Michelle’s Country Music Murals: An Update

Source: author photo (c) Michelle Loughery

Some readers may recall two blogposts (Mural, Mural on the Wall and Were They Commissioned, One and All?) that I wrote a couple of years ago about muralist Michelle Loughery and her copyright dispute with the Merritt Walk of Stars Society. The disagreement was over who held the copyright to a series of murals that she and a team of volunteers, local artists, and at-risk youth had painted on the walls of various businesses in the small town of Merritt in the interior of BC, about 3 hours’ drive east of Vancouver. Michelle was the artist who designed, directed, and executed the work, in the process training a group of indigenous youth in life and employment skills. The project was funded through government job skills training grants. The youth and various program staff, including Loughery, were paid from these funds. However, what started out as a great community project became enmeshed in a bitter and (it seems to me) unnecessary and avoidable copyright dispute. The controversy arose because of the desire of the Society to value the murals as part of a process of getting additional grants. Sadly, the dispute has not been resolved and continues to bedevil the economic recovery efforts of the community.

This past summer Merritt was surrounded by out-of-control forest fires and an evacuation alert was issued, although not executed, but a couple of small towns not far away burnt to the ground. The fires, combined with the economic impact of COVID, severely damaged one of the town’s main industries, tourism. Tourism was behind the idea of proclaiming Merritt to be the “Country Music Capital of Canada” in the first place. The idea grew out of the Merritt Mountain Music Festival which took place for a few years from the early 2000s to around 2010. One year it attracted almost 150,000 attendees to a town of just 7,000, so you can imagine the strain it put on resources to provide logistical and security support for that number of people over just a few days in the summer.

Source: author photo (c) Michelle Loughery

Some people I talked to were glad to see the festival fold because of the security and health issues it brought with it, although it also created some financial benefits for the town. In any event, building off the publicity generated by the festival, a number of people in Merritt came up with the idea of the Walk of Stars, where handprints of some of the entertainers performing at the Festival were displayed at different locations in town. At around the same time, Loughery was invited to Merritt to manage a project to paint murals of country music stars on the walls of various buildings in the community, with the locations provided by local merchants. She had just completed a similar project in a neighbouring town (Vernon, BC). Loughery painted the murals while the youth involved were given job, life skills and trades training on the various projects, including construction, mural training, scaffold building, façade painting, fence building, landscaping, cultural training, and job experiences in local businesses. I have talked to several people who were involved in the project either through volunteering or working with the youth participants. They were enthusiastic about the benefits it had brought both them and the community.  

Alongside the murals, a country music museum was established, called the Canadian Country Music Hall of Fame, displaying memorabilia from various stars. The name was licensed from the Canadian Country Music Association in Toronto. Tied together with the Walk of Stars, the murals, a restarted music festival on a smaller scale and the museum, Merritt had built itself a unique tourist attraction to add to the fishing and camping activities in the region. Everything went well for a while but started to go south, as I wrote in earlier blogs, when issues arose over who owned the copyright in the murals. 

The Walk of Stars Society claimed that Loughery had been “commissioned” to do the work and thus the copyright in the murals resided with them. At the time the murals were painted, copyright law in Canada provided that a person or entity who commissioned an “engraving, photograph or portrait” owned the copyright, absent an agreement to the contrary with the artist. (This default to the commissioning party was removed in the Copyright Act revisions of 2012 but the murals were painted before that). Loughery’s position is that she was not commissioned to produce the works, but rather was a partner in the project, assisting with fund-raising efforts (although she does not deny that she received compensation for her work) and, further, it was agreed that she would retain copyright. The issue has not gone to court but the fallout from it continues. 

Source: author photo (c) Michelle Loughery

The latest manifestation relates to efforts to reboot the economy, post-COVID (when will that be?), through a series of linked murals along various highways in the province. There is a precedent for this; the Route 66 Mural Art project in the US. Loughery was involved in this project some years ago through the National Route 66 association. She consulted for the town of Cuba, Missouri, one of the towns on Route 66. Various spin-offs have been floated over the years, one of them using murals to tie together the various towns through which Route 99 passes in California, Oregon, Washington, and British Columbia.

Loughery has been promoting a revival of the idea through Art Route Blue, a concept funded by Destination BC, the provincial tourism promotion body. The goal is to get regional tourism associations to work together to apply for provincial grants to develop a linked art route in the province. However, uncertainty over who owns the copyright to the murals in Merritt (and thus the ability to reproduce them in promotional material) is becoming an impediment to moving forward. The role of Loughery and her “Art Route Blue” in moving the project forward appears to be another potential issue, but this all seems to go back to the original dispute over copyright ownership. Loughery sees the artist as central to the project. Without art there is no art route; without the artist there is no art. Many elements have to come together to make this work, but success is likely to come only through a cooperative partnership among all the players. The solution should be straightforward in my view; recognize the rights of the artist and negotiate a reasonable licensing arrangement that would clarify the ownership question and make the controversy go away. I am not privy to any discussions on this—none appear to be happening at the moment—but the dispute appears to be more about recognition and role than money, although clearly there are financial aspects to the art route project.

It may also be necessary to get the permission of the some of the stars in the murals, or their estates, for use of the murals. While there is no “personality right” (publicity right) in Canada as there is in some US states, as explained in this posting on the legal blog Lexology; there are potential concerns.

In Canada, rights of publicity are protected by the common law tort of ‘wrongful appropriation of personality’, sometimes referred to as ‘misappropriation of personality’, being the unauthorised commercial exploitation of a person’s name, image, voice or likeness. To be actionable, the use must clearly identify the person before any wrong will be attributed.”

Source: author photo (c) Michelle Loughery

Some of the artists granted permission for their likenesses to be reproduced in the murals to promote the youth project, but not necessarily in promotional material for other purposes.

Meanwhile, the agreement between the Merritt Country Music Hall of Fame and the  Canadian Country Music Association has expired, and will not be renewed. The facility in Merritt will continue to operate under the new name of the Canadian Country Music Hall of Honour. It is not clear to me why this happened—presumably the licensing fee for the name and affiliation. When I visited Merritt recently, the Hall of Honour was advertised as being open, but was not. COVID was perhaps a factor.

Despite COVID, and the fires, I am sure the town will bounce back, and tourism will continue to be an important part of the economic recovery story. The idea of leveraging off the country music festival is a good one. The assets are still there. The Walk of Stars handprints are well maintained, and the murals are generally in good shape (Loughery has returned from time to time to touch them up), although a major misunderstanding occurred when the owner of one of the buildings (the Desert Inn) on which an Elvis mural had been painted by Loughery—with permission from Elvis Presley Enterprises—decided to paint over half the work. Perhaps the new owners, who had changed the motif of the facility to Indian, complete with an Indian restaurant (Mughal Gardens), decided that Presley and pappadums don’t mix.

I hope that the ongoing controversy over copyright in the murals can be resolved amicably. If you are in a small rowboat in high seas, it is important to pull the oars in one direction. Settle the issue and pull together, and maybe the murals will become part of a wider art route project that will boost tourism in the region while providing some income and recognition for the artists who create the works. That would be the best update of all.

© Hugh Stephens 2021. All Rights Reserved.

Some Reflections on What Can—and Cannot—Be Protected by Copyright

Source: Author

My wife was flexing her wrist, extending her forefinger and manipulating her thumb, following the instructions on the sheet in front of her that the physiotherapist had provided. She (my wife that is) had broken her wrist a few weeks earlier, in an unfortunate fall. With neither of us having ever broken a bone before, it brought home the reality of how challenging recovery from even a relatively minor break can be. Once the operation has taken place, and later when the cast is removed, you start to think you are out of the woods. But then the hard work—the regular and constant physiotherapy and exercise to restore use of the limb—begins. In this instance therapy consisted of ultrasound, massage and personal exercise and manipulation at home, following a set of illustrations and exercises she was given at the clinic.

Having a sharp eye for all things related to copyright, I immediately spotted the “©Island Hand Therapy Clinic 2010” on the instruction sheet. There is nothing protectable about the bone or ligament structure in a person’s wrist any more than the knowledge of how to restore movement and circulation to a limb. So how could this set of instructions outlining and illustrating a sequence of exercises be subject to copyright protection?

This example is a good illustration of the distinction in copyright law between an “idea” and the “expression of an idea”, with the former not subject to copyright while the latter could qualify. The instructions, illustrations and sequence of these specific exercises had all been developed by this clinic for the exclusive benefit of its clients and are the clinic’s particular expression of the idea of wrist manipulation to regain movement. They form part of its intellectual property and are a benefit provided to clients who pay to use the services of the clinic. The exercises needed to regain movement in a limb cannot be copyrighted but the explanations and illustrations, when put together, form an expression of the idea.

Assertion of copyright is simple and straightforward (one of the major advantages of this form of intellectual property, compared to the more costly and legalistic processes required to register a trademark or secure a patent, for example). The ubiquitous © sign is not even required, although to affix it is a good idea as this is a conscious assertion of copyright. In Canada, a copyright can be registered for a modest fee, but it is not necessary to do so. In the US, a copyright does not have to be registered with the US Copyright Office, but registration is necessary if a legal case is to be brought against an alleged infringer.

Although in most countries a work does not have to be registered to be eligible for copyright protection, some form of “fixation” is required for it to constitute a copyrightable work. (A musical score, a photograph, a printed facsimile, for example). Fixation can be difficult to determine at times, as I discussed in an earlier blog post “My Fixation with Fixation”. Recently a Chinese court has extended the concept of fixation even further, ruling that the arrangement of a water fountain display to music can be protected by copyright, notwithstanding the reality that no two performances could be identical (owing to factors such as weather and light). The court dealt with the issue of fixation by virtue of the fact that the water and music show were replicable because of the design of the devices governing the directions and timing of the spray, and the programming of the music.

Most copyrighted works are not infringed, and most minor infringement seems to go unchallenged. It depends on the circumstances. It would be unlikely that the hand clinic would take any action against a patient who unthinkingly shared her physio exercises with a friend who was also having wrist problems. But they might object if another clinic appropriated, copied and distributed the exercises to their own patients. That little © at the bottom of the page is a good reminder and an insurance policy.

The distinction between an idea and its expression is a concept that I explored in an earlier blog “Copyright on the Rocks”.It is something that jurists have grappled with over many years as interpretations of what is subject to copyright evolved. Today, it is widely accepted that a procedure, process, system, method of operation, concept, principle, or discovery (to quote the US Copyright Act) are not subject to copyright, nor are facts, but that wasn’t always the case. 

In the 19th century, some newspapers in England pushed to assert copyright over the news that they generated, arguing that the considerable effort and expense they went to in collecting the news entitled them to protection against copying, at least for a specified period of time. For example, if TheTimes (of London) paid a correspondent to report on events abroad (a war for example), and then invested in the costs of transmission (by telegraph) of the latest news, why should rival newspapers be simply allowed to “cut and paste” the news that the Times had generated? Widespread copying of the news in the morning papers by the evening papers, and literally “cutting and pasting” columns of material into subsequent editions, was a common practice in the early days of journalism (and widely accepted).

In a famous case in the 1890’s known as Walter v Steinkopff (documented in Prof. Will Slauter’s book, “Who Owns the News: A History of Copyright), The Times sued another journal, the St. James Gazette, for copyright infringement for reprinting both part of a story by Rudyard Kipling and several news paragraphs. The Gazette admitted infringement with respect to the literary excerpts, but the case turned on the news paragraphs. The Times had taken the necessary steps to ensure payment to the journalist and had arranged assignment of the reporter’s copyright to the newspaper. The case was heard by Sir Ford North who ruled that even if cutting and pasting was a common practice in the British newspaper business at the time, the Times had not expressly consented to it. Moreover, the Times had complied with the legal provisions regarding establishment of copyright. However, North pressed the plaintiffs as to what exactly they thought copyright should protect. To quote from Slauter (p.175);

If The Times published a telegram announcing the death of a foreign leader, would other papers be prohibited from publishing the same news unless they obtained their own telegram? After some back and forth, counsel for The Times was willing to concede that other papers could not copy The Times’s report verbatim but that they could restate the facts.”

North summarized by noting that there is no copyright in news, but there is or may be copyright in the particular forms of language or modes of expression by which information is conveyed. In other words, facts (news) by themselves cannot be copyrighted, although the form of news articles may be subject to copyright protection. The same issue was settled in the US in a precedent setting case in 1921. (Chicago Record-Herald Co. v Tribune Ass’n)

And then there is the “merger doctrine” to consider. This occurs when there are only limited ways to express an idea, where the expression merges with the idea itself and is therefore not protected. The most recent example of what was probably a merger doctrine case, although it was not decided as such, was the US Supreme Court decision on Google v Oracle. Google had copied Oracle’s Java APIs (application programming interface) or source code (aka “declaring code”), without payment or permission, in order to facilitate programmers writing programs for the Android platform, which uses Java code. Google argued that the APIs, which provide a kind of underlying framework for writing computer code, (a so-called “building block”) were not copyrightable as they were basic utilitarian functions. Initially the court agreed but this ruling was overturned on appeal. The case was further appealed to the US Supreme Court where Google also argued that even if the APIs were subject to copyright, there was no infringement because Google’s use was fair based primarily on the fact that its subsequent use of the APIs led to new works and was thus transformative. (This is a gross oversimplification of the case but outlines the basic elements. A more detailed explanation can be found here).

In the end, the Supreme Court did not rule on whether the APIs were subject to copyright protection—which was the essence of the case. Instead, it focused on the fair use argument, and concluded that Google’s use was fair. This is a controversial finding as it potentially opens the door to other arguments that an unauthorized use of a copyrighted work that leads to a transformative product or service is legal under the US fair use doctrine. The Supreme Court tried to ring-fence its decision by stating that its ruling applied only narrowly to “declaring” computer code, but others have already been quick to try to jump on this bandwagon. Ultimately, the real question in Google v Oracle was whether the underlying code—which some have compared to a QWERTY keyboard—was copyrightable because of the limited ways in which computer code can be written.

This landmark case is a long way from my wife’s wrist exercise instructions, which shows how quickly one can go down the rabbit hole when discussing copyright issues. However, the principle of what can be copyrighted, and what cannot—based on the distinction between ideas and facts on the one hand, and the original expression of ideas and facts on the other—is a fundamental if sometimes blurred principle.

I am not sure whether I have made the distinction any clearer or simply blurred it more. But if you are in any doubt, please note the © symbol below. After all it is fixed (you’re reading it); it is my expression of the idea of what is and is not subject to copyright and it is original. Who else in history has connected Google v Oracle with Walter v Steinkopff (1892) with a Chinese court’s copyright finding on a water fountain display with my wife’s hand clinic physiotherapy instructions? It qualifies for the big ©! And I’m pretty confident that no-one is going to challenge my assertion of copyright.

© Hugh Stephens 2021. All Rights Reserved.

John Degen’s Twitter Broadside on the Access Copyright v York University Copyright Case: Right Message; Wrong Target?

Source: http://www.shutterstock.com

John Degen is Executive Director of the Writers’ Union of Canada. I don’t know Mr. Degen nor have I ever met him but I do know that he is a passionate defender of the interests of authors, as well as being a successful published novelist and poet himself. Recently Mr. Degen published a very long, almost “stream of consciousness” Twitter broadside, commenting on the recent decision of the Supreme Court of Canada (SCC) on the Access Copyright v York University cross-appeal. It was visceral, raw, personal, bitter (although leavened with some humour)….and fully understandable. While I take issue with certain aspects of what Mr. Degen said, especially his attacks on the credibility of the Court, one has to look at the context. His comments reflect a deep frustration with the system, born of a sense of betrayal. I think he reflects the views of many writers. However, both the problem and the solution lie not with the Supreme Court, but with the Parliament of Canada.

Before I get to Mr. Degen’s long Twitter post, a bit of background is necessary for the non-cognoscenti amongst you. The Supreme Court’s decision, outlined in all its legal intricacies by lawyer Barry Sookman (“Certified Tariffs not Mandatory Says SCC in York v Access Copyright”), has undermined the collective licencing system that has prevailed in Canada for the past quarter century by upholding the Federal Court of Appeal’s (FCA) earlier decision that “mandatory” tariffs (royalty fees) for reproducing copyrighted materials, certified by the Copyright Board of Canada after extensive hearings, are not mandatory with respect to users. According to the FCA’s ruling, mandatory tariffs apply only to providers of copyrighted content and require them to provide access to the material covered by the tariff at a rate set by the Copyright Board. As I commented at the time When is a ‘Mandatory Copyright Tariff’ Mandatory Only if you Opt-in?”, the FCA’s ruling demolished a major pillar of the collective licensing system in Canada. That decision has now been upheld by the highest court in the land.

To add insult to injury, while dismissing the appeal by the Canadian Copyright Licensing Agency (Access Copyright) against the FCA’s decision on mandatory tariffs, the Supreme Court then opined (negatively) on the FCA’s finding that York University’s Fair Dealing Guidelines were not fair and had facilitated infringement. At the same time, however, the SCC declined to reverse the FCA’s decision by declaring the Guidelines fair. York had argued fair dealing as a defence against Access Copyright’s initial infringement lawsuit and had offered its Fair Dealing Guidelines as proof. York had cross-appealed to the SCC the FCA’s decision that found the Guidelines to be unfair. Whether the Guidelines are fair or not remains undecided and may have to be further tested though litigation.

The reason given by the Supreme Court for declining to rule on whether York’s Guidelines were fair in the context of fair dealing was essentially technical, namely that since the tariff to be paid for copying was optional rather than mandatory, there was no longer a valid dispute between the university and Access Copyright. This flows from the fact that the collective is not a rights-holder, but rather a collective established to collect licensing fees and thus, according to the Court, it has no status to represent rights-holders in an infringement action. The structure of collective licensing in Canada is largely based on a system whereby rights-holders (e.g. publishers and authors) come together to form an organization that has two basic functions; (1) to facilitate the licensing of content by users and (2) to collect and distribute licensing fees to rights-holders. This avoids the necessity of users having to track down hundreds of individual rights-holders to clear (i.e. license) material and is a cost-effective means for authors to collect and receive revenues for uses of their work. In most instances, certainly in the case of Access Copyright, the collective society does not itself hold any rights but rather represents rights-holders.

This structure served both users and rights-holders well until recent years when some users, particularly post-secondary educational institutions of which York became the poster-child, decided they would no longer seek licences from Access Copyright. Instead, they chose to rely on fair dealing exceptions in the Act (education was added as an exception in Copyright Act revisions in 2012 although the decision to refuse to obtain licences preceded this change). In other cases, the universities undertook direct negotiations with some individual rights-holders. This refusal to obtain an Access Copyright licence came at a heavy financial cost to the institutions in the form of additional staff time and legal fees, as I noted in a recent blog (“Throwing Good Money After Bad: How Canadian Universities Wasted Millions by Not Securing a Copyright Licence”). It would have been so much simpler, and avoided so much litigation, to have simply obtained a licence, paying authors a reasonable sum for use of their work.

For many years tariffs (an annual cost per student—generally around $15 per student per year) were set by the Copyright Board if agreement could not be reached between the collective and users (educational institutions). The expectation and understanding was that if a university accessed material in the collective’s repertoire after the Copyright Board  had fixed a tariff, the institution would be subject to that tariff unless fair dealing could be established. For reasons related primarily to shortcomings in the language of Copyright Act amendments enacted in the 1980s and late 1990s, the SCC has now determined that the mandatory nature of the Copyright Board tariffs was not established in law. Instead, the Court reverted back to a 1930s interpretation whereby the mandatory nature of the tariff fell on the collective rather than the user. That is to say, if a user offers to acquire a licence, it is mandatory on the collective to issue it at the rate determined by the Copyright Board. That may be what the jurisprudence and the language of the law suggests; whether such an interpretation is just or even sensible is another question entirely. Jurisprudence and justice are not always the same. That is why it is incumbent on Parliament to fix what the SCC has broken; the collective licensing system for copyrighted materials in Canada.

What does Mr. Degen have to say about all of this? I called his thirty-one tweet posting over 3 days a “broadside” which seemed to be the best and most balanced description although it had some of the characteristics of a “rant”, in the sense that he “spoke at length in an impassioned way” (one definition I found). But rant can also have a negative connotation so I didn’t call it a “rant”. I thought about “diatribe” (“a forceful and bitter attack”), but this also has pejorative air to it. It had elements of a “harangue”, implying strong feelings, but still a bit negative. In a sense it had elements of all these descriptions, but this is not surprising given deep frustration with a system that seems to be stacked against creators. So let’s call it a “broadside”.

Degen aimed his guns squarely at the Court’s credibility, arguing that the decision damaged its reputation and “sorely tested” his trust in the Canadian justice system. Degen is bothered by the fact that the Court reached its decision in record time (40 days—“perhaps the speediest SCC decision on record”) and the fact that it was written by retiring Justice Rosalie Abella, whose husband is a former professor at York. While not endorsing the suggestion that she should have recused herself, he repeats it. While he does not say there is a conflict of interest, he emphasizes that one has to avoid the appearance of a conflict. He mentions that the Court did not rehearse much of the testimony filed by groups supporting Access Copyright and describes the decision as having been made on a “technicality” and being “unbalanced”. He even notes hearing that some unnamed legal professionals have described the decision (off the record) as “embarrassing” and “ridiculous”. That’s a lot of criticism to throw at the Court. But let’s not forget the inconvenient fact that Justice Abella’s decision and analysis was joined by the other eight Supreme Court justices. It was a unanimous decision. The reality is that the Court cannot create the law; it can only interpret what legislation says and if mandatory tariffs on users do not fall within the four corners of the law, the Court cannot stretch the law’s footprint.

Mr. Degen is also upset with the academy, particularly with University of Ottawa professor Michael Geist, a longtime copyright skeptic. Degen points out the discrepancy between Geist’s rising salary (yes, it has increased over 15 years, which is not surprising) and the economic plight of authors. He hints that the alacrity with which Geist tweeted out and commented on the SCC decision may have been due to inside knowledge regarding its content. But Geist is a prolific if annoying commentator and watches this stuff like a hawk. It doesn’t surprise me that he focused on putting his spin on the interpretation of the decision as quickly as possible, with an initial tweet just 3 minutes after the decision was released followed by others shortly after. Other members of the academy, such as Ariel Katz of the University of Toronto Faculty of Law are largely responsible for the Supreme Court’s finding on mandatory tariffs. Katz researched the issue extensively, and published articles critical of York’s legal defence team when they initially did not adopt his arguments. Katz’s work was referenced by the SCC in reaching its decision. Law professors in ivory towers have the time to research this sort of thing which involved parsing legislation going back to the 1930s. But hey, why shoot the messengers? If the law is deficient, don’t blame those who interpret it. Fix the law.

To resolve issues where there is an anomaly between the letter of the law and legislative intent, action by the legislative arm is the bottom line. In the Allen v Cooper copyright infringement case in the US, the Supreme Court of the United States (SCOTUS) openly invited Congress to correct legislative deficiencies that allow US state governments to thumb their nose at copyright law and to copy with impunity. The SCOTUS ruled 9-0 that 1990s Congressional legislation failed to override US state sovereign immunity with respect to copyright infringements, but noted that this conclusion;

“need not prevent Congress from passing a valid copyright abrogation law in the future. In doing so, Congress would presumably approach the issue differently than when it passed the (original legislation)….Congress likely did not appreciate the importance of linking the scope of its abrogation to the redress or prevention of unconstitutional injuries—and of creating a legislative record to back up that connection. But going forward, Congress will know those rules. And under them, if it detects violations of due process, then it may enact a proportionate response. That kind of tailored statute can effectively stop States from behaving as copyright pirates. “

It was a clear road map for legislative action to remedy what the Court could not do because its hands were tied by the wording of the law. The need for Congress to take action has been reinforced by a study from the US Copyright Office (USCO) that held public hearings and examined the extent of state infringement and abuse of copyright. It’s report, just released, concluded that “infringement by state entities is an issue worthy of congressional action”. It would be nice to see USCO’s Canadian counterpart, the Canadian Intellectual Property Office (CIPO), take such a independent view on the mandatory tariff issue but the USCO, as an entity of the Library of Congress, has far more independence than CIPO.

In any event, similar to the comments of the US Supreme Court with regard to the role of the legislative branch, the SCC noted (at para 76) that “It is of course open to Parliament to amend the Copyright Act if and when it sees fit to make collective infringement actions more readily available. But under the existing relevant legislation in this appeal, an approved tariff is not binding against a user who does not accept a licence.”

This is, in fact, where John Degen ends up his Twitterspiel. “Parliament cannot let this profoundly damaging Supreme Court ruling be the last word”, he concludes. I agree. Focus on the legislative solution.

The message I am trying to convey (with no disrespect to Mr. Degen) is that one has to be very careful in casting doubt on the credibility of the Supreme Court no matter how disappointed one is at the outcome of a case. After all, the day will inevitably come when the SCC makes a ruling on some issue that favours creators and rights-holders, and in that instance it will be seen as all-wise and all-knowing. So let’s give the SCC the benefit of the doubt and accept that it has interpreted the law as it exists. The ball is now back in Parliament’s court and if the government of the day (we will know who that will be on or shortly after September 20, given the current general election) wants to maintain the proven system of collective licensing for the benefit of both users and rights-holders, it is going to have to introduce legislative amendments to address the Supreme Court’s legally-correct but socially and economically unjust decision.

© Hugh Stephens, 2021. All Rights Reserved.

Copyright Takedown Gives Conservative Party Pretext to Remove Clumsy Political Attack Ad

Credit: Screenshot: CultMtl.com

Good political attack ads make voters angry with–or mock–the politician in the ad, reminding voters how much they dislike the targeted individual or party they represent. Poor political ads expose the sponsor of the ad to ridicule and remind voters why they should question the competence of the Party that created it. The Conservative Party of Canada (CPC), Canada’s official opposition party, is batting ten for ten in the latter category with its latest laughably amateur attack ad against Prime Minister Justin Trudeau recently posted on Twitter. The ad clumsily pasted Trudeau’s face on to the body of (then) 12 year old Julie Dawn Cole, the young actress who played the spoiled brat Veruca Salt in the 1971 children’s epic Willy Wonka and the Chocolate Factory, singing the song “I Want It Now”. (Just for fun, here’s a link to the original; it’s not the 2005 Tim Burton/Johnny Depp version). Instead of throwing a tantrum for more candy, in the CPC ad Trudeau wants an election.

The ad was posted just before Trudeau went to see Governor-General Mary Simon on August 14 to request that Parliament be dissolved, and a general election be held on September 20. As per standard constitutional convention, the PM’s request was promptly granted. Meanwhile, the ad circulating on Twitter was widely ridiculed, including by a number of senior Conservatives. One Conservative Member of Parliament is reported to have said, “I trust the decision-maker who decided to post this tasteless and appalling video will brought up to speed”.

Fortunately for the CPC, copyright came to their rescue in the form of a DMCA takedown notice to Twitter from the rights-holder, who appears to be Warner Media. The film was released by Paramount in 1971 but re-released in DVD and Blu-Ray formats by Warner Home Video a few years ago. Given the free publicity the Conservative ad generated, it might have served Warner’s interests to have left it up a bit longer, but entertainment industry lawyers are, understandably, an unforgiving lot when it comes to copyright infringements. Once Twitter responded to the notice and took it down, the Conservative Party no doubt heaved a big sigh of relief.

They could have pushed back of course, and filed a counter-notice in the US, citing fair use on the basis of satire. Parody and satire are both possible grounds for a fair use defence in the US, although fair use through satire is considerably more difficult to establish than a parody defence, which has already been tested in the courts. (The difference between the two is explained here). Even though parody can be an acceptable fair use, there is still a high bar, as was demonstrated in the Dr. Seuss “Oh, The Places You will Boldly Go” parody case last year. This was a mash up of Dr. Seuss’ “Oh, the Places You Will Go” and Star Trek. It was clever, but it wasn’t parody. On appeal, the Ninth Circuit Court of Appeals overturned a lower court ruling that had found the work to be a fair use parody. The Appeal Court ruled that unless the “parody” is poking fun at the original copyrighted work, it is not a fair use.

Satire (along with parody) is a specified fair dealing exception in Canada, added during the revisions to the Copyright Act in 2012, but just because a use falls within a fair dealing exception does not mean that the dealing is necessarily fair, since a number of other factors also have to be considered. The CPC video was certainly not a parody of the Willy Wonka film; rather, it was an attempted satire of Trudeau and his political objectives, ineffective though it was. But parody or satire, the CPC is not going to prolong the pain by fighting the takedown order. In fact, it quickly removed its Tweet once Twitter blocked the video.

This is not the first time the Conservative Party has run into legal issues with copyrighted material used in producing political attack ads. In the last election in 2019 they helped themselves to clips of interviews featuring Trudeau drawn from copyrighted broadcast content, without authorization, to produce ads showing him in a bad light. Although it was not the only broadcaster to have its material so used, only the state-owned CBC objected. Even though the Conservatives took down the content in question, the CBC sued in order to clarify the legal issues, claiming the Conservatives’ use of the network’s material undermined its political neutrality. The issues were indeed clarified, but not the way the CBC expected. As I outlined in a recent blog posting on the court decision Using Copyrighted Broadcast Content without Authorization to Produce Political Attack Ads: “All’s Fair” Rules the Federal Court in Canada”, the Court found the Conservative Party’s use to be a fair dealing on the basis of the “criticism” exception.

It is clear that attack ads are part of the panoply of campaign measures near and dear to the heart of the Conservative Party. In my blog on the CBC lawsuit against the Party, I noted that in back in 2014 when they still formed the government, the Conservatives tried to slip through legislation in an omnibus bill that would have allowed political parties to use copyrighted materials without authorization in the course of an election campaign. They subsequently withdrew that amendment but the recent Federal Court finding in favour of the Party against the CBC has removed the need for such legislation. While they are now free to craft political ads drawing on material from broadcasters—and possibly other sources such as films—the creation of attack ads has to be done carefully to avoid backfires and backlash. The poorly thought out and badly executed Willy Wonka video is a good illustration of the need for some adult supervision over the creative efforts of digitally savvy (but perhaps not very politically astute) twenty-somethings who no doubt had beavered away in the dark recesses of some CPC office to create what they thought would be a good put-down of Justin Trudeau. But social media is an unforgiving task master if you get it wrong.

In this case, copyright rode to the rescue. In future, if the Conservatives shoot themselves in the foot with clumsy ads that backfire, they probably won’t have that fig leaf to hide behind. There is a lesson here for all the political parties. Think hard before you hit the “send” button to put up a post on social media.

© Hugh Stephens, 2021. All Rights Reserved.

As an update I would note that the day I posted this blog, the Liberals got into their own hot water over a Tweet in which they selectively quoted Conservative leader Erin O’Toole on private health care. Twitter marked it as “manipulated media”. No copyright angle here but the message about being careful about using social media applies to all parties.

Surprise! Canadians Like to Pirate NHL Games–But Dynamic Site Blocking Orders May Soon Put a Stop to the Free Rides

Following the dismissal in May of the appeal against Canada’s first site blocking order (the GoldTV case) by the Federal Court, much to the chagrin of the one lone ISP (TekSavvy) that opposed the court’s order, Bell Media, Rogers Communications and other broadcasters have applied for a dynamic site blocking order to protect their broadcast rights for National Hockey League (NHL) games in Canada. What could be more Canadian than the pirating of hockey broadcasts, eh? It’s like Spaniards pirating broadcasts of bull fights. In neither case is it justified but it reflects how “pirate priorities” reflect the national psyche.      

The “dynamic injunction” requested is not targeted at a specific site or streaming service. Instead, its goal is to block the unauthorized broadcast of NHL games, no matter the source. This is similar to injunctions issued in the UK to block infringing streaming of English Premier League (soccer) games. Because of the dynamic nature of piracy where the pirates duck and weave to avoid detection by shifting IP addresses regularly, sometimes even during a game, the response also has to be dynamic. The injunctions, if granted, will require Canadian ISPs to block a list of IP addresses being updated in real time.

The story of the fight for the broadcast rights for ice hockey in Canada goes back a few years. Back in 2014 Rogers shook up the world of sports broadcasting by offering $5.2 billion to win TV broadcast rights for NHL hockey in Canada for a twelve year period, 2014-2026, taking the franchise away from the government broadcaster CBC which had held the television rights for 55 years, and the radio rights for many years before that. “Hockey Night in Canada” (Saturday night) is the country’s most popular TV broadcast with at times up to 18 million viewers, half the national population.

To say that Canadians like hockey is like saying that bears like honey (or Russians like vodka). Hockey is engrained in the national psyche and has become a defining national characteristic, like poutine and the Tim Horton’s “double double”; aka double cream; double sugar. (These two delicacies make me wonder how Canada has been able to achieve life expectancy rates of 80 years for men and 84 for women). The comparable rates in the US are 76 and 81 years.

In Canada, it is irrelevant whether you are a hockey fan or not as you will still need to respond to the inevitable question, “Whadjya think of the game last night?” The correct response is not “what game?” but “yeah, close eh?” (hoping it was, in fact, close) or maybe “yeah, that was quite a fight” (knowing there is always a fight). You have to participate in the national conversation whether or not you know or care who was playing whom. Although most Canadians live in large cities, the national myth still exists of kids skating on outdoor rinks in minus 30 degree (Celsius) weather in northern Saskatchewan or Quebec. Author Roch Carrier’s famous story of “The Hockey Sweater” about a young boy in Quebec whose hero is Maurice “Rocket” Richard of the Montreal Canadiens, and who is shunned by his playmates because his mother inadvertently orders the wrong hockey jersey from the Eaton’s catalogue (yes, he was sent a detested blue jersey from the Toronto Maple Leafs), captures the depth of feeling about hockey in Canada. Mind you, that was all back in the day when there were just six teams, of which two were in Canada. Now the NHL has 31 teams, soon to be 32, with seven teams in Canada. It used to be so simple when it was just the Maple Leafs (English Canada) versus the Canadiens (French Canada), and teams from Florida didn’t win the Stanley Cup.

All this hockey action (each NHL team normally plays 82 games) generates a lot of viewing time, all of which is expensive for broadcasters (and advertisers). Since acquiring the NHL rights for Canada (at twice what NBC paid for the US rights), Rogers has licensed broadcasting and streaming rights to other broadcasters, including Groupe TVA in Quebec, Bell Media and even the CBC, in order to recoup some of its investment. It also broadcasts the games on its own Sportsnet cable channel. Given the role that it plays in Canada’s image of itself, ice hockey is the “killer app” for broadcasters, the content that you have to have in order to sell advertising. The fact that so much money has been laid out for the rights (and for licensing fees for those getting the content from Rogers) helps explain the determination of the rights-holders to plug the holes in the system caused by piracy. The request for the blocking order cites losses of between 583,000 and 974,000 subscribers, according to Torrent Freak.

Those opposed to any form of site blocking such as Teksavvy, the self-appointed defender of “internet freedoms” among the ISPs, along with groups such as the Canadian Internet Policy & Public Interest Clinic (CIPPIC) at the University of Ottawa, who seem unable to differentiate court-ordered, targeted site blocking of pirate sites from “internet censorship”, will continue to push back. Teksavvy opposed Canada’s initial site blocking order granted by the Federal Court (GoldTV), then appealed the court’s decision after the order was granted and is now criticizing that decision as opening the “floodgates” to site blocking injunctions.

I guess you could say that from one perspective, they are correct. From one blocking order we now have two, a 100 percent increase. If further orders are granted that impressive percentage increase will drop. In fact, if the blocking orders succeed in curbing piracy there may be less need to seek them. And if there are a few more, it will be because they are needed to protect the rights of those who invest in content and who, by extension, bring that content to consumers. It may be that eventually the issue of site blocking in Canada will become one more routine measure against piracy, as it is in Australia, where it has proven to be very effective in interrupting access to pirate feeds and thus encouraging viewers to get their content legitimately.

Whatever happens, hockey is not likely to lose its place as the king of content in Canada. The quality of the game is dependent on an entire eco-system, from training and recruitment of junior players through the progressive steps to becoming an NHL player, to maintaining the operation of the league itself. That eco-system has to be funded. And where do the funds come from? Consumers of course, in the form of ticket prices (already exorbitant) and broadcasters, funded by advertisers. The pirating of content undermines this eco-system on which hockey fans depend, so in the end, avoiding payment for access to the game is self-defeating. As I have commented elsewhere, sports fans are only cheating themselves when they stream pirated content. In some countries, a share of broadcast revenues go directly to sports clubs that develop young talent, so starving the development process is like eating your own seed grain.

Today, more than 40 countries have some form of piracy site blocking and the more this measure is used, the less controversial it will become. The EU is also looking at measures to speed up the take down process for sports events. Canadian courts have recognized site blocking as a proportional measure to protect copyrighted content—even when that content involves putting the puck into the net.

© Hugh Stephens, 2021. All Rights Reserved.

Singapore’s Copyright Act Revisions: A Step in the Right Direction, But….

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Singapore’s long awaited and long debated revisions to its copyright law were tabled in Parliament at the beginning of July with a view to enactment by the end of summer. This follows a two-month public consultation by the Law Ministry and Intellectual Property Office. The revisions have been in the works for some time, beginning with consultations in 2016 and 2017 culminating in the publication of the Copyright Review Report in 2019. What is the upshot? Will these revisions address the concerns of rights-holders? The answer is a qualified “yes, but”.

The fundamental objective is to update copyright law for the digital age, a challenge faced by many governments. The consultation that concluded in April was to finetune application of the proposals brought forth in the 2019 report, not to add to or subtract from them. One of the major changes is to update language in the legislation to use of “plain English”, to make the law more accessible. While laudable and understandable, the devil is always in the detail when it comes to translating well understood legal concepts into layman’s language. This can potentially lead to misunderstanding on the part of the public and potentially to further litigation, which could have been avoided. A good example is the introduction of the term “permitted use” to describe not only legal exceptions to copyright but other “permitted uses”. There is ample scope for confusion here. It is important for the public to understand that the copyright owner is not permitting the use; in fact in the case of a legal exception or a fair use, no permission is required. It would have been far better to be precise, noting that a fair use is a legal exception to a copyright holders’ monopoly right, not one that has been “permitted” as in the case of a licensed use. 

As stated in the preamble to the 2019 report, the intent of the revisions is to enhance creator’s rights by introducing a new right of attribution, change the default ownership of commissioned works in favour of the creator (although this can be modified by contract) and enact new enforcement measures to crack down on the sale of Illicit Streaming Devices (ISDs). These are devices that, when combined with related software, provide unauthorized access to streaming content. They are sold openly in Singapore and often advertised as providing access to “free content”. The revisions will also provide some additional exceptions to users, such as broadening the education exception for students and non-profit schools (but only for content freely available on the internet, allowing content providers to put content behind a paywall), exceptions for text and data mining, adjusting fair use criteria, and facilitating the works of the GLAM (galleries, libraries, archives, museums) sector, among other objectives. Some of these exceptions, if not applied carefully, could be problematic.

One of the most positive elements of the revisions for creative industries is the new provision that makes it illegal to sell set top boxes (aka Illicit Streaming Devices) and associated software applications that offer access to pirated content (movies, television shows, sports events), or to advertise that they provide access to such content. The infringing content is hosted on pirate sites outside Singapore and accessed by consumers in Singapore by purchasing ISDs openly sold in shopping malls and electronics markets. In most instances, ISDs themselves do not contain pirated content, as used to be the case with illicit DVDs, but they provide the means of access once configured to do so. Merchants will either offer a configured device or provide the purchaser with the means to access the infringing content, through software or a website. In some instances, purchasers even agree to pay for access to the content, mistakenly believing that this legalizes their conduct—while congratulating themselves on the terrific “deal” they just got. Pirate websites can easily afford to undercut legitimate content providers since they are stealing the product and then reselling it. It’s a great business model for the pirates.

I have written about the difficulty of dealing with sellers of ISDs in the past. (here, here and here). It is a problem in many countries. Unless the law is very precise, bad actors will try to deny culpability by proclaiming that they are “shocked, shocked” that their customers are using what amount to burglary tools to commit burglary. The new provisions in Singapore, although a long time in coming, should deal with this by targeting retailers who, although selling a “clean device”, facilitate the loading of the apps that provide access to pirated content or provide instructions on how to modify the device, or advertise that their devices provide access to unauthorized content. This should largely constrain the ability of those retailers who knowingly sell devices for the purpose of accessing pirated streaming content to escape legal consequences. The penalties will be significant and can be both civil and criminal, including jail time.

In an interesting initiative even prior to the new law coming into effect, StarHub, one of the main pay-TV providers in Singapore, is offering consumers who have purchased the boxes that are soon to be outlawed the opportunity to exchange them, at no initial cost, for a StarHub box. For turning in their pirate box, consumers will get two years of free rental of a StarHub box if they sign up for StarHub’s subscription service. Even though the new law is focused on retailers and not consumers, the StarHub initiative gives consumers who may have purchased an ISD hoping for “free” content an additional incentive to “go legit”. This is important because surveys have shown that watching pirated content is, unfortunately,  widespread in Singapore. With the new law targeting the sale of ISDs combined with numerous and growing legitimate content offerings particularly in the VOD space, hopefully Singaporeans will be as law-abiding regarding content consumption as they are in other areas of the law.

Another provision of potential concern is the tinkering that has been done with Singapore’s fair use provisions. Singapore instituted a hybridized fair dealing/fair use regime some fifteen years ago. Certain fair dealing exceptions, such as “criticism and review”, “research and study”, and “current affairs and news reporting” exist in Singapore’s copyright law combined with an open-ended fair use provision that, until now, has been subject to five “factors”, four of which align with US legal practice. In determining fair use, the Singaporean courts currently consider;

(a)     the purpose and character of the use, including whether the use is of a commercial nature or is for non-profit educational purposes;

(b)     the nature of the work or performance;

(c)      the amount and substantiality of the portion used in relation to the whole work or performance; and

(d)     the effect of the use upon the potential market for, or value of, the work or performance.

(e)         the possibility of obtaining the creative work within a reasonable time at an ordinary commercial price

The fifth factor, which helped protect rights-holders against fair use claims exploiting the argument that unauthorized copies were justified because of the unavailability of certain content in Singapore, has now been dropped. The Ministry of Law argues that it is subsumed in the fourth factor, effect of the use on the potential market, etc, but this is not as explicit as the previous wording in providing guidance to the courts. However, the Ministry appears to have listened to input provided by stakeholders during the public consultation and the explanatory statement to the Bill now explicitly states that the removed fifth factor may “still be considered where relevant”. In addition, the existing fair dealing exceptions will now be made subject to the four fair use factors, which will provide some additional balance.

While the anti-piracy provisions in the soon-to-be-adopted law will help close a significant loophole that allowed retailers to openly advertise set top devices that provided access to pirated content, much will depend on court interpretations of the new revisions. Creators will be happy that a right of attribution has been enshrined as an additional moral right while photographers will be pleased that they will now enjoy default ownership of copyright in their works (as is the case in many other countries). The GLAMs will more easily be able to show AV performances or make copies for specific purposes. There will now be a specific exception for text and data mining in addition to the general fair use provisions, but the key here will be the possible impact on the commercial interests of copyright owners since the exception applies to both commercial and non-commercial use and goes further than similar provisions in, for example, Japan and the UK. In fact, Singapore’s text and data mining exception is arguably overly broad. A good analysis of the pros and cons of the various provisions is available on the website of this international law firm.

The old saying that “you can’t please all of the people all of the time” is certainly applicable to copyright law and is relevant here. The revisions bring in some long-overdue changes, particularly with respect to dealing with the open sale of devices providing access to pirated content. The hybrid fair dealing/fair use model, now to be unambiguously called “fair use” in Singapore, will lead to some legal uncertainties that will no doubt have to be worked through the courts. The flip side of the touted “flexibility” of a fair use system is the uncertainty that it generates as, theoretically, any unauthorized use can be argued to be “fair” and will need to be evaluated according to the established criteria and legal precedent, much of which does not exist in Singaporean jurisprudence. Other provisions are not particularly controversial and will help creators, especially the attribution right. Overall, the revisions are generally a step in the right direction—but there is always room for further improvement. The Bill will go for Second Reading in September so perhaps some of the shortcomings will be addressed as it moves through the legislative process.

© Hugh Stephens, 2021. All Rights Reserved.

Supreme Court of Canada Decision Undermines Canada’s Collective Licensing System: A Parliamentary Fix is Needed

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On July 30 the Supreme Court of Canada (SCC) delivered what can only be described as body blow to the management of collective rights in Canada, although the collective society at the centre of the action, Access Copyright, found some comfort, pointing out in its press release that the Court “refuses to legitimize uncompensated copying by the education sector”.  In its decision, the SCC not only dismissed the Access appeal against a ruling by the Federal Court of Appeal that “mandatory” copyright tariffs set by the Copyright Board of Canada are not mandatory with respect to users of content when that content is covered by the tariffs, but also editorialized on the lower court’s earlier ruling that York’s Guidelines (which York claimed allowed it to use material from Access Copyright’s repertoire without obtaining a licence or paying compensation) were not fair. Although the SCC refused to issue a Declaratory Statement legitimizing York’s Guidelines, its reasons for doing so were largely procedural. The Court declared that since payment of the tariff was not mandatory, there was no legal dispute between Access Copyright and York, and therefore it would be moot to take a position on the Guidelines. It then proceeded to cast doubt on the original decision against York, although recognizing that it was not retrying the case and that other factors not before the Court had to be considered.

The Guidelines will be tested when a suit is brought against York by a rights-holder (Access Copyright, although representing rights-holders with respect to collection of royalties, does not itself hold any rights in the works in its repertoire and therefore cannot bring an infringement case in its own name). When that takes place, the views of the SCC that the original finding of unfairness failed to take into account the user’s right of individual students will clearly be a factor in assessing culpability. Despite the unequivocal finding against York by the Federal Court in 2017 that their Guidelines had materially harmed the Canadian publishing market, the interpretive musings by the Supreme Court plus the need for individual rights-holders to establish infringement adds greater uncertainty to the process.  

As for the mandatory tariff issue, it is complicated as I explored in a blog post (When is a “Mandatory Copyright Tariff” mandatory only if you opt-in?) last summer. Back in the 1930s when “mandatory tariffs” first entered the legal vocabulary with respect to copyright, they were mandatory in the sense that Performing Rights Organizations were required to issue a licence (for use of sheet music, radio broadcasts etc.) to a user if the user offered to pay or paid the established licensing fee. In the late 1980s and 1990s substantial changes were made to Canada’s copyright legislation to address challenges emerging from photocopying and digital reproduction, and a number of collective societies (collective rights management organizations) were established to facilitate licensing of content and collection of royalties. It became standard practice for the Copyright Board to “certify a tariff” (i.e. approve a royalty fee) which would be applied to all users of a collective’s repertoire unless voluntary arrangements between users and the collective were agreed upon. The Federal Court of Appeal’s decision in June 2020 upended this long-established system, ruling that the legislative intent of the original 1930’s interpretation of the term “mandatory” had not changed. This has now been reaffirmed by the SCC.

In reaching its conclusion the Supreme Court carefully parsed the wording of the 1988 and 1997 legislation and concluded that the original intent of imposing constraints on the ability of collective societies to withhold licences had not changed. Moreover, it concluded that the role of the Copyright Board of Canada in certifying tariffs was to limit the amount that collective societies could charge, not to establish the amount that a user should pay (even though this is at variance with actual practice for the past twenty years). In declaring that it could not impute intent to Parliament where no wording existed (with regard to the question of what was “mandatory”), the SCC declared (at paragraph 76);

“It is of course open to Parliament to amend the Copyright Act if and when it sees fit to make collective infringement actions more readily available. But under the existing relevant legislation in this appeal, an approved tariff is not binding against a user who does not accept a licence.”

Legislative amendment seems to be the only alternative if the system for the collective management of rights is to be maintained in Canada. Whether and when Parliament will be prepared to take up this matter is another question, particularly given the strong opposition that can be expected from the post-secondary sector.

The alternative is litigation, perhaps a class action lawsuit against York, or at least a series of individual infringement cases funded by major publishers. One of the precepts of the collective management system introduced in the 1988 and 1997 reforms, however, was to avoid endless, costly litigation by facilitating collective licensing. Given this intent, a return to litigation seems like a retrograde step. Small publishers and individual authors will find it difficult to pursue such a remedy. If Access Copyright changed its business model and acquired the rights to works that it holds in its repertoire, it could bring a collective action against York, but whether this is a viable option is a question for members of Access Copyright to decide. Some collective societies, such as SOCAN for example—representing composers, songwriters and music publishers—do have certain rights assigned to them. However, even they intervened in this case since SOCAN’s tariffs that cover bars, restaurants, and clubs cover tens of thousands of small establishments across the country and without enforceable tariffs, licensing at scale becomes impractical and inefficient.

Although York’s Guidelines were found to be unfair in the original trial by the Federal Court in 2017, the SCC’s musings on that decision will make a finding of infringement less certain. The SCC noted that while the Declaration requested by York should not be granted:

this should not be construed as endorsing the reasoning of the Federal Court and Federal Court of Appeal on the fair dealing issue. There are some significant jurisprudential problems with those aspects of their judgments that warrant comment.”

According to the SCC the main problem with the analysis by the lower courts was that they approached the fairness analysis exclusively from the institutional perspective.

This error tainted their analysis of several fairness factors. By anchoring the analysis in the institutional nature of the copying and York’s purported commercial purpose, the nature of fair dealing as a user’s right was overlooked and the fairness assessment was over before it began.”

This will add complications for those bringing an infringement case, although there are a number of other factors to be considered in evaluating fair dealing that the SCC recognized were dealt with in the original trial and would need to be dealt with in any future litigation, such as amount of the dealing, nature of the work and the effect of the dealing on the market. It is far from certain that York would prevail in a future case. Far from creating clarity, it looks as if the result of the SCC’s decision–barring Parliamentary action on reinterpreting the meaning of mandatory tariffs–is more litigation, more uncertainty, and more waste of public funds as universities defend themselves against infringement actions that could have been avoided by the simple expedient of obtaining a licence.

Copyright minimalist Michael Geist at the University of Ottawa declared that the SCC’ decision was “a massive win for education and copyright”. It may represent a massive win for those educational institutions that seem determined to avoid paying a reasonable licensing fee for the content they provide to their students but it is hardly a win either for education or for copyright. Undermining copyright and payment of royalties for the use of copyrighted material will only result in less quality material being available to students. The quality of education will suffer in order to save payment of a few dollars per student to the copyright collective that represents the bulk of publishing and the vast majority of authors in Canada. The only winners in the end will be the legal profession in terms of legal fees. The solution is for Parliament to plug the holes in the legislation that the Supreme Court’s decision has exposed.

© Hugh Stephens 2021. All Rights Reserved.

The American Music Fairness Act (AMFA): The Canadian Dimension

Last week I posted a blog on the American Music Fairness Act (AMFA), draft US legislation that seeks to end the exemption that US terrestrial broadcasters enjoy with respect to payment of broadcast royalties to performers and labels for playing recorded music. It is an anomalous situation in which the US is the only developed country jurisdiction to provide such an advantage to terrestrial broadcasters. Not only that, the exemption unfairly tilts the playing field within the US broadcasting industry by discriminating against digital broadcasters, since streaming services and digital and satellite US broadcasters are required to pay performance royalties. It is also an anomaly because terrestrial (and other) broadcasters are required to pay royalties to songwriters and composers when they play their music, just not to performers (in the case of AM/FM stations).

As a result of this longstanding special treatment for terrestrial radio stations, which dates back to the dawn of the radio era in the US, not only do US performers in the US not get paid royalties when their work is played on terrestrial radio, but foreign artists are likewise deprived of such payments. As a result, many countries reciprocate by denying to US artists the ability to collect performance royalties when their works are played on terrestrial radio in their countries. This is permitted by the international convention that governs such matters, the WIPO (World Intellectual Property Organization) Performances and Phonograms Treaty of 1996 (WPPT). The WPPT, which the US ratified in 2002, provides that, in the words of WIPO;

performers and producers of phonograms have the right to a single equitable remuneration for the direct or indirect use of phonograms, published for commercial purposes, broadcasting or communication to the public. However, any Contracting Party may restrict or – provided that it makes a reservation to the Treaty – deny this right. In the case and to the extent of a reservation by a Contracting Party, the other Contracting Parties are permitted to deny, vis-à-vis the reserving Contracting Party, national treatment”.

In other words, instead of applying national treatment, i.e. treating foreign performers “no less favourably” than domestic performers, Contracting Parties could apply reciprocity, discriminating against foreign performers if their home countries failed to provide the full benefits of the treaty. Tit for tat, or the “mirror principle”. At the time the US acceded to the WPPT it filed a reservation with respect to equitable remuneration because the performance right under US law is not applicable to terrestrial broadcasting. This led a number of countries to exercise their right to refuse to collect or pay royalties owed to US artists for performance of their works on their terrestrial radio stations. Among them was Canada, as well as many EU countries, including Ireland and, at the time, the UK.

But it gets more complicated. The policy of applying reciprocal rather than national treatment to US performers was recently challenged in a dispute between copyright collectives in Ireland. The Irish court then referred the matter to the EU Court of Justice (ECJ). In a preliminary ruling, the ECJ found that Irish law, which applied reciprocity, was not consistent with EU law, which is silent on the reciprocity question leading the Court to conclude that it was not permitted. However, this was not the end of the matter as the European Commission is now launching a study into the impact of this decision. A solution, pushed by some in the European music industry, is to amend EU law to allow individual member states to continue to apply the reciprocity principle, writes music journalist Chris Cooke.

Because Canada, like Ireland the UK and others, applied reciprocal rather than national treatment to US performing rights, Canadian broadcasters were not required to pay, nor did Canadian collecting societies (Re:Sound and others) collect, performance royalties on US works. The US music industry, which to date has been unsuccessful in having the terrestrial broadcast royalty exemption lifted despite years of trying, has been seeking “national treatment” as a fallback. If granted national treatment, US performers are able to collect radio royalties in countries that mandate payment of performance royalties by broadcasters, even though they and non-US performers are denied such royalties in the US. For US performers it is a partial solution. That solution is now coming to Canada.

As part of the updating of NAFTA and its replacement by the USMCA (known as CUSMA in Canada), the US, Canada and Mexico agreed to national treatment when it comes to “all categories of intellectual property covered in the (IP) Chapter”; viz.

each Party shall accord to nationals of another Party treatment no less favorable than it accords to its own nationals with regard to the protection (2) of intellectual property rights.” Article 20.8 (1)

But that is all about “protection”, not payment of royalties, right?

Did you notice the footnote (2)? That says, among other things,

for the purposes of this paragraph, “protection” also includes…any form of payment, such as licensing fees, royalties, equitable remuneration, or levies, in respect of uses that fall under the copyright and related rights in this Chapter.”

To implement this commitment, on April 29, 2020, the Government of Canada published a Statement Amending the Statement Limiting the Right to Equitable Remuneration of Certain Rome Convention or WPPT Countries, in the Canada Gazette, the publication of record for the Government of Canada. In plain English, this complicated “statement amending the statement…etc” means that U.S. recordings are now eligible in Canada for equitable remuneration under all tariffs applied by the collecting society responsible for performance royalties. U.S. recordings fixed before 1972 will also now be eligible. This is as a result of changes introduced in the US by the US Music Modernization Act, which among many other things, extended copyright protection under US federal law to pre-1972 sound recordings. The change in Canada for pre-1972 recordings came into effect April 29, 2020 while the rest of the changes came into effect on July 1, 2020, the date when the USMCA/CUSMA entered into force.

This is one more copyright related commitment in the USMCA/CUSMA that I probably should have included in my blog on the cultural aspects of the trade agreement that I posted on its first anniversary at the beginning of July this year. (I am making amends now). As an aside, and unrelated to the USMCA, for certain tariffs (satellite radio, pay audio, simulcasting, non-interactive and semi-interactive streaming) U.S. recordings became eligible as of August 13, 2014 as a result of Canada’s ratification of the WPPT. (This was because US law requires digital broadcasters to pay performance royalties, so Canada accorded US recordings national treatment). As noted above, on April 29, 2020, pre-1972 U.S. recordings also became eligible for the same treatment.

As a result of the USMCA, for US artists the problem of performance royalties paid by Canadian terrestrial broadcasters is “solved”, even though they do not get performance royalties from terrestrial broadcasters in their own country. This change will impose some additional costs on Canadian radio stations although the Canada Gazette did not hazard a guess as to the cost, saying in effect that it was too complicated to calculate. Canada also has its own peculiarity when it comes to payment of performance royalties, which complicates calculations. The first $1.25 million in advertising revenues for terrestrial stations is sheltered from performance royalty payments except for a nominal $100 fee. In effect, this is a greatly watered-down version of the performance royalty exemption enjoyed by US radio stations, and is as controversial in Canada (and as unpopular with the music industry) as the terrestrial broadcast exemption is in the US.

While the new USMCA/CUSMA provisions will help US artists earn revenues when their recordings are broadcast in Canada, this does nothing to solve the problem for Canadian artists with regard to royalties for the broadcast of their music on US AM/FM stations, nor does it do anything for US artists in the US (a far bigger market of course). Any improvement in outcomes for artists is a step forward, but the tiny step taken in Canada is dwarfed by what would happen in the US if the American Music Fairness Act becomes law. It has a long way to go, and the US broadcast lobby is well organized and well-funded. This is not the first time this issue has come before Congress, the most recent being in 2017 when the “Fair Play Fair Pay Act” was introduced. Despite determined efforts by the music industry at generating support in Congress, ultimately it did not make it through the legislative sausage machine. Now the issue is back on the congressional agenda; it is high time to end this anomalous exception to payment of copyright performance royalties by bringing US law into alignment with the rest of the modern world.

Getting national treatment for US performing artists in Canada is positive (for this one group of performers) but is nonetheless only a half-step forward, an interim measure. The US Congress needs to fix the problem once and for all by passing the AMFA and eliminating the broadcast exemption. That is the right thing to do for all artists affected by the non-payment of performance royalties for radio broadcasts, whether they are from the US, Canada or elsewhere. Enacting the AMFA would also eliminate the disparity (some would say unfairness) whereby Canadian broadcasters will now be paying royalties to US performers while Canadian performers are denied the same benefits in the US.

© Hugh Stephens, 2021. All Rights Reserved.

The American Music Fairness Act (AMFA): A Better and Fairer Solution for Performers than Seeking “National Treatment”

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From the title of this draft legislation, introduced into the US House of Representatives in late June, you can surmise that something is unfair about music in America. What is unfair–from the perspective of performers and record labels–is that US terrestrial radio stations are not required to pay royalties to performers or labels for playing recorded music on air. Online broadcasters and streaming services do, but not over-the-air AM/FM radio stations. Terrestrial stations do, however, pay royalties to composers and songwriters for music played on air, but not to performers. Why is this, and what is the justification for this free-ride on the work of others?

It goes back to the birth of radio in the 1920s and is related to political clout, in this case the political influence exercised by the National Association of Broadcasters (NAB) in the US. I mean, who wants to pay for something, even if that something is the essence of the service you are offering your customers, if you can get it for free? The argument advanced by the NAB is that radio stations shouldn’t pay performers for playing their music because the stations provide “free air-time” that promotes new recordings. If you want to get your music promoted, you need to get it on air, and therefore—so the broadcasters’ argument goes—performers should be grateful for the free publicity. It is similar to the specious argument that seeks to justify piracy by claiming that it helps promote movies or books. It’s also like raiding the orchard next door and selling their apples for personal gain but justifying the theft on the basis that the more people buy apples (from me), the better it will eventually be for the apple growing industry and for the grower next door. Moreover, because internet radio broadcasters are required to pay performance royalties, while terrestrial broadcaster are not (the requirement for digital transmissions to pay performance royalties was introduced in the US in 1995; prior to this date performance royalties applied only to public performances), the exemption for AM/FM stations is another way of tilting the playing field in favour of just one segment of the broadcasting industry. The
AMFA would deal with this longstanding injustice.

The arguments for passage of the AMFA have been well laid out by several commentators, including retired music industry executive Neil Turkewitz (Broadcasting Rights for Performers & Labels: The Fair Thing To Do) and copyright blogger David Newhoff (Has the Moment Finally Arrived for Fairness to Music Performers?). Both point out that the tired old arguments about free publicity and advertising for performers is thread-bare; if they ever had any validity in the past, that has changed with the introduction of many other ways to promote and distribute music. Terrestrial radio competes with streaming services and satellite radio, neither of which are arguing that they should be exempt from the payment of performing royalties. Radio stations are far from the only game in town when it comes to giving exposure to artists, but they are the only ones to get a free ride on the artistic efforts of third parties, which they monetize through advertising. In fact, the US appears to be one of the only countries in the world not to require the payment of performance royalties by over-the-air broadcasters. (I’m not sure about North Korea).

This US exceptionalism (which the AMFA is trying to address) also results in the situation where US artists whose music is broadcast in other countries generally are deprived of royalties for the on-air playing of their work abroad, even though terrestrial broadcasters in those countries are required to pay performance royalties. This loss of overseas income to US artists has been estimated at over $300 million annually. Most countries apply the principle of reciprocity (“tit for tat”) when it comes to collection and payment of royalties. Since US law provides a royalty exemption for radio stations for all music played, this means that foreign artists also don’t get paid when their recorded works are broadcast. Therefore, most countries reciprocate (one might say “retaliate”) by applying the same rule to US performers, either by not requiring collection of royalties on music performed on terrestrial radio by US artists, or by allowing collecting societies to keep the funds generated by US artists and distribute them to domestic performers. The best way to counter this, and to ensure that royalties flow to US performers, is to fix the problem in the US by removing the broadcast exemption. This would also have the additional benefit for non-American artists of ensuring that they receive compensation when their works are played on terrestrial radio in the US.

However, there is another way to address the problem of collecting foreign royalties for US artists—by pushing for “national treatment”. This is a trade principle whereby foreign entities in a given country are treated as well as (or one could say as badly as) domestic entities. The term of art used is that the treatment must be “no less favourable” than that accorded to a domestic equivalent. No favouritism is allowed to be shown to domestic companies, entities or artists vis à vis foreign entities, and there is no tit-for-tat reciprocal treatment. For example, under the principle of national treatment, if British law has a requirement for payment of performance royalties on radio, all performers should receive them, whether they are British, American or Zulu. The fact that British performers in the US are denied royalties when their music is played on radio is not relevant because British performers are no worse off in this respect that their US counterparts. In other words, US law discriminates against all performers, regardless of nationality. Everyone is treated the same—badly.

But national treatment is not granted by countries willy-nilly. It is usually negotiated bilaterally and is subject to many qualifications. Only certain sectors or products are accorded national treatment, and there are usually exceptions. National treatment concessions are carefully negotiated to ensure a balance of benefits overall between countries, which is the main concern of trade negotiators.

Because there is no national treatment in music between the US and UK (there being no bilateral trade agreement), we get the situation described below by the US advocacy group Music First which, among other objectives,  is urging the US Government to negotiate national treatment commitments with foreign governments, under the deceptively catchy slogan “All music creators deserve equal treatment”. The following example is put forward by Music First to substantiate its case;

because the United Kingdom doesn’t recognize national treatment, if a band has members from both the United Kingdom and United States, only the U.K. artists get paid directly from the U.K. collective when their music is played on U.K. radio.”

Some would say that is only fair because the US doesn’t allow British artists to collect royalties in the United States; others would say that two wrongs don’t make a right. Artists lose out in both scenarios. One way for the US music industry to deal with the overseas royalties issue is to push the US government to negotiate national treatment provisions with foreign countries that respect broadcast performance rights. But this is, at best, a stop-gap measure. A far better solution, one that will benefit all artists, including US and foreign performers both in the US and abroad, is to rectify the injustice by eliminating the US terrestrial broadcast exemption once and for all.

© Hugh Stephens, 2021. All Rights Reserved

Negotiating Payment for Use of News Content on Dominant Internet Platforms: What’s Needed to Reach a Fair Deal?

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Given a choice between reaching “voluntary” agreements with news publishers for use of news content online and being compelled to do so by government, the dominant internet platforms (Google, Facebook) are now doubling down on negotiations with news providers. Mind you, there is nothing like a hanging in the morning to focus the mind. The latest confirmation that the platforms would prefer to negotiate “voluntarily” rather than face legislation compelling them to do so, or worse, have a government arbitrator set the terms of the agreement, was the announcement last month that Google Canada has reached agreements with eight Canadian publishers, including one major Canadian nationwide daily (The Globe and Mail) to license content and pay news organizations to create and curate journalism. This came on the heels of Facebook’s recent announcement that it had reached agreement with 14 Canadian news providers, most of them small digital players, to pay for some content on the platform.

The sudden interest on the part of the platforms in reaching deals with news content providers is not born of charity or concern for the fate of news publishers. It is a direct response to mounting pressure on governments, and by governments, to deal with the issue of the market dominance of the platforms in online advertising, and the fact that part of their offering to attract viewers is use of content created and produced by news publishers.

It is open to interpretation whether or not it is consistent with copyright law for platforms like Google News to scrape content from news sites in order to display headlines and snippets (brief excerpts) of news stories. That is why the EU created a new neighbouring right for publishers through Article 15 of its Copyright Directive, providing news publishers (as opposed to the journalists who create specific stories) with a new right over content they publish, valid for a two year period from the date of publication. This tool was placed in the hands of the publishers supposedly to strengthen their hand in negotiations with the platforms.

This has been a hot topic for a few years now. Attempts to deal with platform free-riding on news content produced by others go back to 2014 when both Germany and Spain enacted a publishers’ right to provide publishers with leverage in negotiations with the major internet platforms. At that time, the main concern was Google’s dominance. Google won the first round, bringing German publishers to heel by threatening to downgrade their search results, and by closing down Google News in Spain. With the enactment of the publishers’ right at the EU level in 2019, the tide began to turn.  

France was the first to move to enact the new provision into national law leading, not surprisingly, to a confrontation with Google. After protracted legal struggles and political lobbying, Google decided that negotiation was preferable to confrontation, and managed to reach agreement with a majority of (but not all) French publishers. They negotiated with some major publications as well as a consortium of publishers known as APIG (Alliance de la presse d’information generale) but some other major news providers, such as Agence France Presse, were excluded. Now a ruling by France’s Competition Bureau has put the APIG deal in doubt. According to press reports, antitrust investigators have accused Google of “failing to comply with the French competition authority’s orders on how to conduct negotiations with news publishers over copyright”. On July 13, the Authority fined Google 500 million Euros ($593 million) for failing to negotiate with the publishers “in good faith” as earlier instructed by the Authority. Google was ordered to present a reasonable offer to the publishers for use of content within two months or face a fine of up to 900,000 Euros a day. Now that’s talking tough. The ruling addresses issues that arise from the nature of the negotiations between the platforms and publishers, whether with individual news providers or with a group or groups of publishers. Because of their scale, the platforms can use “divide and conquer” tactics giving them the upper hand.

In Australia, the government dealt with this by introducing legislation that would have required both Facebook and Google to submit to binding “final offer” arbitration if they were not able to reach revenue sharing agreements for use of content with Australian media providers, giving news providers an additional lever. After unsuccessful attempts to overturn the legislation by threatening to abandon the Australian market (Google) or shutting down all Australian news feeds on its service (Facebook), campaigns which spectacularly backfired, both platforms agreed to negotiate with Australian media publishers, avoiding application of the Code. Since then some impressive deals have been struck, resulting in substantial ongoing payments to Australian media.

Google had already seen the writing on the wall. In 2020, it launched its Google News Showcase, an initiative billed at $1 billion (over 3 years) to support journalism by licensing content from news media outlets in a number of countries. (Canada, Germany, Brazil, Argentina, the UK and Australia were the countries initially named). At the time, very few major media companies signed on; Germany’s Der Spiegel and Stern were initially among the few large players to participate. No sooner was it announced, than in Australia the program was suspended as a means of pressuring the government to drop its legislation targetting the platforms. It was not implemented in Canada because no major media outlets agreed to take part. Google was more successful in Britain, however.  In February it was announced that the platform had reached agreement with 120 British publishers, including the Financial Times and Reuters.

The determination of the Australian government to stand up to the pressure tactics of Facebook and Google was favourably noted—in the US where publishers are supporting draft legislation that would allow news organizations to bargain collectively with platforms by providing a limited time exemption from anti-trust legislation–and in Canada, where Heritage Minister Steven Guilbeault, has committed to bring in legislation similar to that passed in Australia. Guilbeault, however, has not delivered, much to the chagrin of News Media Canada (NMC), the lobby group representing the news publishing industry (the self-described “voice of the print and digital media industry in Canada”). As I noted in a recent blog posting, “An Open Letter to Justin Trudeau: Canada’s News Publishers up the Pressure on Facebook and Google”, NMC is unhappy that the Trudeau government has not got around to introducing the promised legislation because they believe it would strengthen their position in negotiations with the platforms. (Separate legislation introduced in the Canadian Senate by an opposition Senator and modelled on the EU neighbouring rights provisions, is going nowhere. Senate bills rarely make it through the legislative process and bills sponsored by non-government Senators stand even less chance).

The “Open Letter”, which appeared on June 9, blanked out the front page of many daily papers in Canada, including the National Post, Toronto Star and many of the city dailies owned by the Postmedia Group. At the time I mentally noted that the Globe and Mail, and my local daily, the Times-Colonist (Victoria), did not publish the “Open Letter”. Now I know why. In addition to the Globe, Glacier Media, the owner of the Times-Colonist (and many other smaller community papers and specialty industry publications), along with Black Media, another publisher of many community papers, were among those that reached agreement with Google, despite being members of News Media Canada. That leaves Postmedia, the publisher of daily papers in most major cities in English Canada, the TorStar Corporation, publisher of the Toronto Star and Quebecor, the publishers of French language dailies in Montreal and Quebec City, out in the cold, at least for now.

This piecemeal approach is one of the biggest problems facing publishers, whether in Canada, France, the US or elsewhere (except in Australia, where the compulsory arbitration requirement backstops the process) because the deep pockets of the platforms give them a negotiating advantage. Initially, in most countries, Google and Facebook were able to make deals only with small digital outlets primarily. For these small-scale start-ups, funding from the platforms must have seemed like manna from heaven. The major publishers resisted but inevitably the common front began to crack as each outlet determined what was in its best interest.

In the US there have, to date, been no revenue sharing agreements for use of content between US news publishers and Google or Facebook. Many publishers would rather deal collectively with the platforms rather than being picked off one by one. This is one of the prime reasons for the (re)introduction of the Journalism Competition and Preservation Act (JCPA) in the US Congress. According to its bipartisan sponsors, “this bill will support the independence of local papers by giving news publishers the power to collectively negotiate with digital platforms like Google and Facebook”.

The US is not the only country (besides Australia) to recognize the negotiation imbalance. In Denmark, thirty media companies have decided to come together to bargain collectively with the platforms. This reflects a longstanding Scandinavian preference for cooperation among copyright and collective rights organizations, as I wrote about after my visit to Denmark a couple of years ago.

While the draft US legislation to provide news publishers with an anti-trust exemption has bipartisan support, it has been criticized by two well-known anti-copyright advocacy groups, Public Knowledge (PK) and the Authors Alliance. Their gripe is that the JCPAcould be interpreted by courts to implicitly expand the scope of copyright.”

Presumably they are referring to this language, which forms the core of the Bill;

A news content creator may not be held liable under the antitrust laws for engaging in negotiations with any other news content creator during the 4-year period beginning on the date of enactment of this Act to collectively withhold content from, or negotiate with, an online content distributor regarding the terms on which the news content of the news content creator may be distributed by the online content distributor…”

According to commentary published by both PK and the Alliance, their concern is that hyperlinks could be subjected to copyright protection, and that access to snippets of information that may be subject to fair use would likewise be legally constrained through court interpretations. This is not only a pretty far-fetched conclusion (there is absolutely no reference, implicit or otherwise, to hyperlinks in the legislation), but also attacks one of the fundamental principles of copyright, namely that a creator has the right to determine whether or not, and how, their content will be made available. If content is made openly available by the copyright holder, it may be subject to limited fair use access, but if a rights-holder decides to withhold or restrict access to content by putting it behind a paywall for example, that is their right. According to Public Knowledge (PK), the Bill could be interpreted to implicitly create “a new right that would allow news sites to withhold content until or unless they receive the compensation they seek”.  PK wants additions to the legislation to make it clear that copyright protection is not being expanded by the law to include linking, or fair use snippets of linked material. This is a red herring and totally unnecessary, raising a straw man to knock down where none exists. It almost looks as if PK is using this as an opportunity to try to sneak in new limitations to copyright protection that have no basis in the law.

PK has a variety of other objections to the draft legislation as well, despite claiming that it supports US journalism and access to trustworthy sources of news. Its objections are hard to reconcile with the objective of enabling the news media to negotiate fair compensation from the dominant internet platforms.

Having the ability to deal with giant digital companies like Google and Facebook to get fair compensation for use of news content is the nub of the issue for news publishers large and small in many countries, including the US. Robust government enforcement of competition law (or threats to amend competition law through new legislation) seems to be one way of ensuring a more balanced negotiation, and of bringing the platforms to the table. Allowing publishers to work together, to the extent that they are interested in doing so, is another. At the end of the day, the final outcome should be a deal that fairly compensates those who invest in gathering and creating the news, allowing them sufficient financial security to continue doing what they do best, while leveraging the ubiquitous reach of the internet to promote greater access to curated, responsible journalism.

© Hugh Stephens, 2021. All Rights Reserved.

Paragraph 5 has been updated to reflect the decision of France’s Competition Authority to fine Google 500 million Euros for failing to negotiate “in good faith” with French publishers.