The New NAFTA (USCMA/CUSMA) and Copyright Term Extension in Canada: How and When will Canada Implement its Commitment?

Now that the new NAFTA (or USMCA, aka CUSMA in Canada) has received final approval in the US Senate, that just leaves approval by the Canadian Parliament to be completed so that the new agreement can enter into force in all three countries later this year. Implementation will affect a number of areas, digital trade (Chapter 19) and intellectual property protection (Chapter 20) among them.

A couple of weeks ago, I wrote (here) about USMCA Article 19.17 , a controversial provision based on outdated US legislation (Section 230 of the 1996 Communications Decency Act) that in my view should not have been included in the text, although its final wording avoids extending to Canada and Mexico the broad civil liability shield that has allowed the big internet platforms to turn a blind eye to abusive content in the US. This week I want to focus on another aspect of the Agreement, Article 20.62 in the Intellectual Property chapter.

Article 20.62 states;

“Each Party shall provide that in cases in which the term of protection of a work, performance, or phonogram is to be calculated:

• on the basis of the life of a natural person, the term shall be not less than the life of the author and 70 years after the author’s death;
• on a basis other than the life of a natural person, the term shall be…not less than 75 years from the end of the calendar year of the first authorized publication of the work, performance, or phonogram”

If there has been no authorized publication of the work within 25 years of its creation, the term of protection shall be 70 years from the last day of the year of creation.

In other words, for works where copyright protection is measured by the life of the author plus a set period of time (which covers most works), Canada will extend its term of copyright protection from the duration of the author’s life plus 50 years (the Berne Convention minimum) to “life plus 70” by adding an extra twenty years. This longer term is the standard applied in the United States. Mexico already offers an even longer term of “life plus 100” years, so Canada is the only NAFTA country required to change legislation in this regard. For certain works such as sound recordings where protection extends for a set period after publication rather than after the life span of an author, Canada will need to extend the term of protection to 75 years (from the current 70). Canada extended the term of protection for sound recordings from 50 to 70 years after publication in 2015.

Like the language of Article 19.17, extending the term of copyright protection in the USMCA/CUSMA is not without controversy, having both advocates and critics. The artistic community and the copyright industries are generally very supportive. For example, a group of seven organizations representing various stakeholders within the music industry in both English and French Canada sent a letter to Parliamentarians endorsing the extension and urging them to implement Article 20.62 “immediately, without unnecessary delay and with no conditions.” According to SOCAN, the Canadian rights management organization that represents songwriters, composers, music publishers and visual artists;

“Adding 20 years to the life of copyright means a more robust creative sector, more Canadian cultural exports, and the growth of innovative businesses. The change will strengthen copyright, and help grow Canada’s music industry.”

Among the critics of the measure is Ottawa law professor Michael Geist, who has written more blogs opposing and denigrating a longer term for copyright protection than I can count. His most recent one puts forward the argument that while Canada has agreed to term extension in the USMCA/CUSMA, it could elect to implement that commitment by enacting an additional registration requirement that rights-holders would need to complete before they could access the benefit of the extra 20 years. But it’s not that simple. Canada is a signatory to the Berne Convention which requires that there be no registration for an artist or author to enjoy copyright protection, copyright coming into effect upon creation of the work. If Canada were to decide to implement a registration requirement to cover the additional twenty years, would that be consistent with Berne? It’s not clear. (And if such a system was put in place, it is also not clear whether the registration could be done at any time or only upon the expiration of the minimum life + 50 year time period).

According to Geist this would be “making the best of a bad provision”. (I would call it “making complex what should be simple”). Formal registration to obtain the additional period of protection will not only make a straightforward process unnecessarily complicated but will increase costs for rights-holders, especially individuals as opposed to corporate rights-holders. Some works entitled to the extended term could easily slip through the cracks because someone overlooked registration.

In his most recent blog, Geist repeats the unproven and widely-repeated assertion that extending the term of copyright protection will be of no value to Canada and will cost consumers as “additional royalties are sent out of the country”. This implies that only foreign rights-holders will benefit from the additional protection, which is just plain wrong. Not only will Canadian creators obtain the benefit of a longer period of copyright protection in Canada, they will gain an additional twenty years protection in those countries that apply protection reciprocally. This is called the “rule of the shorter term” and is applied by, among others, the (currently) 28 EU countries. Under this provision, while the EU applies a copyright term of life +70, this applies only to EU citizens and citizens of other countries that offer EU nationals an equal term of protection. With a lengthened period of copyright protection, some additional royalties will certainly flow out of Canada to rights-holders abroad, but by the same token additional royalties will come back to Canada and more royalties within Canada will be generated for domestic rights-holders and creative industries for investment in cultural development.

What are some of the reasons for extending the term of protection? An extended term is intended to incentivize production of creative works by offering rights-holders a longer period during which to recoup investment, and to provide an economic reward for authors and artists. For example, if a publisher or film studio can monetize an older work that is still under copyright by re-issuing it, this will generate revenues to be invested in new productions and publications. It is also intended to take into account that heirs and beneficiaries of authors and artists are generally living longer these days. (Some authors and artists produce works early in their career, and enjoy the benefits of their copyright during a long lifetime but many tend to produce their most famous works later in life, with the main economic benefit going to their estate).

There has long been a debate as to what length of copyright protection is fair and produces optimal results. The theoretical range of options for duration of copyright can range from perpetuity to no protection at all, with various possibilities in between. The argument for perpetual copyright is based on the proposition that since intellectual property is a property right like other property rights, it should never sunset. The deed on a home does not expire after a set number of years, so—the argument goes– why should intellectual property rights? The other end of the spectrum disputes the validity of any period of copyright protection, although most countries have accepted that protecting the work of creators is an important part of fostering a national culture. Only three countries (Eritrea, Turkmenistan and San Marino) are said to have no copyright laws, while at last count 177 states are members of the Berne Convention where the minimum term of protection is life + 50 years. The prevailing view is that creators are entitled to a substantial period of copyright protection although there continues to be an active debate over how long is optimal. In deciding on what is the best term of protection, an important factor to consider is harmonization of copyright rules. Alignment with the prevailing standard has a number of economic benefits.

While anti-copyright commentators will continue to try to convince the Canadian public that the costs of copyright extension outweigh the benefits for Canada—and the copyright community will continue to argue the opposite—one set of facts is indisputable. A longer term of copyright protection is becoming the international norm. The harmonization of Canada’s term with that of the US, the UK, the EU, Australia, Singapore and a number of others will not only benefit Canadian creators at home and abroad but will facilitate trade in cultural products protected by copyright by setting common standards, just as harmonization of standards in other regulatory areas reduces trade barriers. Extending the term in Canada is also the right and fair thing to do. If Canadian works are protected in the United States for a period of life + 70, why shouldn’t American works get the same term of protection in Canada? Why should publishers in Canada be able to pick off and publish in Canada (without payment of royalties) works by American authors twenty years before these works enter the public domain in the US?

It is not clear at this point how and exactly when Canada will implement the commitment of Article 20.62. When the government introduced Bill C-100 last year, the omnibus bill to implement the USMCA/CUSMA by amending relevant legislation, no amendment to the Copyright Act was included. Michael Geist reported this was because Canada had negotiated a transition period during which it intended to hold public consultations on the best way to meet the obligation, thus potentially opening the door to a two-step copyright ownership process. This would combine the automatic Berne Convention process that grants copyright upon creation (which does not preclude an additional voluntary registration process for greater clarity and certainty, something which currently exists in both US and Canadian law), with a further registration requirement to access the additional twenty-year period of protection. Such a process could run afoul of Berne and even if deemed compliant would partially negate the benefit to Canada of harmonizing to the new de facto international standard, (creating potential confusion as to which works were protected for the additional period and which were not). However this may be a compromise that the government is prepared to make to quiet the cacophony coming from the anti-copyright lobby.  Will the government throw them a bone? It would be unfortunate but politics is politics.

In any event, a new USMCA/CUSMA implementation bill for Canada will need to be re-introduced when Parliament reconvenes later this month (January 27). This will be the new Parliament elected on October 21 of last year—the one in which Prime Minister Trudeau no longer commands a majority. The legislation will not mirror exactly the bill introduced in June of 2019 since some last-minute changes were agreed to in the Agreement in December of last year in order to satisfy Democrats in the US Congress.

It remains to be seen whether the new bill will implement Canada’s commitment to extend its copyright term with effect from the date of entry into force of the new Agreement, or whether there will be a delay and some fiddling with the means of implementation.  USMCA Article 20.89.4 (c) allows Canada 2.5 years from the date of entry into force to implement the life + 70 provision (but no delay for implementing the addition five years for publication based copyright term). Having negotiated this delay, it is logical to assume that the government will use it. Whether it is done now, and given effect through the transparent and straightforward means of simply extending the term of protection from life + 50 to life + 70, (for those works where protection is measured by the life of the author) or is done in a couple of years using a less transparent and more complicated formula of requiring an additional registration to claim the extra period of protection, it will nonetheless happen. And when it does, Canada’s creative community can finally put the term extension issue aside and turn to other problems within the Copyright Act that need addressing.

© Hugh Stephens 2020. All Rights Reserved.

(Update: On January 29, the Trudeau government introduced Bill C-4, “An Act to Implement the Agreement between Canada, the United States of America and the United Mexican States”. In C-4 there was reference to amending the Copyright Act to extend the term of copyright from 70 to 75 years in instances, such as sound recordings, where the term of copyright is not measured by life of the author but by the date of publication or fixation of the work,  but there was no reference to extending the term of copyright to “life plus 70” for other works. The Canadian government will have 2 years and 6 months from the date of entry into force of the new NAFTA Agreement to implement that change. The date of entry into force of the Agreement is unknown at this point as C-4 has yet to be passed by Parliament. During the 2 1/2 year transition period, the government will also be responding to the recommendations of the two Parliamentary committees that examined the Copyright Act, and will likely bundle CUSMA implementation of copyright term extension with its response to the recommendations of the INDU and Heritage Committees.)