Month: December 2022

As year-end approaches, I like to look back at the main themes that emerged over the past 12 months affecting copyright, creators and the content industries, drawing from my blog posts throughout the year. Some of the same issues I highlighted last year, such as payment to news content providers by online news aggregators (Google) and social media platforms (Facebook) for use of news content, and the education fair dealing exception that has decimated the educational publishing market in Canada, are still very current—and unresolved. The biggest new issue that emerged in 2022 is generative AI, presenting considerable challenges from both a copyright and ethical perspective while offering new applications to assist in creative writing, composing music and producing art. Authors and publishers also continued to wrestle with the issue of digital licensing and the end-run on copyright mounted by proponents of “Controlled Digital Lending”. Finally, progress was made on one particular copyright-related issue, implementation of copyright term extension in Canada, bringing the duration of copyright protection into line with that of the US, EU, UK and Australia, among others, along with a commitment by New Zealand to do so in future.

Generative AI and Copyright

The big story of 2022 was the emergence of generative AI, especially AI generated art. It was only in July of this year that OpenAI’s DALL-E text to image generator was made available to the general public in a beta version. Then on August 22, Stability AI’s tool, Stable Diffusion, was released to the public, at no cost, with no barriers and, significantly, no content controls. I was a little slow off the mark (after all, it was late summer, and I was at the cottage) but I got around to writing about this phenomenon in October (“AI and Computer-Generated Art: Its Impact on Artists and Copyright”). This technology raises several questions from a copyright perspective, not to mention a range of ethical issues arising from the potential for abuse from misuse of AI generated images.

The copyright related concerns come from both the inputs and the outputs of the technology. On the input side, the models are based on the ingestion of literally millions of examples scraped from the internet by internet-indexing projects such as Laion, a research-based “non-profit” based in Germany. Many of the ingested images are works protected by copyright–designs, paintings, photographs, just about anything available online–whether watermarked and protected or not and all without permission from the rights-holder. While Laion claims to be a non-profit motivated solely by the “democratization” of machine learning, the fact that it sells its data to outfits like Stability AI (a process often referred to as “data laundering”) has raised questions as to its degree of altruism.

Whether this form of ingestion is infringing from a copyright perspective remains to be seen. Its proponents in the US claim it falls within fair use parameters, even though the copying is unlicensed while licensed databases exist, and despite the fact that in some cases the results of the AI generated product act as substitutes (or have the potential to act as substitutes) for the original work, in effect displacing the original. In other countries, the legality of this kind of text and data mining (TDM) is questionable. The UK is currently floating a process to open up TDM and create a broad exception allowing its use for any purpose, while denying rights-holders the ability to opt out or license their works. I wrote about this dangerous proposal (“Britain’s Proposed Approach to Text and Data Mining (TDM) for AI: How Not to do It (A Lesson for Canada and Others)”, highlighting it as a negative example for Canada and others countries contemplating legislating a TDM exemption. It has been vigorously opposed by British cultural entities and associations. While arguments can be made for a limited TDM exception for non-commercial research purposes where licensed alternatives do not exist, the kind of TDM exception proposed by Britain would throw out the baby with the bathwater, sacrificing the interests of rights-holders on the supposed altar of AI “innovation”. Just about the only country that has implemented this kind of broad TDM exception is Singapore—and it is probably fair to say that Singapore has a lot less invested in its cultural industries than the UK, or Canada, or many others. In the face of widespread pushback, the UK government is reportedly reviewing the proposal and may go back to the drawing board. This has not stopped some proponents of wider exceptions and weaker copyright protection from advocating for a new international treaty that would allow for broad TDM exceptions. This will be an issue to follow in 2023.

Quite apart from copyright questions relating to the inputs used by the AI application, there are all sorts of questions related to the outputs, i.e. the content produced by the technology. Are the AI-generated works subject to copyright protection if they are a result of upstream infringement? Are they sufficiently original to qualify? What if there is no meaningful human intervention in their creation? All these issues remain to be worked out.

Finally, quite apart from copyright considerations, there can be serious ethical issues related to AI generated content. Unless carefully moderated, the technology can and is being used by some to create abusive images, some sexual, some violent, or to misappropriate a person’s image or publicity right. There are already many forms of online abuse, and generative AI adds to the possibilities. As I wrote last week, “AI Generated Art: Another “Technical Breakthrough” Calling Out for Responsible Management and Regulatory Oversight”, if industry won’t self-regulate (and it won’t), then governments will have to do it. (“Grappling with Online Safety Legislation: How to Hold the Platforms Accountable”)

E-Book Licensing

Another challenge faced by rights-holders in 2022, in this case authors and publishers, was the challenge to e-book licensing mounted in several US states, along with the issue of “Controlled Digital Lending”. In February I wrote about a new law passed by the Maryland state legislature imposing a compulsory license requiring publishers to license e-books to public libraries at a price to be determined by the government.  (“Books, e-Books, Authors, Publishers and Libraries: A Complex Relationship”). Apart from being a violation of the US Constitution, which reserves copyright legislation to the US Congress, the Maryland law was an egregious seizure of property. The Association of American Publishers sought an injunction to halt implementation of the legislation, relief that was ultimately granted. That has not put the issue to bed, however. Copyright opponents, sadly including some in the library sector, are trying to extend the “first sale doctrine” (referred to as “exhaustion” in Canada) to digital copies of works.

Under a first sale doctrine, once a work is purchased it can be used in whatever way the owner wishes without further reference to the rights holder (except for copying). The best example is a hard copy book which can be resold or loaned without reference to the rights-holder, although it cannot be reproduced except in accordance with fair use or fair dealing limitations or under licence. Licensed digital editions of works are different from works that are sold. They are licensed for a specific time or for a specified use under certain conditions. They are not “sold”, and the licensor (publisher) retains certain rights as to the use of the licensed work. In the case of libraries, most publishers make available under licence a predetermined number of digital copies that may be loaned for a set number of times. From a publishers’ perspective, there are good reasons for these limitations; for example, the fact that a digital copy never wears out and thus never has to be replaced, as well as the elimination of the “friction” associated with physical borrowing. This “friction”, the nuisance elements associated with having to collect and return a book, is one of the factors that lead many people to purchase rather than to borrow. An e-book is a different product from a physical book, with different market characteristics. The producer of that work, the publisher, is entitled to determine the terms on which it is made available to the public. And this is where “Controlled Digital Lending” (CDL) enters the picture.

Controlled Digital Lending

CDL is an unproven theory interpreting copyright in such a way that libraries are free to make and lend a digital copy of a book as long as they have legally purchased and retain a physical copy of the same work. It is very popular in the library community because it allows these institutions to bypass the e-book licensing process. On its surface, the theory can seem plausible (only one digital copy can be in circulation for each physical copy, which is retained in storage, and a digital copy has to be “returned” before it can be reloaned.) However, an “inconvenient fact” is that for CDL to take place, an unauthorized digital copy of a work has to be made, a copy which can then compete with the authorized, licensed, digital version of the work in the form of an e-book. Although digitization of works is authorized for libraries, museums and archives under copyright laws in most countries for specific purposes, such as historical preservation, obsolescence of technology, etc, it is not okay to simply do an end run on a licensed product. In fact, in Canada the copyright exception for preservation is explicitly ruled out if an appropriate copy is commercially available. A lot has been written by academics to justify the CDL theory, but it has never been tested at law. This is about to change in 2023 with Hachette v Internet Archive (IA).

Hachette is the lead plaintiff along with several other publishing houses, supported by the American Association of Publishers, in a case against the Internet Archive (IA) regarding Controlled Digital Lending. The origin of the case lies with the decision of the Internet Archive to lift all CDL controls on its online Open Library during the initial phases of the COVID pandemic in early 2020 in order to create a so-called “National Emergency Library”. The Archive, which has as its core business the digitization of documents and books as well as archiving websites and television programs, brands itself as a “non-profit library”, although it is not really a library at all. In effect, in 2020 the IA unilaterally made available thousands of copyrighted works without authorization, discarding even the fig-leaf of Controlled Digital Lending. Not surprisingly the publishers sued for infringement. The IA then wound up its Emergency Library, but the suit has proceeded and is now before the Southern District Court of New York. The Internet Archive has established a branch in Canada. A number of Canadian university research libraries subscribe to the theory of CDL and have made their collections available to the IA for digitization. It will be interesting to see how this issue plays out in 2023 in both the US and Canada.

Copyright in Canada: Lots of Unfinished Business

On the copyright and content front in Canada, there is lots of unfinished business. In my first blog post of this year (“What Lies Ahead for Canada in 2022 from a Copyright and Content Perspective?”)  I outlined the considerable “to do” list; Copyright Act amendments; Broadcasting Act amendments to incorporate streaming content (the Online Streaming Act); payment for unlicensed use of news content by internet platforms (the Online News Act) and digital safety legislation (the Online Harms Act). Of this list, only one subset was actually achieved, an amendment to the Copyright Act to extend Canada’s term of copyright protection. No other action has been taken to date to update the Copyright Act despite a commitment in the 2022 budget speech to do so. (“Copyright References in the Budget: Good Intentions Are Welcome but Early Action is Needed”). As a result of this lack of action, a coalition of 25 author, publisher and copyright groups held a “Day of Action” in late November to urge the government to follow through on its commitment to “ensure a sustainable educational publishing industry, including fair remuneration for creators and copyright holders”. (“The “I Value Canadian Stories” Campaign: Time to Get Serious About Copyright Reform”).

As for the Online Streaming Act (Bill C-11), Online News Act (Bill C-18) and the Online Harms legislation (not yet introduced), they are still works in progress. The public discussion paper for the Harms legislation attracted plenty of negative commentary, leaving the government to go back to the drawing board to take account of the input. It should be introduced in 2023 while C-11 and C-18 should complete the Parliamentary process next year. (C-11/Online Streaming has cleared the House of Commons and is currently being reviewed in the Senate, with the Committee process now complete, while C-18/Online News has completed Committee review in the House and passed third reading just prior to the Christmas break. It will now be reviewed in Committee by the Senate). All have controversial aspects and will be watched closely by copyright stakeholders in 2023. It promises to be an interesting year on a number of fronts–AI generated content, Controlled Digital Lending, and copyright updating and related legislation in Canada. Stay tuned.

© Hugh Stephens, 2022. All Rights Reserved. 

A quarter of a century ago, the internet was going to bring us wonderful things. The hubris of Silicon Valley was incarnated in the cyberlibertarian rantings of so-called internet guru John Perry Barlow and his “Declaration of the Independence of Cyberspace”. The hi-tech whiz kids actually began to believe in their own infallibility and in the innate goodness and benefits of cyberspace. They had drunk so much of the Kool Aid their eyes were orange. Any reasonable restraint placed on the internet was deemed to be a stifling of innovation and a violation of free speech. The internet was going to be liberating, democratizing, enhance creativity and our quality of life, spawn new industries and on and on. The constraints of the offline world, the laws and regulations that help balance society and keep excesses in check, were argued to be inappropriate for this new world.

Section 230 of the Communications Decency Act of 1996 was passed at the time, with lawmakers unaware how loosely it would be interpreted by the courts. This is the much-misused piece of legislation that internet platforms in the US have hidden behind to avoid any civil legal responsibility for malicious, defamatory and otherwise illegal content on their platforms, whether they are aware of that content, promote that content or refuse to take any action to delete or moderate that content. Section 230 has been widely recognized to be in need of amendment, despite the supposedly transformative role that professor and journalist Jeff Kossoff gives it in his recent book, “The Twenty-Six Words That Created the Internet”. Those 26 words (“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider”)–which constitute the formula that has immunized the platforms from civil liability for harmful material on their platforms–has been largely responsible for some of the most negative aspects of the internet.

Some of the internet hype back in the 1990s was true, but a lot was not. There is no question that the internet has brought about a huge transformation in the way we communicate, disseminate information, buy and sell, and even think. Unfortunately, as noted above, it has come with a lot of collateral damage. When this occurs, it is the role of legislators and regulators to mitigate the harm, to establish guardrails, to amplify the good while minimizing the bad, in short, to protect society, because we have learned that the industry cannot be trusted to do so on its own volition. We are now on the cusp of that situation when it comes to generative AI, including AI generated art.

Several commercial platforms that convert text prompts entered by users into images that resemble art or photography are becoming more widely available to the general public, as I discussed in this earlier blog on AI-generated art. This technology poses two major issues from a copyright perspective. First, to generate their images, the AI machines ingest without permission a vast number of images scraped from the internet, many of them protected by copyright. Without the raw material produced by human artists, the algorithms would not be able to generate anything that resembles human-produced art. Yet at least some of this AI-generated output is likely to compete in the market with the works of artists who unwittingly fed the AI machine. The unauthorized scooping of copyrighted content not only destroys any potential market for licensing content for data mining purposes, it also threatens to destroy the livelihood of many current artists, designers and illustrators. Whether this is legal is still to be determined. In the US there has been no clear fair use ruling that would permit this vacuuming up of copyrighted content. In other countries, text and data mining exceptions either do not exist in copyright law (as in Canada) or are restricted to non-commercial research purposes (as in the EU). As AI develops, the rights of creators must be kept in mind and protected.

A second copyright concern, at the moment largely theoretical but soon no doubt to be real, is the question of who exercises copyright over AI-generated works. It is accepted in almost all jurisdictions (the UK is an exception) that for a work to be granted copyright protection, it must be fully or partly created by a human, along with the other normal attributes required of a copyrighted work (originality, creativity and fixed in a material form). Even if AI assists in the creation of the work, there must be a “human hand” in control. In fact, the US Copyright Office recently questioned the copyright registration of a graphic novel, requiring the applicant to demonstrate that there was “substantial human involvement” in the creation of the work, after artist Kris Kashtanova went public stating that she had obtained a copyright registration on her fully AI generated graphic novel, thus creating a precedent. (She hadn’t). The USCO subsequently stated it would cancel her copyright and she is now appealing, claiming that she was the artist after all, albeit “assisted” by AI.

There is yet another copyright angle to creation of art through AI that has been explored by copyright blogger David Newhoff. He has examined the question of whether the crafting of “prompts” to generate art through AI could be considered sufficiently original and creative to qualify for authorship, and thus copyright protection. He is prepared to consider that a carefully constructed prompt might qualify as an original literary work, much as a line of code in a software program might qualify, but not the resulting work because that is the work of the algorithm, not the person creating the prompts. The Infolaw blog in the UK has also carefully considered this question. There are no straightforward answers.

While these copyright questions remain to be resolved, equally serious generative AI issues arise from the way in which the final work is used and the nature of the content it incorporates. Coming back to my original premise that the internet cannot be left on autopilot and expected automatically to become a force for social good, the same is true for generative AI, especially AI generated art. While generative AI has the potential to save time and money for business and creators and even improve content, there is also plenty of potential for abuse. This is surely going to happen unless the enablers of this technology establish some rules. You can easily imagine how the technology could be misused, producing everything from misappropriated personal images doing undesirable things to manipulated images putting people, including prominent people, in situations and places where they have never been, not to mention copyright infringement and a host of other abuses. There are already reports of videos of ISIS beheadings and non-consensual porn powering AI generated art. And the sex industry is no less present in the world of AI-generated content than it is in other facets of the internet as reported by TechCrunch, which profiled a new, AI enabled site devoted exclusively to porn, Unstable Diffusion.

Because of the potential for abuse, platforms such as OpenAI and Midjourney have built in guardrails, various filters and controls that will constrain (but probably not entirely prevent) misuse of generative technology. Google, which is developing its own platform, Imagen, is holding back public release for now until it can figure out how to ensure appropriate use. However, Stability AI’s platform, Stable Diffusion, which is open source and free to the public, launched with no such controls. According to the New York Times, Emad Mostaque, the founder and chief executive of Stability.AI, has pushed back on the idea of content restrictions, arguing that “radical freedom” is necessary to achieve his vision of a democratized AI untethered from corporate influence. Mostaque is quoted as saying, “We trust people, and we trust the community”. This is a disaster waiting to happen.

Does Mostaque’s attitude stem from naïvité, or just irresponsibility? I would call it both, plus arrogance and maybe some crass commercial advantage. This laissez-faire, “let it all hang out” attitude will inevitably result in “the community” (or fringe parts of it) abusing the technology, but it will also give Stability AI some additional market share. Even though some platforms have tried to set guardrails, the nature of the industry is that, in the end, the standard is set by the lowest common denominator. Already OpenAI is modifying some of its early controls as a result of Stability AI’s lack of discipline. The inevitable abuses may result in the hammer of legislation being brought down, despite Mostaque’s ramblings objecting to control by big tech, or governments. Generative AI won’t just stop at still images. Mostaque is already talking about extending it to video, audio and other formats. Music is the next creative industry to face the AI challenge. Given the speed at which this technology is developing and being rolled out, with very few controls and limited screening of content, the law of unintended consequences will be quick to assert itself.

If AI platforms have no responsibility for the content they enable users to create, just as internet platforms enjoy immunity in civil law from the consequences of the content they enable users to distribute, the benefits of the technology could well be outweighed by its negative side-effects. The latest AI-enabled application to cause concern is Lensa, a Stable Diffusion powered tool that takes your selfies, retouches them and produces an art image with a version of you. Teenagers love it. But not only are users giving away their facial data, which could be misused, the images that Lensa generates from the Stable Diffusion database are often overly sexualized or misogynistic.

Despite all the concerns, there were some signs at the end of last month that the “responsibility” message may be starting to seep through, or at least awareness that there could be some legal consequences. In November, Stable Diffusion tweaked its model to remove the ability to mimic specific artists or to generate nude and pornographic content and realistic portrayals of celebrities. Perhaps Mostaque’s unlimited trust in people and “the community” was tempered by a dose of reality? Yet when there was pushback from parts of “the community”, Mostaque responded that because Stable Diffusion is open source, users are free to add these features back at their discretion. It seems he is more concerned with Stable Diffusion’s potential legal exposure than the impact of unrestrained applications of AI.

Some clear ground rules need to be established now, before things get out of control, rather than waiting for the inevitable abuses to occur. If industry won’t do it—and industry won’t because there will always be a new disruptive upstart seeking to gain misguided competitive advantage by ignoring the rules—then governments will have to. Even though the US Congress has been unable to get its act together to reform Section 230, governments around the world are finally waking up to the need to control online abuses. Introduction of online safety legislation is underway in the EU, UK, and Canada. Australia already has such legislation. New Zealand has developed a voluntary code. Abuses from AI generated images will have to be addressed within this framework.

If we have learned any lessons from the cyberlibertarian philosophy of some of the early protagonists of the internet (a philosophy still espoused by some, such as the Electronic Frontier Foundation), it is that the rules, incentives and punishments established by society to guide the behaviour of some for the benefit of all, apply every bit as much to the internet, cyberspace and AI as they do to other aspects of life. If, as Mostaque claims, “people” and “the community” could be trusted to do the right and sensible thing, we would have little need for the apparatus of the state other than to deliver services. Sadly, that is not how life works.  

AI-generated art is on the cutting edge of the next wave of technology-enabled abuse unless action is taken now to place some responsibility on the shoulders of the enablers. If you invent a weapon, load it, hand it to an anonymous user and show them how to fire it, you must take some responsibility for the results. We have seen it happen already with misinformation and abusive content on the internet. Generative AI is the next big challenge. Let’s make sure this time we get it right.

© Hugh Stephens, 2022. All Rights Reserved.

At the end of November, on November 29 to be precise, the “I Value Canadian Stories” coalition launched a “Day of Action”. The objective was to draw the attention of the Trudeau government, in particular the two ministers responsible for the Copyright Act, Innovation, Science and Industry Minister François-Philippe Champagne and Heritage Minister Pablo Rodriguez, to the need to move urgently on promised copyright reform.

The coalition came into being in 2017 and brings together over twenty-five author, publisher and copyright groups from across the country to deliver a key message: the Federal government must restore fair compensation to creators and publishers for the use of their works by the education sector.

This is an issue I have written on multiple times. It goes back more than a decade when the elementary, secondary, and post-secondary education sectors in English Canada began to opt out of licensing content from the collective society representing authors and publishers, the Canadian Copyright Licensing Agency, known as Access Copyright. Instead, they developed their own “fair dealing guidelines”, using as cover the new education fair dealing exception introduced into the Copyright Act in 2012. In effect, the universities declared that the content they had previously licensed from Access Copyright was now free for the taking under the education fair dealing exception. For the most part, they simply stopped acquiring and paying for licences, depriving authors and publishers of substantial revenues, in effect requiring the educational publishing sector to subsidize Departments of Education and institutions of higher learning. In Quebec, most educational institutions continued to pay for licences from Access Copyright’s Quebec counterpart, Copibec, with the exception of Laval University. The result in both cases was litigation. In Quebec, eventually, Laval settled with Copibec. Unfortunately, Access Copyright was not able to achieve the same outcome in its area of jurisdiction, the rest of Canada.

The Access case (against York University) eventually went all the way to the Supreme Court of Canada (SCC) which delivered a damaging decision in July of 2021.  While not accepting York’s claim that its copying practices were fair (although also not ruling that they weren’t), the SCC upheld a decision by the Federal Court of Appeal that had overturned a key aspect of an earlier court ruling that had gone in favour of Access Copyright. The original decision not only found that York’s dealings were unfair, but it required York to pay the interim “mandatory tariff” for copying published materials in Access Copyright’s repertoire.

This “tariff” (royalty payment) had been established by the Copyright Board of Canada, a quasi-judicial administrative agency whose role is “to establish fair and equitable tariffs and licences through timely and fair processes”, including setting tariffs in situations where a collective society and users cannot agree on royalties. The Board’s intervention had been invoked because many post-secondary institutions (including York) had declined to obtain a licence from Access Copyright for reproducing content that the copyright collective represented even though they were reproducing material from the collective’s repertoire. Access Copyright sought to enforce the interim tariff established by the Board against York in the Federal Court, which found that the interim tariff was enforceable. However, York appealed, and the Appeal Court ruled that tariffs set by the Copyright Board are enforceable only against users who willingly agree to be bound by the tariff. This decision, upheld by the SCC, has in effect undermined the principle of collective licensing of published materials in Canada.

If this is all rather complicated and “inside baseball” to most people, suffice to say that as a result of the SCC decision, authors and publishers are now urging the government through Parliament to fix the loophole in copyright law that has led to this outcome. The root of the problem is the ill-considered decision to include “education” as a fair dealing exception when the Copyright Act was updated in 2012. When combined with the SCC’s decision reversing the previously-accepted interpretation of the mandatory tariff regime, we have a perfect storm of bad news for authors and publishers, and for collectives like Access Copyright.

That is the story behind the “I Value Canadian Stories” campaign. Earlier this year, in the 2022 Budget document, the Trudeau government provided some measure of hope that the problem would be fixed, but to date there has been no action. I wrote last week (“It’s Official! Canada Extends its Term of Copyright Protection”) about one of the two copyright references contained in the budget document. That provision announced the fulfillment of Canada’s commitment in the USMCA/CUSMA trade agreement to extend its term of copyright protection by twenty years. An amendment to the Copyright Act to this effect was subsequently incorporated into the Budget Implementation Act, omnibus legislation that bundled a number of unrelated legislative issues, including copyright, into the budget bill for administrative and legislative convenience.  Since this was a very limited and targeted amendment to the Copyright Act which did nothing to redress the problems described above, the budget bill also contained the following wording as reassurance to the copyright community:

“The government is committed to ensuring that the Copyright Act protects all creators and copyright holders. As such, the government will also work to ensure a sustainable educational publishing industry, including fair remuneration for creators and copyright holders, as well as a modern and innovative marketplace that can efficiently serve copyright users.”

That was a useful statement–but since then nothing has happened, and creators and publishers continue to be denied payment when their work is copied in educational institutions outside of Quebec. The one-off amendment to the Act to extend the term of copyright duration has now been done, driven by the deadline built into CUSMA, but of the broader amendments needed to fix the education loophole (as well as to address a number of other copyright-related issues about which there has been Parliamentary review as well as discussion papers circulated for public comment), there has been not a word. In principle, the Copyright Act was due for an update five years after the previous revisions, in other words in 2017. Two years after that, two Parliamentary Committees held hearings to review aspects of the Act, and made a series of recommendations, some of them contradictory. Since then, there have been discussion papers on issues such as artificial intelligence, online intermediaries, text and data mining, orphan works and so on. The pot is starting to bubble, but there are still no signs that the government is ready to introduce legislation.

The ”Day of Action” was undertaken by writers and publishers groups from across Canada. Quebec writers’ and publishers’ associations were particularly active during the “Day of Action”, even though Copibec and Laval reached an accord on licensing in 2018. What explains the continuing interest of Quebec-based authors and publishers? First, they are denied payment of education royalties in the rest of Canada in the same way as Access Copyright’s members are short-changed. Second, they are concerned that Quebec educational institutions could follow the lead of universities in the rest of Canada and stop paying creators and publishers by walking away from licensing agreements. Not being a legal requirement, it could be renounced in future.

Lobbying took place on Parliament Hill on November 29. Blank books were distributed, graphically underlining that this could be the fate of the publishing industry in Canada in future if the royalties issue is not resolved. The decline in revenues to the industry from educational institutions has been staggering, estimated at over $200 million since 2012, with  four educational publishers ceasing operations in either the K-12 or post-secondary sector in Canada, and others shifting out of production of Canadian educational materials for Canadian students.

The campaign featured individual writers with their works, and a letter writing campaign to Minister Champagne. It was a reminder that the creative community expects the government to follow through on its commitment to “ensure a sustainable educational publishing industry, including fair remuneration for creators and copyright holders”. One way in which this could be done would be to narrow the education fair dealing exception so that it applies only when a work is not commercially available, as per the Recommendation (#18) made by the Heritage Standing Committee in its report “Shifting Paradigms.

The Trudeau government needs to get moving. Although in a minority situation, its “confidence and supply” agreement with the opposition NDP should give it two plus years to update the Act, and redress the injustices introduced a decade ago. If Canada’s educational publishing sector is to survive, if Canadian students are going to be provided with culturally relevant content as part of their learning, and most important, if Canada’s authors and writers are to be dealt with fairly and justly and be provided with the financial means to continue to create Canadian stories, the Copyright Act needs to reflect these priorities.

As the campaign letter to the government stated so succinctly:

“Fix the Copyright Act now. Save the livelihoods of Canadian creators and publishers. And put a stop to great Canadian content disappearing”

© Hugh Stephens 2022. All Rights Reserved.

The announcement itself was a bit of an anticlimax. It was something that had been in the pipeline for months but until the publication of the Order-in-Council dated November 17 (released on November 23), it was still hanging as a piece of unfinished business. The wording was short, if a bit convoluted:

Her Excellency the Governor General in Council, on the recommendation of the Minister of Industry and the Minister of Canadian Heritage, under section 281 of the Budget Implementation Act, 2022, No. 1, chapter 10 of the Statutes of Canada, 2022, fixes December 30, 2022 as the day on which Division 16 of Part 5 of that Act comes into force.

Here is my translation of the legislative-ese;

“The Canadian government has finally pulled the trigger on the implementation of legislation that amended the Copyright Act to extend the term of copyright protection in Canada from “life of the author plus 50 years” to “life of the author plus 70 years”, with effect from December 30, 2022.”

This amendment had been enacted as one of the numerous unrelated pieces of legislation bundled into the omnibus 2022 Budget Implementation Act introduced on April 7. It was, as I wrote at the time, “The Copyright Needle in the Budget Haystack”. That Act finally passed Parliament and was given Royal Assent in June of this year but the provisions of the legislation relating to copyright were not officially “proclaimed” (put into force) until the release of the November Order-in-Council, bringing the amendment into force on December 30, 2022.

The change was made as a result of  a commitment made by Canada to the US and Mexico in the updated NAFTA agreement, the USMCA (referred to as the CUSMA in Canada). The text of the CUSMA required that Canada bring the extended term into effect no later than 2.5 years after the date of implementation of the new NAFTA Agreement, which was July 1, 2020. In other words, the extension of Canada’s copyright term of protection had to be brought into effect before the end of 2022.

Initially, it was not clear what form the provision would take. Copyright opponents lobbied to have an obstacle placed in the way of a straightforward extension by adding an “opt-in” provision in the form of a registration requirement imposed on the rights-holder in a narrow window before the original term of “life plus 50” expired. Failure to pro-actively assert the right to extension would result in copyright protection lapsing under the current “life plus 50” rules. As I pointed out in an earlier blog posting (“The Anti-Copyright Hyperbole Fails to Sway the Canadian Government”), this was a really bad idea. No other country has ever done this when implementing copyright extension. To do so would probably be a violation of Canada’s commitments under the Berne Copyright Convention, would impose an unnecessary and costly burden on rights-holders, and would create an unnecessary bureaucracy to implement and maintain a registration regime. Not only would the registration trip-wire impact rights-holders, it would also lead to confusion among users because of uncertainty as to which works still fell under copyright. Finally, it could possibly have led to a trade challenge from the US which could have argued that Canada had reneged on a CUSMA commitment.

Canada is always meticulous in seeking to ensure that the US lives up to the letter and spirit of its treaty commitments. The proposed US tax credit for electric vehicles that originally was to have been limited only to US made vehicles is a recent case in point. If Canada wants to ensure the US implements CUSMA in good faith, it needs to do so itself. In short, the additional registration requirement was not a realistic option. Fortunately, and sensibly, the Canadian government refused to countenance it.

However, that has not stopped copyright opponents from dredging up this tired old proposal, and from repeating the canard that copyright extension will lock up content for another two decades by delaying certain works from falling into the public domain. They will in all likelihood also repeat the false narrative about a longer term of copyright costing Canada hundreds of millions of dollars.

Canada will now join the more than 80 countries that have implemented an extension of copyright duration. This will bring Canada’s regime into alignment with most of its major trading partners including the US, the twenty-seven members of the EU, the UK, Japan, Korea, and Australia. New Zealand has also agreed to join the new international consensus as a result of its trade agreement with the UK. Canada will now be part of this club with a harmonized term of protection.

An extended term has several advantages for rights-holders, both in Canada and abroad. First, Canadian rights-holders (authors, publishers, film-makers, songwriters, musicians and so on) will benefit from the longer term of protection not only in Canada but also in the twenty-seven member states of the EU and in the UK. This is because those countries apply the extended term (an additional twenty years beyond the Berne Convention minimum of “life plus 50”) on the basis of reciprocity only. Canadian rights-holders will thus benefit from the full “life plus 70” term of protection for their works in the EU once Canada aligns its term of protection with the EU standard. The situation with the US is a bit different. Canadian rights holders already enjoy the benefit of the longer term south of the border, but US rights-holders are denied equal treatment in Canada. With Canada’s amended term, US rights-holders will get the benefit of the extra period of protection in Canada, and that alignment will bring about equality of treatment between US and Canadian rights-holders in both countries. There will also be a general benefit from harmonization of terms, which is one of the reasons the EU originally decided to go with the revised “life plus 70” standard.  A number of EU member states either had terms that were shorter than “life plus 70” or longer, leading to a patchwork quilt of protection regimes and legal confusion. Harmonization with the EU was also the primary reason the US adopted a longer term in the 1990s, not to give the Walt Disney Company longer protection for the original Steamboat Willie cartoon, as copyright detractors love to pretend.

In its consultation paper on copyright extension, the Canadian government laid out the benefits of copyright extension from the perspective of its supporters;

“A longer general term of protection will increase opportunities for Canadian rights holders to monetize copyright-protected content, thereby encouraging investment in the creation, acquisition and commercialization of such works. It will also harmonize Canada’s general term with that of our major trading partners, allowing Canadian rights holders to compete internationally on a levelled playing field.”

It also noted that “user stakeholders” had expressed concern about the twenty-year hiatus in works entering the public domain once the copyright term is extended. Works that would have fallen into the public domain in Canada on January 1, 2023 will now enjoy an extra twenty years of protection. While this had led to some hand-wringing, most users of copyrighted works won’t notice any difference. The main impact will fall on publishers, like Broadview Press in Canada, whose business model largely depends on reprinting works that have just fallen out of copyright and into the public domain. Broadview will now have to wait a couple of decades before pouncing on the next work to enter the public domain in Canada.

Economists have long argued over the modelling to determine net benefit or loss from stronger copyright protection. While a longer term for an existing work clearly carries no additional economic production incentive for the author since the work is already in existence, a longer term can provide an additional incentive for the creation of new works. Moreover, a longer term can also spur investment in existing works still under copyright through publication of new editions, and innovation in new formats including digitization, restoration and re-release of earlier works, such as films and other AV content. However, from my perspective, the most important benefit is that Canadian rights-holders, creators and creative industries, will now play on a level playing field with their competitors in most advanced nations. As of midnight, December 30, 2022, Canada will officially join the “life plus 70” copyright club. It’s about time.

© Hugh Stephens, 2022. All Rights Reserved.