Beware the Law of Unintended Consequences: The Push for Statutory Remuneration for Korean Writers and Directors Working on Streaming Projects could do more Harm than Good


Copyright is very simple as a concept yet can be quite complex when it comes to actual implementation. This is why careful negotiation of contractual terms is important for rights-holders. The objective of copyright is to incentivize creation by giving creators control over their work so they can, among other things, determine the means of economic exploitation through sale, licensing or assignment of rights. But simple as this may seem, when it comes to complex creations where multiple contributors  are involved, such as in music, film or television productions, things can get a bit messy. They can get even more complicated when new forms of distribution, such as streaming content, are added to the mix because of the difficulty–if not impossibility–of determining accurately how much revenue is generated by a specific work. These complexities are best worked out among the various players involved through market-based contract negotiations that determine who gets paid, and how much, for their respective contributions to the overall production. The ability to freely negotiate terms allows performers, writers, and directors to get fair remuneration for their work while providing a necessary degree of predictability for the aggregator of the rights, the producer.

The process for determining remuneration for rights-holders who contribute to audiovisual streaming content projects is currently under review in Korea. Any change to the current well-established system in Korea needs to be approached with caution because audio-visual production is a globally competitive business. It’s important, therefore, to create the right conditions to attract and retain the kind of production that promotes diversity and expresses local culture.

Rights in Audiovisual Works

For AV works such as film and television productions, writers, directors, performers and composers may all be rightsholders. Film and television production is a high-risk, expensive, and complex undertaking requiring significant financing, and involving many players. Writing and directing are important, but no matter how good a story is, it won’t come into production without a producer. The producer manages the business and financial aspects of the production, including its intellectual property. This requires acquisition of all the relevant rights through contract negotiations with the respective rightsholders. These aggregated rights form the basis of productions which in turn may be sold to a studio for exploitation and distribution. Individual contracts with rightsholders may include upfront payments, bonus payments based on box office performance or a percentage of net or gross revenues (a form of royalty) in return for assignment of rights. In many cases, authors or performers often prefer payment through lump sums or buy-outs on the basis that “a bird in the hand is worth two in the bush”. Many films and productions don’t make money, some break even and a rare few are wildly successful. 

The World Intellectual Property Organization (WIPO) has an excellent summary of the role of copyright and intellectual property in filmmaking in a short article on its website, From Script to Screen, explaining how producers establish the all-important proof of title that allows them to market the production. It is important that producers, who assume the risk, be able to acquire and retain all the rights without having to face further claims later in time for compensation from creative participants who have already been paid for assigning their rights. Without such certainty, the producer or their subsequent licensees could be faced with unquantifiable and open-ended claims for additional remuneration that could make calculating the needed return on investment for the production almost impossible.

Korean Content

As is well known, the Korean content industry has emerged as a major global force in terms of creativity, production values and box office success. This is particularly true with Korean dramas in Asia but also increasingly in western markets. A good example is the Korean film Parasite that won the Palme d’Or at Cannes in 2019 and the Academy Awards (the Oscars) Prize for Best Picture in 2020. The Korean series Squid Game, commissioned by Netflix, was reported to be its most watched series worldwide in 2021. It was the unexpected success of Squid Game as a global phenomenon that is largely responsible for the active debate taking place in Korea at present over performers’, writers’ and directors’ remuneration. In particular, the Directors’ Guild of Korea has been pushing for a revision to the Korean Copyright Act to allow directors and writers to claim additional compensation–to be legally required or mandated and  managed by 3rd party collective management organizations, or CMOs–from streaming services on the theory that  there is a “significant imbalance” between the initial remuneration paid and the profits generated. This would apply despite contract provisions that have already assigned the copyright to the producer and it raises significant questions of definition and transparency with respect to the calculations.

With streaming video, individual films and television programs become part of a much larger package being offered to consumers, whose motivations for decisions to join, leave or remain a subscriber are unknown; this makes it difficult if not impossible to assign revenue value to individual works and attribute “profits” to specific content. And is it really necessary? In the case of Squid Game, for example, the market-based contract negotiation model has worked as expected. It has been reported that Squid Game star Lee Jung-jae will earn $700,000 per episode for Season 2 (scheduled for 2024), while director Hwang Dong-hyuk’s remuneration is also expected to be boosted significantly. The same will undoubtedly apply to the writing team. The creators involved have benefited from the success of the production through freedom of contract.

If mandatory remuneration rights are enshrined in Korean copyright law, particularly if these rights must be collectively managed by 3rd party CMOs, it will add to the potential financial liability of distributors of programming, which will in turn be likely reflected in diminished returns to producers and other creative participants. This could lead to a reduction in financing for, and investment in, Korean film productions and the international licensing of Korean content, imposing a significant setback on the expansion of Korean content distribution globally. In a global market, competitive forces prevail.

International Best Practice

International best practice suggests that freedom of contract and ability to freely negotiate terms for hiring of talent, whether individually or through a guild, is a successful model. This has been proven over decades of film and television production. To impose a statutory remuneration right in copyright legislation, over and above negotiated contract terms, creates additional risks for success of the work, while undermining the value of initial contracts and potentially impacting amounts paid to performers, writers, and directors through contract negotiations. What may seem like a seductive solution to generate more revenue through “compulsory residuals” may end up undermining contractual negotiations and the benefits that arise from the give and take of the marketplace. Beware the law of unintended consequences.

Korean legislators should take a big-picture view and keep Korean copyright law and practice in line with best practices. Free contract negotiations ensure that everyone in the value chain gets fair compensation while being able to tailor production-specific packages. Contractual freedom has given the industry the necessary agility to respond rapidly to new forms of distribution and consumption of content. Maintaining this system will ensure that Korean cinema and content continues to thrive.

© Hugh Stephens 2023. All Rights Reserved.

Women, Literature, and Copyright: Holding up Half the Sky (World IP Day)

Credit: Collection (Used with Permission); Artist Sun Quan (1974)

There is a well-known Chinese saying, attributed to Mao Zedong, that “women hold up half the sky”. It became one of the ubiquitous propaganda slogans during the Cultural Revolution (along with the somewhat self-justifying “we have friends all over the world”) and was part of the effort to exhort women to contribute to Chinese society in every sphere, ranging from working in steel mills to being “barefoot doctors”. If one is to look at the power structure of China today, one would have to conclude that the current generation of Chinese leaders is not paying much attention to Mao’s guidance. Of the 205 members of the Chinese Communist Party’s Central Committee, just 11 are female. There are no women among the 24 members of the Politburo, the elite “cabinet” of the Party. That means the 49 percent of the population that is female (701,475,583 females as of 31 December 2022) went unrepresented at the highest levels of political power. Not only are there 56 million more males than females in China, but the guys run the show. However, when it comes to certain fields of endeavour, Chinese women–and women who have lived in China–have left their mark. One such area is literature.

Some of the most well-known literature on China familiar to western readers was written in English by female writers who lived in China but were not Chinese. Pearl Buck and Agnes Smedley are a couple of good examples. Others were written by Chinese women with western roots or connections, yet they have left us indelible impressions of a China–romance, tragedy and life—at different historical periods. Books such as Han Suyin’s Destination Chunking (1942) or Love is a Many Splendoured Thing (1952) come to mind as do Jung Chang’s Wild Swans: Three Daughters of China. Nien Chung’s Life and Death in Shanghai is a compelling personal story of one woman’s suffering under abuse by the Red Guards during China’s Cultural Revolution. Arguably the two most influential Chinese women writers in the 20th century were Ding Ling and Eileen Chang. More contemporary writers, such as those identified in this essay (Can Xue, pronounced Tsan Shwue, Liu Yu, Di An, Zhang Ling, Lu Min, Yu Mi and Liao Yimei) are less well known but explore themes important to modern Chinese society.

I am using a male dominated society like China to make a point. Even in the most intellectually repressive environment new ideas can emerge, and often female writers are in the forefront of these developments. This ties well into this year’s theme for World IP Day (April 26) which is “Women and IP: Accelerating innovation and creativity”. The World Intellectual Property Organization (WIPO) is celebrating the role of female innovators, entrepreneurs and creators across all elements of intellectual property. WIPO states that “Women bring new perspectives and talents to the table. But there is a problem! Too few women are participating in the intellectual property (IP) system. That means too few women are benefitting from IP.”. WIPO perhaps states the obvious when it says, “We all gain from actively encouraging women to use the IP system.”

There are barriers to gender equity to be sure-social, economic, political (as we have seen in China)—and in some countries such as benighted regimes like the Taliban government in Afghanistan, even legal barriers to basic rights such as education. While not diminishing the barriers to equality of opportunity in the world of IP, I would nonetheless argue that copyright is a relative bright spot in terms of being able to assert protection for author’s rights, whether or not the author is female, male, or non-binary for that matter. A © is a © for an author, unless the author happens to be Naruto the macaque or Stephen Thaler’s Creativity Machine. Indeed, a basic principle of international copyright law (Berne Convention; Article 5.2) is that copyright exists from the moment of creation without any requirement for formalities or registration. That being the case, by its very essence copyright is gender neutral.

As I wrote in a blog post on feminism and copyright a few years ago, while the drafters of copyright laws were all “men of their times” and hardly had a feminist bone in their body, the result nonetheless was a form of property law (which unlike many other property laws at the time) that made no reference to gender. Moreover, since the 1908 revision to the Berne Convention, copyright protection must not be conditional upon compliance with any formality in any of the countries (now 181 in total) that have acceded to the treaty.  Since protection is automatic, it cannot discriminate among human authors.

Copyright laws since the 18th century have always given equal protection to “authors”, whether they be male or female. In fact, writing–protected by copyright law–provided one of the areas of artistic and economic opportunity for females (Jane Austen, George Eliot, the Brontë sisters, Louisa May Alcott and so on) at a time when so many other avenues were closed. Jane Austen earned a decent living by the standards of the period from her writing. She published some of her books on commission–thus taking on the risks of publication—but in other cases, notably Pride and Prejudice, sold the copyright, thus putting the onus on the publisher. So, while there is plenty of evidence of discrimination against females in many areas of the law, copyright was not part it. That is not to say that there may not have been inequality in the way that copyright was sometimes applied, through contract law for example, but there are also plenty of non-gender examples of authors and artists complaining of disproportionate power when it comes to negotiating contracts with their publishers.

It was not just English and American female writers who were leaving their mark on 19th century literature. Canadian literature traces its roots back to pre-Confederation times when the first examples of a distinctive Canadian storytelling tradition began to appear. Among the pioneers of “CanLit” were two Englishwomen, not dissimilar in background to Jane Austen and her peers, who in pursuit of a new life emigrated with their husbands to what was, at the time, very much the backwoods of a rough frontier colony. The Strickland family, based in Suffolk, had produced several noted female writers (six in all), but two of them left England to take up life in Upper Canada in the 1830s.

These two sisters, known to readers as Susanna Moodie and Catharine Parr Traill, continued their writing as they struggled to raise families and adjust to life in the backwoods. They produced a number of works but the most well known are probably Traill’s The Backwoods of Canada and Moodie’s Roughing it in the Bush. As the biographer of Traill and Moodie, Charlotte Gray, has written in her work Sisters in the Wilderness, “the two sisters laid the foundation of a literary tradition that still endures in Canada, the pioneer woman who displays extraordinary courage, resourcefulness and humour”.  Well known Canadian Pulitzer Prize-winning writer Carol Shields (a biographer of Jane Austen) wrote her dissertation on Moodie. Moodie also served as the inspiration for one of Canada’s best known contemporary authors, Margaret Atwood. Other prominent female Canadian writers include Alice Munro, winner of the Nobel Prize for Literature in 2013, Lucy Maud Montgomery, the creator of Anne of Green Gables, and Margaret Laurence. In fact, women have made a major contribution to CanLit. This authoritative source proclaims that six of the top ten Canadian authors of all time, and eleven of the top twenty, are women. That is holding up more than half the sky.

World IP Day has it right when it says that women bring new talents and perspectives to the table. This has been proven time and again, especially in areas such as literature and art, but also in other areas of creativity. A few years ago I wrote a blog about one of Canada’s earliest professional photographers, Geraldine Moodie, (Geraldine Moodie and her Pioneering Photographs: A Piece of Canada’s Copyright History) who captured some the earliest photographs of the Inuit people while they were still fully engaged in their traditional culture. Geraldine went to particular trouble to ensure that her works were protected by copyright in the young Dominion, ensuring they were recorded and registered with the copyright authority at the time, the Department of Agriculture. What I didn’t know when I wrote that blog post back in 2018 was that Geraldine was Susanna Moodie’s granddaughter! (The Moodie name is coincidental since Geraldine, whose maiden name was Fitzgibbon, married a distant cousin from Glasgow, John Douglas Moodie, who became an inspector in the Northwest Mounted Police).

But back to World IP Day for a moment. WIPO says that too few women are benefiting from intellectual property (IP) and the protection afforded by intellectual property laws. I have no doubt this is true but would point out that among the various manifestations of IP, copyright stands out as a pioneer by offering a non-discriminatory means for women to protect and benefit economically from their creative works.

© Hugh Stephens 2023. All Rights Reserved

Canadian Copyright Registration for my 100 Percent AI-Generated Work

Credit: author

Thank you CIPO (Canadian Intellectual Property Office). Last week I indicated in my blog post (“Copyright Registration for AI-assisted Creations: How Much AI Input is Too Much?”) that I would be seeking to register with CIPO the copyright on a work fully generated by AI platforms DALL-E2 and ChatGPT. It was a bit of doggerel verse accompanied by a computer-generated image of someone sitting on a dock at twilight. ChatGPT labelled it “Sunset Serenity”. Copyright certificate No. 1201819 issued by CIPO on April 11, 2023, arrived by mail yesterday. It registers my copyright in the following work;


What does this little experiment prove? That Canada endorses copyright registration for wholly AI generated works? Doubtful. Perhaps the conclusion is that CIPO exercises no due diligence over the process of issuing copyright registration, and simply rubber stamps whatever is submitted to it. Maybe
the process is fully automated and no human actually reads the copyright application and exercises any judgement? Another AI application? CIPO’s website notes that, “When you register your copyright, you receive a certificate…that you can use in court as evidence that you own the work.” However, it also adds the caveat that “CIPO cannot guarantee that the legitimacy of ownership or the originality of a work will never be questioned.” So, what’s the point?

Is my $50 certificate worth the parchment that it is printed on? In terms of legal precedent, clearly not. However, it points to a weakness in the current Canadian copyright registration system. With no ability to actually review what is being submitted (no copy of the work to be registered is required to be submitted with the application, and if it is submitted it is not
examined or retained), CIPO reminds me a bit of a diploma mill. Ask and ye shall receive—if you pay the fee. The certificate does not actually prove my ownership or authorship. That is automatic and if contested, would have to be proven in a court of law. The certificate is a nice wall decoration though. It
is worth recalling that CIPO is also responsible for examining patent applications and registering trademarks and industrial designs where one assumes the Office is a lot more proactive, judging by the more significant fees charged. Copyright registration seems to be a bit of an add on, without much thought given to it.

Originally, I wanted to claim ownership but list AI as the author, but the CIPO form requires the author’s address, contact details and date of death, if deceased, so instead of claiming that ChatGPT or DALL-E2 are the author I have had to content myself with claiming authorship in a work in which I put no creative effort other than to type in the following prompt;

Write me a poem in iambic pentameter involving watching the sun set over a lake in northern Ontario while I sit in Muskoka chair at my dock sipping on a cool drink, listening to the haunting cry of the loon”.

(I don’t even know what iambic pentameter is but I recall from my high school English classes that it has something to do with poetry)

I guess I did exercise some judgement when, in response to a similar image prompt, DALL-E2 served me up an image of a loon sitting in a Muskoka chair, and I decided not to choose that one. Maybe that meets the standard of originality applied in Canada.

Am I the first to cross the threshold of creating the first fully AI created copyrighted work to be registered in Canada? Given the way CIPO operates, I doubt it, but you never know. But if anyone wants to purchase or license the copyright on this unique creation, call me.

© Hugh Stephens, 2023. All Rights Reserved.

Copyright Registration for AI-assisted Creations: How Much AI Input is Too Much?

Source: Generated by DALL-E2 from prompt provided by author

It’s finally April. That means that summer can’t be that far behind, can it? Dreams of sitting down at the dock with a cold one in hand, watching the sunset while the loons trill in the twilight. That’s what the idyllic image above conveys. I’ve even written a poem—well doggerel verse actually—to accompany the image. Except that I didn’t write it, or even compose the title of the work; ChatGPT did. Nor did I create the image. That was done courtesy of DALL-E2, both by now well-known AI programs. I did have a finger in all this creativity. I wrote the prompt which went like this, for Chat GPT;

Write me a poem in iambic pentameter involving watching the sun set over a lake in northern Ontario while I sit in Muskoka chair at my dock sipping on a cool drink, listening to the haunting cry of the loon”.

Not very creative, but whatever….Each time I entered the prompt I got a different bit of verse. Here’s one that is not completely terrible, labelled (by ChatGPT) “Sunset Serenity”. About the only skill and judgement (the criteria for originality with respect to copyright registration in Canada) I exercised was in picking this poem over another one that was even worse.

As the sun descends to meet the lake’s edge,

A golden glow spreads across the water’s ledge.

I sit in my Muskoka chair, calm and still,

Sipping a cool drink as the world grows chill.

The haunting cry of the loon pierces the air,

Echoing through the forest without a care.

The colors of the sky shift and change,

As the sun’s last rays slowly fade away.

In the distance, the forest creatures stir,

The rustling of leaves and the whir of a bird.

But here on my dock, I am content to be,

Watching the sunset and feeling free.

The lake becomes still as the sun disappears,

And darkness envelops the world without any fears.

But memories of this moment will forever stay,

Etched in my heart as I drift away.

I could probably improve on this poem but I won’t because I want to be sure that it is 100% generated by AI, with virtually no input from me, just like the image which was generated from a similar prompt. Why do I want to keep it “AI pure” and publish it “as is”? Because I am going to try to register this as a copyrighted work with the Canadian Intellectual Property Office (CIPO). And while a work does not have to be published to be registered, having it published gives it more credence as the date of publication becomes part of the registration process. So, if you are reading this, you have just helped me. There, it’s been published.

Why am I going to all this trouble? To prove a point? To test the system? For the hell of it? All of the above. I won’t actually be the first to register a work with CIPO that has been partially created with AI. In December 2021, IP lawyer Ankit Sahni managed to register the artistic work Suryast, listing the AI-powered painting app RAGHAV as co-author. The issue of whether an AI generated work can be considered an original work, subject to copyright protection, is a very live topic. The US Copyright Office has just waded into the fray as a result of a couple of authors who want to push the system, Stephen Thaler and Kris Kashtanova.

I wrote about Thaler last year (“The Humanity of Copyright”). Thaler has gone to inordinate lengths to try to get the US Copyright Office (USCO) to issue a copyright registration for works he has created with his so-called “Creativity Machine”. To date, he has been unsuccessful. Another run at this was taken by an author/artist Kris Kashtanova. Kashtanova submitted and received a copyright registration from the USCO for a graphic comic-book novel (“Zayra of the Dawn”) where the artwork had been produced exclusively by Midjourney, an AI application that produces images based on synthesizing millions of images scraped from the internet. In filing their application Kashtanova neglected to mention this salient fact, simply noting that their work had been “AI assisted”. When the copyright registration was issued, Kashtanova proclaimed that they (their pronoun of choice) had achieved a breakthrough, the first copyrighted work produced entirely by AI. The USCO was not amused. It initially threatened to rescind the copyright but later amended the registration to include only the elements that could be attributed to Kashtanova, such as writing the text and arranging the images. You can read the USCO letter here.

As a result of the brouhaha the Copyright Office’s stance caused, USCO has launched a “New Artificial Intelligence Initiative”. As explained by the USCO’s announcement,

This initiative is in direct response to the recent striking advances in generative AI technologies and their rapidly growing use by individuals and businesses. The Copyright Office has received requests from Congress and members of the public, including creators and AI users, to examine the issues raised for copyright, and it is already receiving applications for registration of works including AI-generated content.”

As part of this process the Office issued new guidelines requiring that applicants disclose the extent to which AI has been used in generating a work. In setting out these guidelines the USCO tries to establish the line between an AI-assisted work (which is eligible for copyright registration) and an AI-created work, which is not, while recognizing the difficulty in drawing this line. The Office notes that it all depends on the circumstances, particularly how the AI tool operates and how it is used to create the final work. In the final analysis, whether the work is the result of human hand will have to be decided on a case-by-case basis. The line is far from bright; indeed it is exceedingly murky and grey. To assist the Office in making this determination, applicants are instructed how to complete the form. For example, applicants should take care to claim only the portions of the work that are human-authored, and “AI-generated content that is more than ‘de minimis’ should be explicitly excluded from the application”.

In addition to this guidance, the Office will conduct a number of “listening sessions” with artists, creative industries, AI developers and researchers, and lawyers with a view to gaining public input prior to issuing a formal “notice of inquiry” that will look into a range of copyright issues arising from the use of AI, including the use of unlicensed copyrighted materials in AI training.

That is what is happening in the US. The Copyright Office is clearly trying to respond to this exploding and explosive issue, show some leadership and develop a position that will enable it to come to grips with difficult questions raised by new applications of AI technologies. Now, what is happening in Canada? The same issues are at play, but the responses are different.

For its part, the Government of Canada, through the Industry and Economic Development Department (ISED) tried to get ahead of the issue by releasing a discussion paper on AI, Text and Data Mining and the Internet of Things back in July of 2021. The paper was thorough, posing all the relevant copyright-related questions arising from AI generated content. For example, even if an AI created work could be linked back to a human author, who in the chain of creation should be able to claim authorship? Or, how do we determine liability and infringement where the level of human involvement in creation of AI-assisted content is minimal?  ISED received a number of thoughtful briefs in response. However, since September of 2021 when comments closed, nothing appears to have happened on this file, although a proposal for new legislation to regulate harms generated by the application of AI, the Artificial Intelligence and Data Act (AIDA—yes, just like the opera!) has recently been introduced. The AIDA consultation paper focusses on a range of possible harmful outputs from AI for which businesses could be held accountable, but skips over the issue of inputs. The word “copyright” is not mentioned in this document.

The Industry and Economic Development Department (ISED), where CIPO is housed, has bigger fish to fry, like electric vehicles, infrastructure development and so on. To its credit, it is also trying to tackle the thorny issue of AI with respect to its potential impact on society, ranging from inherent bias affecting human rights to criminal behaviour affecting consumers. But when it comes to copyright–even though ISED is the department within the Government of Canada with statutory responsibility for this essential service—it gets treated like an orphan. The Department of Canadian Heritage, the other government stakeholder in copyright issues, is up to its eyeballs dealing with other priorities; a complex bill to regulate online streaming (C-11) as well as groundbreaking and controversial legislation (C-18) to require large digital intermediaries like Google and Facebook to reach deals with news media providers to compensate them when news content is made available on the platforms. Copyright, it seems, has been lost in the shuffle and nothing is being done to address the rapidly evolving situation of AI-generated content infringing on creator’s rights.

As for the copyright registration process and the question of whether AI-generated works qualify, CIPO has not issued any guidance. Nor, frankly, is it capable of much examination because no copy of the work to be registered is submitted to, or retained by, the Office. Unlike in the US, where the Copyright Office keeps a copy of a published, registered work, CIPO has no physical record of what is registered. It will review the details submitted in the application to ensure that a work qualifies for registration according to the information provided, but registration does not guarantee that a work does not infringe another. One wonders, frankly, whether registration is really worth the time and trouble. At least it is cheap.

Now that AI-generated Sunset Serenity has been published, I am going to pony up my $50, submit a registration application to CIPO, and see what happens. The application process has a box where the work is described. My application is going to describe the work Sunset Serenity (image and poem) as being created entirely by Artificial Intelligence (DALL-E2 for the image and ChatGPT for the poem and title) on the basis of minimal prompts (citing the prompt in the first paragraph of this blog post) provided by the applicant, (me) the owner of the copyright, in an action that was largely devoid of any skill or judgement. I will not claim to be the author. Then I will sit back and see what happens. Stay tuned. I will be sure to let you know how CIPO handles the registration process and if my AI friends and I get our copyright certificate.

© Hugh Stephens, 2023. All Rights Reserved.

This blog post has been updated to clarify that consultations on AI and other copyright related issues are carried out by ISED, not CIPO.

Canada’s 2023 Budget and the Creative Industries: Not Much to Cheer About

Credit: Government of Canada

Supporters of Canada’s creative industries—writing and publishing, music, film making, the visual and performing arts—would be hard pressed to find much to celebrate in the most recent federal budget unveiled on March 27. In a political landscape where the focus is on health care, climate change and energy transition along with security challenges such as the war in Ukraine, the creative industries didn’t get much of a look-in despite the fact they comprise about 3% of Canada’s GDP and provide almost 700,000 jobs. Among other things, hints of positive action in last year’s budget have failed to materialize leading to concerns that the government will not follow through on commitments to support educational book publishing, such as by enacting needed reforms to the Copyright Act.

Last year’s 2022 budget included some tantalizing language that gave writers and publishers a sense of optimism that action would be taken sooner rather than later on this issue;

“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 education publishing industry including fair remuneration for creators and copyright holders, as well as a modern and innovative marketplace that can efficiently serve copyright users.”

This gave some hope to those involved in educational publishing which, by some estimates, has lost over $200 million in revenues since the expansion of fair dealing in 2012 to include “education”. This change, combined with a couple of court decisions, has undermined collective licensing and resulted in many provincial ministries of education and post-secondary institutions dropping their reproduction licences with the authors’ and publishers’ collective society, Access Copyright, instead relying on a unilateral and expansive interpretation of fair dealing to avoid paying for content when they reproduce copyrighted material used in teaching and research. As I wrote a year ago with regard to the 2022 budget, (“Copyright References in the Budget: Good Intentions Are Welcome but Early Action is Needed”), the government should act on its commitments and convert those intentions into legislation as quickly as possible.

Since then, the only action taken on copyright issues has been an amendment to align Canada’s term of protection with that of the United States (and more than eighty other countries around the world, including the EU, UK, Australia, Japan and Korea) by extending the term of protection by an additional twenty years, from the lifespan of the author plus fifty years to “life plus 70”. That action was required because of commitments Canada had made in the updated NAFTA trade agreement (the CUSMA/USMCA). The extension had to be enacted before the end of 2022, and the clock was running out. Therefore, rather than introduce a separate piece of legislation to amend the Copyright Act– thus subjecting that essential Bill to all the vagaries of a minority Parliament–the Liberals bundled the changes into the 2022 Budget Implementation Act. That legislation was a confidence motion and had to pass or the government would have been required to resign. The confidence and supply arrangement the minority Trudeau government has reached with the New Democratic Party (which controls 25 seats in Parliament, enough to ensure passage of legislation when combined with the Liberals current count of 156) meant that a non-confidence vote was not going to happen, so why not throw in a few extra loose ends that also needed Parliamentary approval to ensure expeditious enactment? This is the only recent change to the Copyright Act.

Updating of the Copyright Act has been pending for several years, including the need to address issues such as text and data mining and artificial intelligence, in addition to bringing fair dealing back into balance. There was zero indication in this year’s budget that this will be a priority for the government going foreward. However, budget announcements are normally reserved for new funding initiatives (unless, as mentioned above, there is a need to attach an unrelated but essential piece of legislation to the budget bill), so perhaps it is not surprising that the word copyright was not even mentioned in the 2023 budget. With respect to the creative sector generally, there were some limited funding announcements related to the arts and museums; the National Arts Centre in Ottawa is to get an additional $28 million over two years for programming and upgrading and six museums (four of them in Ottawa—it’s nice to live in the national capital) will get additional funding. In addition there will be some funding to support the “Building Communities Through Arts and Heritage” program, which supports local festivals and community anniversaries and can be used for such things as restoration of objects, community history books, statues and murals. A statue here, a mural there. But the Canadian Association for the Performing Arts complained that, “We are extremely disappointed by the blatant omission of the Canada Arts Presentation Fund in this year’s budget”, although the Canadian Media Fund did get a $40 million top up to increase production of content by francophone and “equity deserving” communities.  

Performers weren’t the only ones shortchanged. Publishers complained there was no increase to the Canada Book Fund, (financial support for Canadian booksellers and publishers) despite campaign promises to do so, and writers were disappointed to see that no additional funding was provided for the Public Lending Right (PLR). The PLR, established in the 1980s, provides compensation to authors for the distribution of their works by public libraries and is based on the presence of a title in public library catalogues that are consulted during the annual PLR survey. The average annual payout last year was around $800, a considerable reduction from when the program began. It’s not much, but when you are a starving writer, every little bit helps.

Another measure to support creators (and yet another where there has been no action) is the establishment of an Artists Resale Right (ARR) in Canada, an objective contained in the mandate letter issued to Heritage minister Pablo Rodriguez when he took the portfolio in 2021. However, as part of his ministerial mandate, Rodriguez was handed an extensive “to do” list and the ARR was just one item among many. The list of objectives included changes to the Broadcasting Act to cover streaming services, requiring “foreign web giants” (in the words of the mandate letter) to contribute to the creation and promotion of Canadian stories and music. This has resulted in Bill C-11, now back before the Senate as the two Houses play ping-pong with the legislation. Rodriguez was also instructed to introduce legislation requiring digital platforms that generate revenues from the publication of news content to share a portion of their revenues with Canadian news outlets. Thus, we have Bill C-18. In addition, he was mandated to take action to combat harmful online content by holding social media platforms accountable for the content they host. That legislation is bogged down and now subject to further consultations. As you can see, Mr. Rodriguez is a busy guy and his department is stretched, which may explain why some things are delayed.

The Artists Resale Right will probably come about as a result of the expected conclusion of a UK-Canada Trade Agreement. (The government could then bury that legislative change in a future budget implementation bill.) The Canada-UK negotiations have been dragging on for some time, ever since Brexit, but the agreement reached on March 31 for Britain to join Canada and ten other countries in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the CPTPP, should open the way to speeded up bilateral negotiations.

Meanwhile, hopes that the 2023 budget might lead to some indication of a way forward on copyright reform, particularly the need to fix “Canada’s broken copyright market framework”, as The Writers’ Union of Canada (TWUC) has phrased it, have been dashed. However, as TWUC CEO John Degan has said, “While discouraged by seemingly endless delay…(we) will continue to hold government to its promises.” But the clock is ticking, the legislative agenda is loaded, and the government is starting to approach the half-way point of its mandate. If promises of rebalancing copyright to ensure that the education industry pays its fair share for using copyrighted educational materials are to happen—thus ending the free ride for one industry at the expense of another–then the Trudeau government and the departments responsible, Innovation, Science and Economic Development (ISED) and the Department of Canadian Heritage, had better get moving. Despite not having much to cheer about in the 2023 budget on this issue, there is still hope that the government will get around to doing the right thing well before the next election.

© Hugh Stephens, 2023. All Rights Reserved. 

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