Month: December 2021

It seems as if it was only a few weeks ago that I was writing a similar summary for 2020, the “annus horribilis” when COVID first hit us, but in fact it was 51 weeks ago yet many of the same pandemic and copyright-related issues that I wrote about last year are still with us, albeit in somewhat modified form.  This time last year, creative industries were just starting to come out of a series of lockdowns that decimated many genres, especially those involving live performances. Others were making the transition to “virtual” performances and delivering content online. The early rollout of vaccinations gave hope that 2021 would be a better year, one where we turned the corner on the pandemic. That seemed to be generally the case until the Omicron variant reared its head in late November and now, at the time of writing, we seem to be going backwards again.

There is no doubt that 2021 was a challenging year for creators, although there were some bright spots. At the end of December 2020, in the United States the CASE Act became law. This legislation finally provides a simple means for individual rights-holders to enforce their rights in the US without necessarily resorting to litigation. A three person tribunal, the Copyright Claims Board (CCB), will be established within the US Copyright Office to deal with small copyright claims, potentially avoiding costly and lengthy litigation, assuming both parties agree. That’s the good news. The not-so-good news is that establishment of the CCB has been delayed beyond the expected date of implementation, December of this year, to 2022, in order to ensure that all runs smoothly. Still, a few months delay for this alternative dispute resolution forum for small copyright claims will be worth the wait.

Online Platforms vs News Media Providers

Australia

One of the big stories in 2021, echoing developments a year earlier, was the issue of payment to news providers for use of their content (snippets, headlines and small excerpts) by online news aggregators and social media platforms. While the issue is still unfolding in several countries, there were significant developments on this file in 2021 in both France and Australia, despite both Google and Facebook fighting long and hard against any obligation to license content from news providers. In Australia in particular, this pushback took the form of attempts to mobilize Australian public support against the Australian government, forcing it to back away from legislation that would give the competition regulator, the Australian Competition and Consumer Commission (ACCC), power to enforce new regulations under the News Media Bargaining Code. This code requires Google and Facebook (and only them because of their market dominance) to license Australian news content that they use in their search or social media offerings. While the threat of legislation finally got Google to start negotiations with some Australian media providers, its dominant position made it difficult for news providers to negotiate reasonable terms. The Australian legislation, therefore, threatened to impose “final offer” arbitration.

Google went ballistic, but its pressure campaign failed spectacularly. Likewise, its attempt to enlist the support of the US government flopped when Microsoft stepped in and stated it would be happy to comply with Australia’s terms. In the end, determined government action resulted in an outcome that both the Australian government, Australian media and apparently Google can live with. Facebook tried its own pressure tactics, blocking all Australian news on its newsfeed in Australia. The result, which I detailed in my blog posting (“Facebook in Australia: READY, FIRE, AIM”), was a classic climb-down. Facebook retreated, restored newsfeeds, and entered into talks with the Australian government. Miraculously, they were also suddenly able to strike content deals with Australian media.

France

Likewise in France, strong government action to enforce the new neighbouring right for press publishers established by Article 15 of the EU Copyright Directive, has achieved what earlier proved impossible in both Spain and Germany. In those countries, Google either shut down or threatened to shut down Google News and kick off the platform any news providers who objected to Google’s unlicensed use of their content. In France, the Competition Bureau stepped in, fining Google €500 million for failing to bargain with news providers “in good faith”. With this “encouragement”, Google has managed to reach content deals with many French publishers, the most recent being with press agency Agence France Press (AFP) just last month.

Canada

These content deals provide an important demonstration effect for other countries in their dealings with the dominant platforms. Canada has announced that it intends to bring in legislation to deal with the issue. The mandate letter for the new Minister of Canadian Heritage, dated December 16,  instructs him to,

“Swiftly introduce legislation to require digital platforms that generate revenues from the publication of news content to share a portion of their revenues with Canadian news outlets to level the playing field between global platforms and Canadian outlets. This legislation should be modelled on the Australian approach and introduced in early 2022.”

This promise of action is at least partly in response to an active campaign launched by Canada’s news media advocacy organization, News Media Canada (NMC) this past June. NMC published an “Open Letter” to Prime Minister Justin Trudeau in many newspapers across the country urging action against the “predatory monopoly practices” of Google and Facebook.

United States

In the US, the Copyright Office has launched a study to determine whether additional copyright protections (or other measures) are needed to protect news publishers in dealing with the news aggregation issue. Earlier this month, it held a public roundtable to further air the issues. There is also legislation currently before Congress, the Journalism Competition and Preservation Act, that would provide a limited anti-trust exemption to allow US media companies to bargain collectively with the platforms. Some action seems inevitable, but whether it will occur in 2022 remains to be seen.

Access Copyright vs York University

One copyright issue that came to a head in in Canada in 2021 was the ongoing and seemingly never-ending legal dispute between the author/publisher copyright collective, Access Copyright, and York University (Toronto), with York standing in as a proxy for post-secondary institutions outside Quebec. This started out a number of years ago when York declined to renew its licence with Access Copyright for reproducing (copying into course-packs) educational materials, arguing that its use constituted fair dealing. The main legal issue was whether the “interim tariff” established by the Copyright Board of Canada for use of materials in Access Copyright’s repertoire applied to York, in cases where York’s use was not a fair dealing. In 2017, the Federal Court ruled ruled that York was required to pay the interim tariff (i.e. regulated license fee), and dismissed York’s claim of fair dealing. York appealed and last year, the 2017 decision was overturned by the Federal Court of Appeal (FCA). The FCA found that the tariff certified by the Copyright Board was not mandatory insofar as content users like York were concerned. Having found that the tariff was not mandatory, it did not rule on the fair dealing question since York’s fair dealing defence against payment of the tariff was no longer relevant.

Both parties appealed to the Supreme Court. The bombshell dropped on July 30, 2021. The Supreme Court of Canada (SCC) upheld the Appeal Court’s decision that the “mandatory” tariffs set by the Copyright Board of Canada are optional with respect to users of content covered by the tariffs. While not ruling on whether York’s unlicensed use was fair (since with the dismissal of the mandatory tariff question, there was no longer a legal dispute between Access Copyright and York), Justice Abella nonetheless launched into an extensive discourse as to whether the Federal Court in its initial finding of unfairness had taken into account the user’s rights of individual students. Despite the unequivocal finding against York in 2017 that their Guidelines had materially harmed the Canadian publishing market, the interpretive musings by the SCC add significant uncertainty to the issue of what is a fair dealing when post-secondary institutions engage in widespread unlicensed copying of educational materials for instructional purposes. 

More damaging that this, however, is the dismissal of Access Copyright’s appeal on mandatory tariffs. The SCC decision upends the basis for collective licensing in the publishing field in Canada, something that had existed for almost 30 years on the premise that the licence fees established by the Copyright Board applied to all users of a repertoire covered by the tariff. Canadian publishers are already facing dire financial challenges owing to the proliferation of uncompensated copying enabled by the addition of “education” as a fair dealing exception in the Copyright Act revisions of 2012. Now the fundamentals of the collective licensing system have been kicked out from under them. The only solution would appear to be an amendment to the Copyright Act, given that Parliament clearly intended to create a collective licensing scheme when it amended and updated copyright legislation in the late 1980s. The fact that it did so in such a way that was open to legal challenge (the FCA and the SCC reached their decision on the non-binding nature of “mandatory” tariffs by examining their origins in the 1930s) suggests that clarity of intent is needed. Review of the Copyright Act is overdue so perhaps this loophole will be closed in future amendments

Copyright Term Extension in Canada

Other amendments to the Act will be required to give effect to Canada’s commitment to extend its term of copyright protection by an additional twenty years, as per Article 20.62 of the USMCA/CUSMA. In February of this year the government launched a public consultation over how the obligation is to be implemented, which must be in effect by December 31, 2022. The consultation focused primarily on how to handle orphan and out-of-commerce works, although copyright opponents have been trying to institute a copyright registration process (an unnecessary bureaucratic obstacle and one that potentially conflicts with Canada’s Berne Convention obligations) as a condition of accessing the extra twenty years of protection. I discussed the consultation process here.

Very recently a new wrinkle has appeared regarding term extension in Canada. You would not think that copyright and electric vehicles have much in common, but when it comes to international trade, everything is linked. The Canadian government is very concerned about a proposal by the Biden Administration to offer subsidies of up to $12,500 per unit to American consumers to purchase electric vehicles. Canada is not against electric vehicles. The problem is that, as currently written in Biden’s gigantic “Build Back Better” bill, the subsidies apply only if the vehicle is manufactured in the US. Canada’s position is that this violates the provisions of the USMCA that established a North American market for automobiles, is an illegal subsidy that will impose a de facto 30 percent tariff on Canadian-made vehicles and will destroy decades of automotive industry integration between the two countries. In a worst-case scenario, if these large subsidies go into effect and apply only to US made vehicles, it could ultimately mean the end of automotive manufacturing in Canada. In an attempt to get the attention of US lawmakers before the Build Back Better bill is passed, Canada has threatened retaliation in areas that could impact US jobs, including suspending some commitments made under the USMCA. One of these is copyright term extension.

This, along with other areas of retaliation, might be sufficient to get the attention of enough US legislators to amend the legislation in this one area, especially if Canada agrees to provide a similar subsidy to Canadians for the purchase of North American manufactured electric vehicles. At the moment it is unclear what will happen. The Biden Administration looks as if it will not be able to pass the bill because of the opposition of Democratic Senator Joe Manchin from West Virginia. Manchin is an unlikely ally for Canada, but his opposition may buy enough time to be able to resolve the electric vehicle subsidy issue, thus allowing the important reform of bringing Canadian and US terms of copyright protection into alignment to proceed.

Canadian Election Brings Delays

There were other issues on the copyright front in Canada that did not get dealt with owing to the pointless election called by Justin Trudeau’s Liberals in August. When the final results were tabulated on September 20, the Liberal minority government was in almost exactly the same place as it had been in the previous Parliament. The impact on copyright and other legislation was the cancellation of all legislation in the pipeline at the time of the election call. It all needs to be reintroduced in the new Parliament, bringing in new ministers, new priorities, and inevitable delays. I will take a closer look at what is in store in 2022 in a subsequent blog posting.

Other Developments

There were many other copyright issues that I wrote about this year, and I can’t possibly summarize them all. Here are a couple. The Philippines joined the broad international consensus that blocking of offshore pirate websites is an effective way to combat piracy, and the appeal against Canada’s first site-blocking order was dismissed. Singapore updated its copyright legislation, bringing in some improvements. The changes took effect in November.

Looking Ahead

There is lots on the agenda in the coming year, in Canada and elsewhere. Stay tuned.

© Hugh Stephens 2021. All Rights Reserved.

This past October, the US Copyright Office (USCO) announced it would be undertaking “a public study to evaluate the effectiveness of current copyright protections for publishers in the United States, with a focus on press publishers.” The study, announced in the Federal Register, included a request for written submissions along with inviting stakeholders to participate in a virtual roundtable to be organized by the USCO. That roundtable was held last week, on December 9.  The inquiry was triggered by a Congressional request in response to ongoing financial challenges facing the news industry (over the past decade, a decline in the number of newsroom employees by 40 percent and the closing of one in five newspapers in the US), while at the same time online news aggregators have come to dominate the market for digital news consumers while controlling the digital ad market.

One of the concerns of news publishers is that, for many readers, the aggregators such as Google News provide a substitute for the publisher’s websites. Consumers can get sufficient information to satisfy their needs from the high-level excerpts posted by the aggregators without clicking through to the original source material. This creates a situation whereby those who invest the time, effort, and money to produce the news–not just reporting on facts but the storytelling that requires knowledge, expression and editorial decisions–derive only limited benefit while the lion’s share of audience attention, and thus ad revenue, goes to the aggregators. In effect, these platforms get a free ride. (The aggregators don’t view it that way, claiming they are providing a service to news providers by making their content more discoverable and that content providers can opt out of aggregation at any time).

While noting that current US copyright law provides several means by which news publications can protect their content, the USCO “Notice of Inquiry” reviews developments outside the United States with respect to the problem of free-riding by news aggregators. These actions fall into two categories. The first is ancillary copyright where news publishers have been given additional “neighbouring” rights, such as the exclusive right to make their work available to the public for commercial purposes. This is in addition to whatever other rights publishers may already hold under copyright such as rights to articles written by journalists, or photographs, where rights have been assigned. The press publication right is intended to provide the publishers with additional leverage in their negotiations with online platforms over the use of news content.  The poster child for ancillary rights is Article 15 of the EU Copyright Directive that provides news publishers with the right to authorize (or prohibit) reproduction of their content for two years following the date of publication. There are exceptions built into Article 15 such as non-commercial use, linking without reproduction, and limits on substantiality; individual words or very short extracts are exempt. EU member states are required to implement Article 15 in national law by mid-2022.

France was the first EU country to do so, and it is not coincidental that it is in France where a major struggle took place between news producers and Google. France backed up the provision of ancillary rights to news publishers with the application of competition law. Google was required to negotiate “in good faith” with French news providers and despite reaching agreement in January 2021 with some French publishers to pay for content, it was fined €500 million for its negotiating tactics. (Google is appealing). Recently it signed a five year deal with Agence France Press (AFP), one of the holdouts from the January deal.

The second international development noted by the US Copyright Office is the use of competition law to require negotiations between the dominant platforms and news producers. Australia is the most prominent example of a successful outcome using this approach. Both Google and Facebook dragged their feet and played chicken with the Australian competition regulator, the Australian Competition and Consumer Commission (ACCC), before finally beating a strategic retreat and reaching content deals with the majority of Australian media providers, both small and large. (For more on this saga, see here, here and here). Australia’s approach is not copyright based but it has been effective. Canada has stated that it will soon introduce legislation along the lines of the Australian model to deal with the news media/digital platform imbalance.

The USCO roundtable on December 9 brought together the “usual suspects” (aka key stakeholders) to explore the issues outlined in the Notice of Inquiry and to respond to questions posed by Copyright Office moderators. Among those represented were the News Media Alliance, Google, the Copyright Alliance, Public Knowledge, National Writers Union, representatives of the computer and telecommunications industry, academics, library representatives and legal experts. The roundtable examined a number of questions, including whether news content “scraped” by the platforms, such as headlines and snippets, was protectable under US copyright law, and if so, how fair use would apply.

Google took the position that news snippets are excluded from copyright protection, based on the “words and short phrases” doctrine spelled out in an interpretive bulletin issued by the USCO. However, Columbia law professor Jane C. Ginsburg, a noted copyright expert, demurred, arguing that the doctrine hinges on originality, not brevity. She pointed out that not only are photos, which are often included with news snippets, protected but that headlines can also be protected because of their originality. Examples were given of the same news story headlined in a number of different ways, using creativity and originality to catch reader attention. As to whether use of such snippets constituted fair use, there was considerable disagreement over how the four fair use factors would apply to such content. For those who don’t follow US copyright law, the four factors used in judging whether or not a use is fair are; the purpose and character of the use; the nature of the copyrighted work; the amount (substantiality) of the portion used; and the effect of the use on the potential market for, or value of, the work. With respect to the third factor (substantiality), both quantity and quality are considerations to take into account. As for the question of impact on the market, News Media Alliance argued there was substantial revenue diversion.

Considering that a substantial element of the USCO’s study is to examine the potential applicability of Europe’s ancillary copyright regime to the US, there was surprisingly little appetite for such a solution even from the principal potential beneficiary, the news content industry as represented by the News Media Alliance (NMA). In response to questions as to how the new press publishers right is working in Europe, the NMA’s response was that it is too early to tell. That said, it would not object if the right were extended to US content producers in Europe. At present, the new benefit is applicable only on a reciprocal basis and as a result, EU member states will not extend the press publication right to US content providers unless the US enacts a similar law. One solution proposed by the NMA is for the US to try to bring the right under national treatment if and when a US-EU trade agreement is ever negotiated. This would give US content providers the benefit of the European law even if the US failed to offer a similar provision. Any negotiations are a long way off, however.

Instead of pushing for additional ancillary rights, NMA is advocating primarily for greater ability to enforce existing copyright law as well as for an anti-trust exemption that would allow newspaper owners to be able to bargain collectively with big online platforms like Google. This exemption is currently before Congress in the form of draft legislation, the Journalism Competition and Preservation Act. If news industry to platform negotiations were to take place, they could involve not just payment for use of content but also access to audience data relevant to advertising, another concern of the publishers. With respect to existing copyright law, one area that could be improved for news publishers would be easier registration of “dynamic webpages”. Dynamic pages are the norm for news providers today, as news is continuously updated throughout the news cycle. While registration is not required to establish copyright, in the US registration is required for US citizens if they wish to bring legal action for infringement of a US work, thus difficulty in registering impedes enforcement action.

Regarding Google’s argument that news providers can opt-out of its content aggregation services, NMA’s position is that its members have neither authorized nor consented to the scraping of content by Google but opting-out is not really a choice because of the dominance of the platform. The ability to opt-out is a “Hobson’s choice”, an illusory rather than an actual choice. Either the content is buried and not found by readers, or else it is found by readers on an aggregation site but little or no benefit accrues to the content provider.

This is only a partial summation of the arguments pro and con but gives a flavour of the debate. The challenge facing news providers is complex, and likely no single remedy will suffice. There is also a wide disparity of views with–generally speaking–the internet platforms and tech companies on one side and content providers and the copyright community on the other, with other players taking various positions along the spectrum. All seem to agree that a healthy news and journalistic sector is vital to the preservation of democracy; debate centres around the source of the problems facing journalism and the solutions.

What happens next? Another round of written submissions to the USCO has been called for, due in early January 2022. After that, presumably the Office will report back to Congress with its conclusions. While the solution is not clear, judging by the submissions received so far and the discussion at the roundtable, it will likely not include establishment of a new ancillary copyright for press publishers in the US. What is clear, however, is that there are major challenges when it comes to the continued economic sustainability of professionally created and curated news sources, and the unlicensed use of news content by online aggregators is a significant part of that problem. Solutions are required. Given the ongoing efforts to come to grips with this issue in a number of countries, (and the ability of the quasi-monopoly platforms to comply when they find they have to), I find it hard to believe that the US will not be able to find a satisfactory way to ensure that news providers are dealt with fairly when it comes to the use of their content by dominant internet platform aggregators.

© Hugh Stephens 2021. All Rights Reserved

On October 22, the Malta registered giant container ship Zim Kingston, enroute from South Korea to Vancouver, lost 109 containers overboard in heavy seas off the coast of Vancouver Island. Although four containers washed ashore further north up the coast, most are assumed to have sunk. Two days later a fire broke out aboard the ship. The fire was eventually contained, with water and smoke damage to some of the remaining 1900 containers. The ship was escorted to an anchorage off the Port of Victoria, where it remained for several weeks pending a decision as to when and where to offload it. It has now been decided that it will be moved to the nearby port of Nanaimo for unloading, inspection, disposal and triage. While the containers that went overboard were known to have contained everything from fridges to stuffed toys, no one has been able to do an inventory of the contents of the containers that remain on board to see what they contain and what condition the contents are in.

Somewhere on that ship, if they did not go overboard, are 15,000 books that Orca Book Publishers of Victoria were expecting from the printers in China. The books, which Orca reports were new stock of five bestselling nonfiction titles for children, were to fill pre-holiday orders for bookstores and schools, and were expected to be on the shelf for Christmas sales. Four of the books were written by local authors. Orca is an independently owned Canadian book publisher with “1200 active titles in print and digital formats and 95 new titles each year”. It states that it prides itself on publishing Canadian authors.

Why was Orca having Canadian authored books printed in China? Printing books is expensive and in a trade with low margins, saving on printing costs is a key consideration. The savings from printing in countries like China are so great, in terms of cost of labour and materials, that even the expense of shipping does not negate the cost savings. Most publishers in Canada, the US and elsewhere outsource their printing, and much of this is done in China or Korea. This leads to situations like the one faced by Orca Books when supply chains are disrupted. Orca’s experience with the Zim Kingston is rare; most supply chain blockages are not a result of containers going into the drink, catching on fire, or the ship having to wait while it is declared safe for unloading. Yet supply chain issues abound. As reported in the Canadian Press, quoting Kate Edwards, Executive Director of the Association of Canadian Publishers;

“The trouble starts with a worldwide paper shortage, which alongside surging demand for adhesives and ink, has made the book production process more expensive and more complicated…The scarcity of raw materials has, in turn, jammed up book printers…leaving publishers jockeying for press time at premium prices…(T)he obstacles stack up further on the distribution side as shortages of workers, shipping containers and storage space cause delivery delays.”

In an industry where a sizeable share of book purchases is gift-related, missing the holiday season can be catastrophic for booksellers, resulting not just in disappointed customers (who may not return, giving up on their local bookshop to buy on Amazon) but also in a surfeit of books after the holiday season when they have lost their market appeal. I am not in the book trade, but I can imagine that it is a tricky proposition to ensure that books that suddenly gain prominence through winning awards such as the Man Booker in the UK, National Book Award in the US, Governor-General’s Literary Awards in Canada and similar awards in other countries are printed in sufficient quantity, distributed and shelf ready for the holiday season. For some reason these prizes are normally all awarded in November, leading to the Christmas scramble. Supply chain issues arising from a shortage of workers, and shipping and port holdups arising in part from COVID, only exacerbate the problem. At the end of the day, some reshoring of book printing may solve part of the problem, but closer access to local printers has to be balanced against increased costs. Supply issues are just one more problem faced by the industry, and by those who provide the industry with the content that makes it all happen, authors.

It’s a tough time to be an author. A couple of years ago, The Writers’ Union of Canada released the results of a survey showing that Canadian writers made on average $12,789 annually, about a quarter of the national average income. Figures for the US and UK are similar. Changes in technology offer some hope, especially for independent authors seeking new audiences, but any benefit is arguably more than offset by rampant online piracy of titles. And it’s not just guerrilla piracy that is the problem. Organized, widespread, “legitimized” piracy like the Controlled Digital Lending program of the Internet Archive represents a fundamental challenge to the digital licensing models of the publishing industry. It is not surprising that CDL is the subject of a major lawsuit brought in the US by several large international publishers against the Internet Archive.

In Canada, the business model for educational publishing has had the rug pulled out from under it by the recent Supreme Court of Canada decision in the cross appeal of the Access Copyright v York University case. The Court ruled that the basis of collective licensing, the mandatory tariffs certified by the Copyright Board of Canada, were not reciprocally binding on rights-holders and users. Users could decide to opt-out and decline to pay the tariff to the collective, leaving litigation by individual rights-holders as the only recourse. This presents a further challenge to writers and publishers in Canada and, as I wrote shortly after the decision was released (“Supreme Court of Canada Decision Undermines Canada’s Collective Licensing System: A Parliamentary Fix is Needed”), it would seem that the only alternative is for Parliament to remedy deficiencies in the legislation if Canadian publishing and the ability of Canadian writers to earn a living is to be preserved.

The good news is that books and writers continue to be in demand. COVID, if anything, has strengthened an interest in reading. But an interest that cannot be satisfied because the book has not arrived from the printer in China leads to frustration rather than satisfaction. As Scott Fraser, president of Canadian publisher Dundurn Press has been quoted as saying, missed sale opportunities for writers can be devastating;

“It is a major, major source of anxiety because they don’t get paid if the books don’t sell”.

All those Orca books aboard the Zim Kingston, (if indeed, they are still aboard) won’t earn their authors one penny until they are in the hands of readers. Children’s books tend to find their way into Christmas stockings and Santa only comes but once per year. Ironically, in a statement Orca Books indicated that it had been planning to phase out printing in China and the Zim Kingston shipment was one of the last to be printed there. According to publisher Andrew Woolridge;

“Earlier this year, we made the decision to transition the bulk of our printing away from printing overseas in favour of printing in Canada. There are many reasons for this shift; politically, socially, environmentally we are endeavouring to match our printing decisions more closely to our overall mandate and goals. These books were amongst the last planned printings in China and Korea”

Too bad they didn’t make the switch sooner. This was one overseas printing too many. Let’s hope that these and other books enroute, clogged in the supply chain, will get through to consumers in a timely way. Writers need the income, publishers need the cash-flow, booksellers need the customers and readers need their book fix. In a world where many books are pirated online, copied without compensation or loaned digitally without the necessary licenses, the sale of the good old fashioned bound book remains a staple of the industry. But when it is printed halfway around the world, what can go wrong will go wrong. Just ask Orca Books.

© Hugh Stephens 2021. All Rights Reserved.

Despite the welcome news that the National Library of New Zealand is reconsidering its badly flawed decision to donate 600,000 surplus books, including many still under copyright, to the controversial US-based Internet Archive for digitization, the National Library of New Zealand and the country’s librarians through the Library and Information Association of New Zealand (LIANZ)–of which the National Librarian is Past President—recently lobbed another grenade at authors. This time they are taking aim at the announcement by the New Zealand government that it intends to lengthen the country’s term of copyright protection. This measure would see New Zealand eventually–by 2036 no less (!)–get in step with most developed economies and extend its term of copyright protection for an additional twenty years beyond the Berne Convention minimum of “life (of the author)+ 50”.

(The controversial donation deal—now on pause while the National Library considers its next move—would have seen the Library effectively endorse the Internet Archive’s Controlled Digital Lending (CDL) program through the donation of 600,000 surplus books from the National Library’s collection despite CDL being the subject of a major copyright infringement lawsuit in the US brought by major international publishers.)

The opportunity for New Zealand to extend its term of copyright protection comes about as a result of the new UK-New Zealand Trade Agreement, reached in October 2021. One of the provisions of that agreement, insisted on by the UK no doubt, was that New Zealand bring its term of copyright protection into alignment with that of Britain. The “life of the author + 70” standard is the rule in the EU, UK, the US, Australia and will soon be enacted in Canada as a result of the USMCA/CUSMA. New Zealand may have regarded this as a concession but in fact when finally implemented it will benefit New Zealand authors and publishers not only in their domestic market and in the UK, but also in the EU which extends the benefit of the extra twenty years of protection only on a reciprocal basis. (The UK also applies its longer term reciprocally so New Zealand authors currently do not benefit from it). Of course, it will also benefit British authors and publishers in New Zealand, which is why the UK pushed the proposal but, given the 5 million population of New Zealand versus the 67 million of the United Kingdom, it is clear that New Zealand’s creators will derive the greater benefit.

So why are New Zealand’s librarians so critical, claiming that the term extension will result in the “locking up” of works for another twenty years. They say:

“…not only books, but films and music will be locked up for a further 20 years after the death of the authors, delaying the entry into the public domain of culturally significant New Zealand works and the creation of new works based on those works.”

This language implies that any work under copyright and not in the public domain is “locked up” and somehow out of reach of the public. Nothing could be further from the truth. Even though works under copyright require permission or licensing if they are to be reproduced, (unless the limited use of the work qualifies as a fair dealing), licensing provisions are in fact an incentive for the rights-holder to ensure that the work is given wide circulation. This is often done through derivative works, such as a movie based on a book. But according to the LIANZ,

“Early New Zealand films, television and radio shows are starting to emerge from copyright. Locking them up for another 20 years will impact on cultural institutions without the resources to source permissions to use these materials.”

Are we to understand that New Zealand films, TV and radio shows that up to now have been under copyright protection under the original 50 year term have been “locked up” all this time? What cultural institution worth its salt doesn’t have the means to apply the minimal resources necessary to obtain permission (or to license) such content? This is another “the sky is falling” scenario often employed by those who profess to respect the copyright protection and incentives provided to authors, but then go out of their way to discredit them. New Zealand is not unique when it comes to this tactic.

In Canada too opponents of the alignment of the terms of protection between Canada the US resort to similar arguments, such as characterizing copyright as “locking up” content whereas in fact its purpose is just the opposite; to incentivize creators to create and disseminate their works. Another line of argument used is the “small market” hypothesis, whereby there will be an “enormous” outflow of funds to foreign authors and publishers.

The LIANZ statement managed to dredge up reference to a 2009 study (once but no longer available on the website of the New Zealand Ministry of Foreign Affairs and Trade-MFAT) undertaken by the Ministry of Economic Development (as it was then called). The study was commissioned from Concept Economics and undertaken by Australian academic Henry Ergas. The study was part of New Zealand’s preparation for negotiation of the Trans-Pacific Partnership (TPP) which at that time included the United States. It was correctly assumed that a US negotiating objective would be to bring the length of copyright protection in TPP partner countries into line with the term in the US (basically life + 70). One of the takeaways of that study released by the New Zealand government, one that is often cited by critics of copyright term extension, was that the cost of extending the term would amount to NZ$55 million annually to the New Zealand economy. Dr. George Barker, a well-known Australia-based economist, demonstrated that those figures were wildly off base because Ergas had greatly over-estimated the purported losses, and the New Zealand government had then compounded the distortion by amplifying the miscalculations. A couple of excerpts from Barker’s report will give you the flavour;

“The New Zealand government has commissioned and used a report from Concept Economics (“Ergas”) in order to gauge the economic impact of an extended copyright term. We have carefully examined that report as well as the Government’s use of that report. We have found numerous and extremely serious errors in the report that make it entirely unworthy for the basis of any policy recommendations. Its estimates of costs are wildly above any plausible values.”

“The Government exacerbated Ergas’ misleadingly high costs by assuming, completely out of thin air, a cost of term extension for film and television that was not estimated by Ergas, and then compounded this unfounded claim by including in its cost estimate “range” a high value from the Ergas report that was contingent on a particular legal result that was known to have not occurred by the time the government came up with its range. Finally, when converting Ergas’ present value results into a yearly value, the government inappropriately used a discount rate inconsistent with that used by Ergas, a decision that increased the estimated costs from what they would have been had a consistent discount rate been used”,

There were also some basic calculation errors. In just one instance, the government had concluded that the losses in the music industry would be $17 million. Instead they should have been just $77,000, which were more than offset by gains that term extension would bring the New Zealand music industry, which Barker estimated could be worth up to $150 million annually.

Still, that $55 million net loss figure keeps resurfacing like a bad penny, and term extension opponents in Canada seized on it a few years ago to do “back of the envelope” calculations to conclude that extending the term of protection in Canada would amount to a cost of almost half a billion dollars annually to the Canadian economy! These claims were completely unfounded, and totally fanciful, as I wrote back in 2016. (“The TPP and Copyright Term Extension: What is the true cost to Canada?”).

Orphan works (works where no-one can identify the rights-holder) can be a problem, another argument trotted out by the librarians to oppose the measure. In implementing its USMCA commitment to extend the copyright term in Canada, the Canadian government is holding public consultations to examine several possible options to deal with the orphan works question;

“Option 1 — Expand Canada’s current orphan works licensing regime / extend regime to out-of-commerce works

Option 2 — Collective licensing regime(s) to facilitate use of orphan works and/or out-of-commerce works

Option 3 — Permit the use of orphan works and/or out-of-commerce works, subject to claims for equitable remuneration

Option 4 — Exception for use of works during the final 20 years of protection

Option 5 — Exception for use of works 100 years after their creation”

The Canadian government’s position paper made it clear that copyright term extension would happen in Canada but there were some options in terms of dealing with the method of implementation so as to address issues like orphan and out of commerce works. Similarly, assuming the UK-New Zealand FTA is put into effect, New Zealand will also be joining the new international consensus on the preferred length of copyright protection, although this will not happen for some time given the excessively long period for implementation of this obligation—15 years! Maybe during that implementation delay New Zealand can figure out how to deal with the orphan works issue?

There are clearly costs and benefits for everything, including copyright. It is a shame that New Zealand’s library association seems to have focused exclusively on what they see as the costs, which are themselves exaggerated and inflated. They have completely ignored any benefits, which include an economically healthier and more productive creative sector in New Zealand, although given the very lengthy period of implementation—15 years—the benefits for New Zealand’s creators will take a while to flow. But better late than never, say I. However, if New Zealand is smart, it will accelerate the process and extend its term of protection sooner.

© Hugh Stephens, 2021. All Rights Reserved