will become yet one more victim of Canada’s ridiculous supply management system. That would really cheese me off.

Hugh Stephens Blog

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Britain Walks Away from Trade Agreement with Canada: Will Artists be Collateral Damage?

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