As you, dear reader, will know, this is a blog focused on copyright and content related issues, rather than politics, although at times there is an inevitable political spillover when dealing, for example, with the copyright dimensions of trade agreements, given that many such agreements are driven as much by political objectives as economic considerations. Given current political circumstances, and the horrific images we see daily as a result of Russia’s appalling and brutal invasion of Ukraine, I have decided to dedicate this week’s blog post to the people of Ukraine and their brave and tragic defence of their homeland. Since so much has already been written about what is happening there, and why, I will try to look at the issue from a slightly different perspective-its cultural and content implications, for Ukraine, for Russia, and for the rest of us.
When it comes to IP protection, and respect for copyright, neither Russia nor Ukraine are exactly paragons of virtue. In the most recent edition of its global IP index, the Global Innovation Policy Center (GIPC) of the US Chamber of Commerce, ranks Russia and Ukraine as numbers 32 and 41, respectively, out of 55 countries. The index measures IP performance across a range of categories, including patents, copyrights, trademarks, design rights, trade secrets, commercialization of IP assets, enforcement, systemic efficiency, and ratification of major international treaties. In the specific area of copyright, there are seven indicators, copyright term of protection, legal measures providing exclusive rights to prevent infringement, injunctive-style relief, frameworks that promote cooperative action against online piracy, scope of limitations and exceptions, existence of technological protection measures and policies requiring that software used by government be licensed. Out of a possible copyright score of 7, Russia clicks in at 2.74 and Ukraine at 1.83. In the category of licensed software, both get a big fat zero. This makes the threat by Russia to legalize software piracy (by creating a compulsory licensing mechanism for software, databases, and technology from companies based in countries that have imposed sanctions on Russia) somewhat less threatening since software piracy is in excess of 90% anyway.
The weak IP track records of both countries is perhaps not surprising given the history of Ukraine as a country that has struggled to establish itself as an independent entity with a free market economy after emerging from the collapse of the Soviet Union. It is perhaps less understandable in the case of Russia but even here we have a country that has struggled with the legacy of a past dominated by central planning where IP was a commodity that could be expropriated by the state or stolen for national purposes. War will not improve this situation.
Although western countries have imposed financial sanctions affecting banks and credit card companies, there have also been numerous voluntary actions taken by western companies in non-financial sectors. So far, among tech and software companies, Microsoft, Apple, Dell, Samsung, Adobe, Cisco, IBM and Intel, have announced they will be stopping sales to Russia. Netflix has announced that it is pulling out. The company had refused to carry Russian news channels on its local-language service, despite a new law requiring it to do so, and has suspended all projects and content acquisitions in Russia. Sony, Warner Bros, and Disney have announced a pause on new film releases. Facebook has barred Russian state media from running ads, as has Google, which has also removed Youtube channels associated with state-controlled Russian media.
When it comes to using the media and content platforms to get the message out regarding what is really happening in Ukraine, Volodymyr Zelenskyy is running rings around Vladimir Putin. Zelenskyy has won the admiration of the world for his valiant personal stand, and ringing, heartfelt appeals for help. Dressed in fatigues and with the daily strain showing clearly on his stubbled face, the comparison with the clinical, almost chilling demeanor of Putin, perched at the far end of a marble table 35 feet from whoever he is speaking to, could not be more stark. Putin has blocked western media and social media and cracked down on any domestic coverage that does not fit his narrative of “liberation”. (It seems he is following the adage of “we had to destroy it to liberate it”). In response, the news broadcaster RT (formerly Russia Today) has been removed from TV screens in Europe, the UK, North America and Australia. From both a tech and content perspective, Russia has been put on the blacklist. Will this mean that Russian authorities will now roll back their recently strengthened enforcement of copyright laws which, according to the 2022 GIPC report, has resulted in “a decrease in online infringement”? Probably.
Culture is another important element of the current crisis; specifically whether Ukraine as a nation has a culture that is distinct from that of Russia. It is an inconvenient fact for Mr. Putin that Ukraine not only has a vigorous, distinct culture, but that Ukrainians are determined to defend and preserve it. Russia, of course, has its own rich cultural heritage—think Dostoevsky to Solzhenitsyn—and there is no doubt that Ukraine and Russia share a number of common Slavic cultural roots, but it is also a fact that Ukraine has its own rich literary and artistic history.
With the invasion of Ukraine, its museums have been scrambling to rescue invaluable cultural artifacts. Museums have been shelled, some destroyed. As some have commented, the destruction of these artifacts amounts to a form of cultural cleansing. Jeremy Maron, curator of genocide at the Canadian Museum of Human Rights is quoted by the Globe and Mail as saying;
“Putin views Ukraine not as an independent nation, but as a part of Russia that was stolen from Russian control. In his perspective, it seems like there is no such thing as Ukrainian culture, so the cultural artifacts are fake evidence of the fake Ukrainian culture.”
UNESCO has expressed its deep concern over the damage to cultural sites. There are seven UNESCO cultural sites in Ukraine including the 11th century St. Sophia Cathedral, that has been instrumental, according to UNESCO, in “the spread of Orthodox thought and the Orthodox faith in the Russian world from the 17th to the 19th century.” It is now under threat from Russian artillery shells and missiles. The Russians are shelling part of their own shared heritage.
Where this will end, (at least at time of writing), is frustratingly unclear. Ukrainians are both resisting and fleeing the carnage, especially women and children, leaving their men behind to fight. Russia’s ultimate end game is not yet clear, although the outcome for the people and culture of the Ukraine does not look positive. Many will flee, some no doubt to Canada and the US, which already host the second and third largest Ukrainian diasporas globally, 1.4 million and 1 million, respectively. (Russia is home to the largest number). Even if Russia installs some sort of puppet regime in Kyiv or attempts to reincorporate Ukraine into Russia, a Ukrainian identity and culture will survive and endure as it has for hundreds of years. And the message of what is really happening in Ukraine will reach the Russian people. Today, no one can block content forever.
Ultimately, Mr. Putin will fail. The Russian army cannot eliminate the soul of a people. At the moment, we are all Ukrainian.
When it comes to online safety—or its flip side, online harms—many countries are grappling with the problem. What is the role of government in establishing guidelines and regulations for the protection of citizens, particularly vulnerable segments of the population, from a range of harms perpetrated by anti-social and even criminal elements via the internet? What is the role of “internet intermediaries”, the internet distribution and social media platforms that the perpetrators use to attack their victims? Are the platforms simply innocent third parties whose services have been hijacked, like phone lines being used by fraudsters to scam victims, or do they play a more active role? Should they be expected to be as much a part of the solution as part of the problem? And if they are to be expected to play a role in controlling harmful content, what is that role and how should they be encouraged (or compelled) to go about it? And, for that matter, what exactly is “harmful content”?
These are among the many questions being examined in various jurisdictions; in the UK through its draft online safety legislation, in the US, where the focus has been on amending the notorious Section 230 legislation that has been interpreted by the courts to shield the platforms from responsibility for harmful content they distribute, and in Canada. Australia has already enacted legislation. All are approaching a similar problem but in different ways, although there are some common themes. Let’s look at both the Australian and Canadian approach and see what lessons they may hold.
The Australian legislation, known as the Online Safety Act, was passed in mid-2021 and came into effect in January of this year. Australia was the first country to establish an eSafety Commissioner in 2015. Initially the remit of this office was limited to online safety for children but in 2017 the mandate of the Office was expanded to cover all Australian citizens. With the implementation of the Online Safety Bill, the Commissioner’s role will expand. The Commissioner has an education, research, investigatory and a limited quasi-enforcement role. (i.e. it can issue blocking requests and blocking orders). The new Act updates and consolidates earlier legislation dealing with cyberbullying of children and, in the words of the Australian government;
“…retains and replicates certain provisions in the Enhancing Online Safety Act 2015, including the non-consensual sharing of intimate images scheme; specifies basic online safety expectations; establishes an online content scheme for the removal of certain material; creates a complaints-based removal notice scheme for cyber-abuse being perpetrated against an Australian adult; broadens the cyber-bullying scheme to capture harms occurring on services other than social media; reduces the timeframe for service providers to respond to a removal notice from the eSafety Commissioner; brings providers of app distribution services and internet search engine services into the remit of the new online content scheme; and establishes a power for the eSafety Commissioner to request or require internet service providers to disable access to material depicting, promoting, inciting or instructing in abhorrent violent conduct for time-limited periods in crisis situations.”
That is a lot of power, and it would seem similar to what the Canadian government is trying to achieve with its “online harms legislation”. However, even though the proposed online harms definitions in Canada are much more tightly constrained than under the Australian legislation or the draft Online Safety Bill being examined in the UK, there has been a lot of push-back from various groups. In 2021 the Department of Canadian Heritage issued a discussion paper laying out a proposed approach to address harmful online content, inviting public comment. And feedback they got.
As is the case with Australia, the proposed legislation would establish an office to oversee the legislation, called a “Digital Safety Commissioner”. In Canada, the Commissioner’s responsibilities would focus primarily on administration and enforcement, including the power to receive complaints, conduct inspections for compliance, issue public reports and compliance orders, recommend administrative penalties up to $10 million dollars, refer offences for non-compliance to prosecutors with fines reaching up to $25 million, and, in exceptional circumstances, apply to the Federal Court to seek an order requiring Telecommunications Service Providers to implement blocking or filtering in cases involving child sexual exploitation and/or terrorist content. This targeted use of site-blocking, which I wrote about earlier (Site-blocking for “Online Harms” is Coming to Canada), would be used as a last resort and applied to offshore sites beyond the reach of Canadian courts. The Commissioner’s Office would be backstopped by a Digital Recourse Council (the title is self-explanatory) and both the Commissioner and Recourse Council would have the benefit of an industry Advisory Board. Legislation would be restricted to the following five categories of “harms”, all of which fall under the criminal code; (1) terrorist content; (2) content that incites violence; (3) hate speech; (4) non-consensual sharing of intimate images; and (5) child sexual exploitation content.
Not covered are a range of harmful but possibly legal activities and content, such as cyberbullying, defamation, online harassment, disinformation, false advertising and so on, the so-called “awful but lawful” content. Notably, the proposed UK legislation would cover such content, at least insofar as dominant platforms are concerned.
Despite its relatively narrow focus, and the fact it would establish an independent regulator subject to a Recourse Council, the proposed Canadian legislation has been heavily criticized by civil liberties and “internet freedom” groups. Some have objected to the requirement for platforms to inform law enforcement of illegal activities, claiming this would amount to unauthorized surveillance, although the criminal reporting requirement would be limited to cases involving “serious imminent harm” or threats to national security. I find it hard to imagine that any responsible business would deliberately turn a blind eye to such information and the legislation would give them needed legal cover to act. Indeed, it would require them to do so.
Other critics complained that the requirement for platforms to monitor for harmful content on their services and take it down within 24 hours of being flagged would result in censorship, especially given that automated screening mechanisms would likely be used, possibly resulting in “false positives” and overzealous screening. With regard to the proposed remedy of site blocking for offshore sites distributing material that is sexually exploitive of children or which promotes terrorism, critics complained this would violate net neutrality. This is the usual canard trotted out when there is any suggestion that some reasonable controls should be placed on content on the internet, even if illegal and subject to court review. But net neutrality has nothing to do with permitting illegal content to remain online in defiance of court orders.
For some critics, any regulation of the internet is too much. Nonetheless, as is the case with any government regulatory intervention, it is important to get the balance right between necessary oversight and restraint, and the lightest regulatory touch needed to preserve individual freedoms. The consultation process allowed for that input and the results were published in February in a government document titled, “What We Heard”. Somewhat unusually, submissions were not made public, apparently out of concern that some groups would not want their experience with harmful content shared publicly, although other groups released their submissions for public consumption. Instead, the government summarized input from the 422 unique submissions using opaque language such as “some stakeholders”, “multiple respondents”, “a few respondents”, “certain respondents”, “a select few”, and “a majority of respondents” etc. We are left to guess at who said what. It is hard to summarize the input on the multiple elements of the proposal, but one phrase perhaps best encapsulates the feedback received; “Regarding the substance of the proposal, although multiple individuals and organizations welcomed the Government’s initiative, only a small number of submissions from those stakeholders were supportive, or mostly supportive, of the framework as a whole.”
This suggests that there will be a return to the drawing board and perhaps more consultations, but it is clear that the government intends to proceed in establishing measures to help ensure online safety. For one thing, it is in the mandate letter of the responsible minister. This is buttressed by the line in “What We Heard” noting that;
“Almost all respondents commented that Government regulation has a role to play in addressing online harms and in ensuring the safety of Canadians online.”
A digital safety regulator will be part of the solution.
“The introduction of the regulatory bodies was broadly supported, as many respondents thought the new regulators seemed fit for purpose.”
Reading through the comments on the various elements of the proposal, it is evident that comments were all over the map, no doubt reflecting the background of various intervenors from individuals (350), civil society (39), industry (19) and academics (13). Then there were roughly 9000 “click and submit” interventions organized by cyberlibertarian lobby groups like Open Media. Many of the submissions contradicted each other. And of course, even counting in the Open Media claque, this is hardly a representative sample of what 36 million Canadians think, and the government knows this. While I can’t prove it, I am willing to bet that most Canadians are fed up with toxic, dangerous, and predatory content on the internet and want the platforms to take some responsibility for what they allow to be distributed. They also think there is a role for government to play in ensuring that the platforms, who until now have managed to duck accountability for content that they permit, sometimes promote, and often indirectly profit from, are held to account. (The UK is proposing an interesting accountability feature; a “designated executive” who will be personally held to account for a new criminal offence of failing to deal with “repeated and systemic failings that result in a significant risk of serious harm to users.”)
Canadians are not the only ones concerned. Online safety is a hot button issue in many democracies. While Australia is leading the way, the UK and Canada are moving ahead at their own pace and the US is addressing (slowly) Section 230 and kid’s online safety. The children’s safety issue even rated mention in the U.S. State of the Union address delivered by President Biden on March 1. It’s important to get the balance right, but equally important not to let the platforms off the hook. With great power (and great profits) comes great responsibility.
February 21-25 is Fair Use/Fair Dealing week, so proclaimed by a number of participating organizations in the US and Canada and organized by the Association of Research Libraries under the umbrella of fairuseweek.org. As in past years, there will be a series of online events extolling the virtues of fair use and fair dealing. Fair dealing and fair use are firmly embedded as part of the copyright ecosystem and have been for many years, although the interpretation of what constitutes “fairness” is far from static.
This is the definition of fair use and fair dealing from fairuseweek.org’s website;
“Fair use and fair dealing are essential limitations and exceptions to copyright, allowing the use of copyrighted materials without permission from the copyright holder under certain circumstances.”
Fair enough. The term “under certain circumstances” says it all. This is the very crux of the issue when determining whether or not a use, without the permission of the rights-holder, is fair. Courts are periodically called on to determine what is fair and what is not. In the case of fair dealing in Canada, there are a number of “exceptions” or “allowable purposes” where permission is not required. These are research, private study, education, parody, satire, criticism, review, and news reporting. But not just any permissionless use that falls into these categories is necessarily “fair”. Other factors figure into a fairness evaluation, including the amount of the work copied, the use to which the copies are to be put, the nature of the work, the alternatives available, and the impact of the dealing on the work, i.e. whether the copying might have a detrimental effect on potential sales of the originals. These must be weighed to determine if a use not authorized by the rights-holder is legal (fair).
From the above criteria, which are drawn from the six factors to be considered when adjudicating fair dealing outlined by the Supreme Court of Canada in the CCH v Law Society copyright case in 2004, (which in turn resemble the four fair use factors used by US courts), you might conclude that an unauthorized use that (a) involved extensive or even total copying of a work that had been (b) produced explicitly for a particular educational market, like a work used for instruction in a university course, and which, as a result of the copying, (c) had suffered heavy damage to its sales potential even though (d) the work, as a readily available commercial alternative, could be easily purchased or licensed, would not meet the bar for fair dealing, even though it fell within a specified exception such as education. If this is your view, you will be at odds with most if not all of the folks from the Association of Research Libraries who are bringing you fair dealing week in Canada.
Even though this hypothetical work may have been copied, chapter by chapter, in its entirety by different professors for different courses, and even though the sale of copies of this specialized work to students by the university effectively demolishes any commercial market for the work, Universities Canada has declared this to be fair dealing in their view. As a result, most of its members, notoriously including York University, have decided to avoid any payment to rights-holders, refusing to obtain a licence from Access Copyright, the collective that represents authors and publishers, or in many cases to license the works directly from rightsholders. This has resulted in a long-running lawsuit that has pitted Access Copyright against York. While parts of this lawsuit were decided by the Supreme Court of Canada in July of last year, the fair dealing issue remains unclear.
If it’s all a bit arcane to the casual reader, I will try to summarize. Universities and school boards, prior to 2011-12, used to obtain a licence from Access Copyright (AC) allowing them to copy materials in AC’s repertoire (i.e. AC had signed an agreement with the copyright owner, either an author or publisher, allowing it to license the works of the rights-holder and collect royalties on their behalf. These works then went into AC’s “repertoire”). The cost of the licence was based on estimates of the amount of copying occurring during instruction over a given period of time. The licence did not allow for unlimited copying, only copying within specified limits, such as up to ten percent of a work, one chapter in a book, one article in a magazine etc. Copying beyond those limits required further permissions. The licence was based on a per capita cost per student. At one time the fee per university student per year was $26. It is considerably less now due to market pressure to reduce licence fees as a result of the expansion of fair dealing to encompass education.
Under this licensing system, if AC and the users could not agree on a royalty fee, the issue was punted to the Copyright Board of Canada to set a “tariff”. The Board held hearings to determine a fair and equitable royalty rate for post-secondary copying covered under the tariff. Once the Board approved the tariff, it was accepted that it was applicable to all those who used material held in AC’s repertoire unless they had reached their own licensing agreement with the copyright collective. This was the situation that prevailed until about ten years ago. Then it all began to unravel.
In 2012 the Supreme Court of Canada, in a case known as Alberta (Education) v. Canadian Copyright Licensing Agency (Access Copyright),ruled that the allowable purposes of “research and private study” should be given a “large and liberal interpretation” in the context of practices prevailing at the time (i.e. teachers copying materials for classroom instruction). In effect, this meant that if a teacher copied short excerpts of materials for use in classroom instruction to supplement the primary textbook, this was an allowable fair dealing because the teacher was exercising, on behalf of students, their “research and private study” rights. That same year the Copyright Modernization Act was passed adding “education” to allowable purposes under fair dealing . As a result of that legislation, Universities Canada backed out of an agreement on a new model licence with AC that would have resolved the issue of institutional copying and updated copyright guidelines for the digital age. The stage was set for a lawsuit to try to settle the issue. When York University refused to pay the interim tariff established by the Copyright Board, AC sued. York’s position was that it had no obligation to pay because its use was either covered by fair dealing, as exemplified by its Fair Dealing Guidelines applicable to students and faculty, or was already licensed.
Round One went to AC in 2017. The Federal Court ruled that York was obliged to pay the “mandatory tariff”, and that York’s use was unfair. It is worth quoting some excerpts from the judgement regarding York’s supposed fair dealing;
(Para 14) “York`s own Fair Dealing Guidelines (Guidelines) are not fair in either their terms or their application”
(Para 20) “The fact that the Guidelines could allow for copying of up to 100% of the work of a particular author, so long as the copying was divided up between courses, indicates that the Guidelines are arbitrary and are not soundly based in principle”
(Para 25) “It is almost axiomatic that allowing universities to copy for free that which they previously paid for would have a direct and adverse effect on writers and publishers”
(Paras 28 and 245) “The complete abrogation of any meaningful effort to ensure compliance with the Guidelines—as if the Guidelines put copyright compliance on autopilot—underscores the unfairness…York`s approach to these copyright infringing actions is consistent with its wilfully blind approach to ensuring compliance with copyright obligations, whether under the Interim Tariff or under the Fair Dealing Guidelines”
(Para 272) “It is evident that York created the Guidelines and operated under them primarily to obtain for free that which they had previously paid for”
(Para 353) “the Guidelines have caused and will cause material negative impacts on the market for which Access would otherwise have been compensated for York’s copying”.
That is all very clear. York’s dealing was not fair. York appealed but this time based its arguments on challenging the mandatory nature of the Copyright Board’s tariff (interim or not). This time they were more successful. The Federal Court of Appeal (FCA) ruled that, based on historical precedent and close reading of the 1988 and 1997 legislation, the tariff was not mandatory when applied to a user even if the user was continuing to make use of works covered by the tariff. This somewhat bizarre and unexpected interpretation undermined the basis of collective licensing in Canada and was appealed by AC to the Supreme Court of Canada (SCC). While negating the mandatory nature of the tariff, the FCA nonetheless upheld the Federal Court’s decision on the fair dealing issue. While the FCA confirmed that York’s copying guidelines were not fair, AC was left with no recourse since it does not have the requisite rights to maintain a copyright infringement lawsuit. While AC collects royalties for rights-holders, it is not a rights-holder itself. Therefore, if a fair dealing case is to come to trial, it has to be launched by a rights-holder. This means that individual rights-holders are required to bring suit for individual infractions against multiple universities, an impossible and nonsensical situation considering the requirements for documentation, which is why collective licensing was established in the first place.
With the Federal Court of Appeal having blown a hole in the fabric of collective licensing by ruling that mandatory tariffs were not binding insofar as users were concerned, the damage was compounded by the Supreme Court when it upheld the FCA’s decision on the (non) mandatory nature of tariffs. With respect to fair dealing, the Supreme Court did not issue a ruling, considering the question moot since York had no obligation to pay the tariff established by the Copyright Board. But the SCC did not stop there. After dismissing AC’s appeal on the mandatory tariff question, Mme. Justice Abella, in delivering the decision, editorialized on the lower court’s earlier ruling regarding York’s Guidelines. While declining to endorse York’s request to declare that its Guidelines were fair, writing for the Court, she noted;
(Para 87) “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.”
Although the SCC refused to issue a Declaratory Statement legitimizing the Guidelines, and although she recognized that the SCC was not retrying the fair dealing aspects of the case, Justice Abella then proceeded to cast doubt on the original fair dealing decision against York. She commented that the Federal Court had looked at infringement only from the institution’s perspective and had failed to take into account the user’s right of individual students. This commentary, known in legal circles as obiter dicta, is not binding on future courts but is potentially damaging if and when a fair dealing case is brought by a rights-holder against York or any other educational institution. This will cast yet more doubt on what is–and is not–a fair dealing when it comes to educational copying.
There is no question that the current very broad interpretation of fair dealing in Canada has caused immense damage to the Canadian publishing industry and has lined the pockets of educational institutions at the expense of authors and creators. Instead of spending hundreds of thousands of dollars fighting the representative of authors and publishers in court, and spending millions more to hire additional staff to screen and vet copyright compliance, York and other universities in English Canada could have simply acquired a licence from Access Copyright, as the universities in Quebec have done with respect to AC’s Quebec counterpart, Copibec. The current tariff set by the Copyright Board is $14.31 per student or less than .0004% of the average annual cost per student, amounting to less than four cents a day per student.
There is nothing “fair” about the actions taken by York or the other institutions that have refused to compensate authors and publishers for using their works by prying open the fair dealing exception to the fullest extent possible, aided and abetted to date by the Supreme Court of Canada. The universities should do the sensible (and “right”) thing and license the content they are using for instruction. With the Supreme Court having allowed the gutting of the Canadian educational publishing market, it is incumbent on Parliament to re-introduce some balance. It can do this, as recommended in 2019 by the Standing Committee on Canadian Heritage, by limiting the education fair dealing exception–when applied to educational institutions–to circumstances when the work is not commercially available. The Committee also recommended that the Government of Canada promote a return to licensing through collective societies. To do this, legislation will be required to fix the anomaly of mandatory tariffs that are mandatory only for one of the parties, (licensors), but not on users, thereby restoring the viability of collective licensing in the publishing sector in Canada. That would bring some fairness to fair dealing in Canada and would be something to celebrate during fair dealing week next year.
The headline in the local paper grabbed my attention. “City of Vernon transfers copyright to legendary Ogopogo to B.C. Indigenous nations”. It went on to say that “The legal rights to the legendary creature in a British Columbia lake have been transferred to an alliance of Indigenous nations who say the Ogopogo has always been part of their spiritual teachings.” Well, that’s probably as it should be, and is fully consistent with the spirit of reconciliation with First Nations that is epitomized by the establishment of a new public holiday in Canada, Reconciliation Day. (September 30). But hang on a minute. How could the City of Vernon (a community of about 40,000 located near the north end of Okanagan Lake) own the rights to a mythical lake monster? I mean, you can’t copyright the Ogopogo any more than you can copyright the Loch Ness Monster, the Sasquatch or the Yeti, the unicorn or any one of a host of other imaginary creatures. You can’t copyright an idea, only the expression of an idea.
No-one would be surprised to learn that imaginary creatures like Godzilla, The Hulk and Superman are protected by copyright and trademark registrations, since they were conjured out of thin air by their creators. (Japanese film producer Tomoyuki Tanaka in the case of Godzilla, writer Stan Lee and artist Jack Kirby in the Hulk’s case and Jerry Siegel and artist Joe Shuster for Superman). They didn’t “exist” (in peoples’ minds) until their creators put them in concrete form, through films, artwork, comic books etc. The copyright on the creation was then sold and commercialized. But what about other imaginary or mythical creatures such as sea monsters, denizens of deep lakes and various bizarre and unproven forms of life otherwise known as cryptids, such as the Ogopogo, passed on by legend and oral tradition? Surely it would be impossible to copyright them—and by extension have the right to license the concept of the creature and in turn prevent others from using it without authorization.
While I could understand that Vernon wanted to give whatever IP (intellectual property) rights that it held in the Ogopogo to the Okanagan Nation Alliance–representing indigenous groups in the Okanagan region–as a gesture of reconciliation, the copyright nerd in me came out. I was itching to find out exactly what it was that the City had transferred. Perhaps it wasn’t a copyright after all, but a trademark registration that was transferred? In a CBC report published back in March when the story first broke, there is reference to transfer of both copyright–in the text–and trademark–in an embedded interview with Okanagan Indian Band Chief Byron Louis. Maybe the journalist mixed up the two, but a trademark registration on the Ogopogo appeared to be a logical conclusion. I began my search, and eventually, with the help of staff at the City of Vernon, Jadon Dick of the Okanagan Publishing House, and the Canadian Intellectual Property Office, I think I have solved the mystery. Read on.
The press reports covering the story reported that the copyright had originally been registered in 1953 by Arthur “Gil” Seabrook, a local broadcaster, as a promotion. I suspect he wanted to “one-up” the neighbouring City of Kelowna, located 50 kilometres to the south of Vernon, and lay claim in some way to the lake creature. Kelowna’s waterfront has, since 1960, sported a large concrete sculpture of the Ogopogo, and is a popular tourist attraction. Clearly Kelowna was not deterred by Seabrook’s supposed copyright on the mythical monster. It was reported that in 1956 Seabrook assigned his rights to the City of Vernon, substantiating the supposition that this was all about civic rivalry. Seabrook lived a long life and passed away in 2010 at the age of 97. His obituary, published in the Vernon News, says that;
“At one point, as a marketing / promotion effort, he personally obtained the registered trade-mark for the word “Ogopogo” and an artistic rendering of the famed lake monster. This, much to the chagrin of Kelowna and other Okanagan cities. Eventually the rights to use “Ogopogo” were offered to the City of Vernon … where they basically remained dormant”. Ah, the smoking gun (or so I thought).
I decided to search the Canadian Trademark Database for information as to what was registered under Ogopogo. I found 17 entries for use of various forms of Ogopogo related to a range of product categories, from books to wine to chocolates, to suntan products, clothing, and soft drinks. There are also many other businesses in the region that use the name Ogopogo without registering it, e.g. Ogopogo Giftland, Ogopogo Lawn Sprinklers, the Ogopogo Motel, and so on. Registered trademarks must be associated with a specific product category and must be renewed every ten years. Many of the registered marks had lapsed due to non-renewal, and none were in the name of the City of Vernon. I thought it unlikely that Vernon would have renewed their trademark registration—at a cost to the taxpayer of around $500 net of legal fees—every ten years, so perhaps it wasn’t a trademark registration after all. So, what was it? It was time to search the Copyright Database maintained by the Canadian Intellectual Property Office (CIPO).
I found 18 listings for registered copyrighted works related to the Ogopogo. They included books, posters, artwork, videos (in some cases, supposedly of the creature itself) and dramatic works. However, it is not compulsory to register a copyright. The mere act of creation and fixation (embodiment in concrete form, such as publication, a photograph, a painting etc.) is sufficient, so I have no doubt that there are many more works out there based on the Ogopogo that are subject to copyright protection that have not been registered. And then there is the fact that the online database only goes back to 1991. What about Gil Seabrook’s registration? What did he register? I asked the CIPO if they could confirm what was registered.
They responded, but not very helpfully.
“The Copyright Office does not conduct searches for clients. The Canadian Copyrights database will allow you to search all of the Canadian copyrights registered from October 1991 to present day, free of charge…Registrations prior to October 1, 1991 and dating back to 1841 cannot be searched online. They are stored in the public search room of the CIPO Client Service Centre. You may wish to visit the Client Service Centre or hire a freelance searcher to search on your behalf…You can also hire a registered trade-mark agent to conduct a search on your behalf. Open Monday to Friday (except statutory holidays) from 9:00 a.m. to 4:00 p.m. (Eastern Time) on appointment only.
It should also be noted that copies of the works themselves are not part of the records kept at the CIPO. The Copyright Register only contains information such as the names of the authors and owners, the titles and categories of works, registration dates and grants of interest.”
That’s great if you are a resident of Ottawa. Even then, if you found the 1953 registration, it still wouldn’t tell you what was registered.
Now remember that Gil Seabrook’s obituary had said that after he had transferred the “trademark” on Ogopogo to the City of Vernon, it had remained dormant. That is mostly, but not entirely, true, and this is why we are discussing this issue today. Back in 1984, a local author, Don Levers, was writing a children’s book called “Ogopogo-The Misunderstood Lake Monster”. It was self-published and sold over 25,000 copies. It seems that Mr. Levers had heard stories about the City of Vernon owning the copyright on Ogopogo, so he played safe and asked the City’s permission to publish his book. It was freely granted, subject to acknowledgement in the book. Fast forward to March, 2021 and Mr. Levers has decided to publish a sequel. Once again he, along with his publisher, Okanagan Publishing, approached Council for permission to use the word. Press reports stated he required Council’s permission “because the city has the copyright to the word Ogopogo”. Once again, Council agreed, provided that Levers acknowledged the City in a prominent and suitable location. He agreed to do so, but that is when the reconciliation issue came to the fore.
Vernon’s heretofore long-forgotten and dormant copyright ownership suddenly was put in the spotlight. Questions were raised about why the City held title to the name Ogopogo, when it was based on a native legend. After all, didn’t the Syilx First Nation really “own” Ogopogo? There were murmurings of “cultural appropriation”. The Guardian picked up the story, framing it as an indigenous nation trying to reclaim its culture. That is when Council voted to relinquish its copyright and assign it to the Okanagan Nation Alliance, which was happy to receive it. The Globe and Mail reported that “For $1, council voted to assign and transfer to the Okanagan Nation Alliance all copyright, title, interest and property including trademark rights arising from the commercial and non-commercial use of the Ogopogo name”.
Except that is not exactly what happened. The City of Vernon Council Minutes for October 12 make it clear that what Vernon transferred to the Okanagan Nation was;
“all copyright, title, interest, and property in the Work, (emphasis added) together with the right and title to any derivative works arising in any way from the Work, and any trademark rights arising from the commercial or non-commercial use of the foregoing copyrighted protected works or derivates thereof and any goodwill related thereto, without reservation or exclusion, together with all profit, benefit, and advantage that may arise from printing, reprinting, or selling said copyrights for the remaining term of the copyright”.
What was transferred were the rights to “the Work”, not the name Ogopogo. But what was the work? It was registered under Copyright #102327 on June 9, 1953, but we may never know what it actually was. The original copyright certificate, kindly provided by the City of Vernon (see below), simply says that Seabrook registered an “unpublished literary and artistic work entitled Ogopogo”. An unpublished work can be copyrighted as long as it is “fixed”, but since it was unpublished, it may no longer exist, and as CIPO made clear, when a work is registered no copies of the work itself are retained. Certainly, the City of Vernon appears to have no idea of what the work contains nor, it appears, does anyone else. Seabrook is no longer around to ask.
I asked Jadon Dick, founder of Okanagan Publishing (Levers’ publisher) why he and Levers approached Vernon to clear the copyright when multiple books have been published about the Ogopogo without doing so. All that Vernon owned was copyright to an unpublished work. Mr. Dick replied that he had not known about Vernon’s copyright before speaking to Levers. His impression was that in the view of the CIPO, the name Ogopogo was not copyrighted (this is not surprising, since a name cannot be copyrighted) but since Levers had got Vernon’s approval the first time around, it seemed to make sense to ask for approval for the sequel. As publisher, he wanted to cover all the bases. He felt that if Vernon had some form of copyright, even though it was not enforcing it, it would be better to have permission before moving forward with the book, rather than have a controversy later which might negatively affect sales and marketing. This was “due diligence” at its best. It was only after they approached Vernon, and winkled out the old copyright document, (and got permission from the City to use the word Ogopogo, which technically they had no right to grant) that they realized the nature of the copyright and that no permission was in fact required. Nothing in Seabrook’s earlier unpublished work was used, and Dick has no idea what that work consists of. The copyright approval request could have become a non-issue but by this time, the reconciliation train had left the station.
Dick goes on to say that the Ogopogo copyright is more symbolic than anything else, and that despite all this, the gifting of the copyright to the Okanagan Nation Alliance is a symbol of giving back control of the Okanagan Lake Creature.
“Okanagan Publishing House is/was pleased to hear that the City of Vernon gave the Ogopogo copyright to the Okanagan Nation Alliance. We see it as a broader movement to give back control of the Okanagan Lake Creature and how we speak about the Nx̌ax̌aitkʷ/Ogopogo to the Indigenous people of this area. This is something that we seek to do in all of our publications.”
So that solves the mystery of the City of Vernon’s copyright. If Levers had not, in an excess of zeal in 1984, sought permission to use the name, the issue would not have come up in 2021. The whole question of cultural appropriation is seen very differently 35 years later. Although Vernon never had the copyright to the name Ogopogo, the assignment of the name makes a good hook for a story about reconciliation. The Okanagan Nation saw the City of Vernon’s actions as “respectful”, even if what they actually got, for $1, were the rights to an unpublished work. But more important, they got recognition of the fact that the lake creature is indelibly linked to their traditional culture, and an acceptance that they should have some say over it.
However, I cannot resist adding one final, ironic point regarding the name Ogopogo. Although native groups had an oral tradition of a lake creature, it had an entirely different name. It was known as N’ha-a-itk and was probably never considered by the original peoples as an actual creature but rather the spirit of the lake, much as certain geographical features are imbued with spiritual meaning by Indigenous groups.
The name Ogopogo was actually conferred by tourism officials in the 1920s and drawn from an old English music hall song (listen here), whose lyrics included;
“I’m looking for the Ogo-pogo, The funny little Ogo-pogo.
His mother was a polliwog, his father was a whale,
I’m going to put a little bit of salt on his tail.
The N’ha-a-itk of the Syilix and the Ogopogo that was labelled by officials keen to promote tourism have become very different things, although springing originally from the same source. You can’t put that genie back in the bottle. For better or for worse, the well-known Ogopogo name and image will no doubt continue to adorn pop and wine bottles, boxes of chocolates, motels and RV parks, bed and breakfast establishments, a stucco and masonry business, a gymnasium, a moving and storage outfit—even an air cadet squadron, and will continue to feature in books, plays, and artwork.
If Vernon didn’t hold the copyright to the name Ogopogo, then the Okanagan Nation Alliance (ONA) doesn’t either despite the assignment of whatever rights Vernon had–or thought it had. People remain free to continue to express their own idea of what the Lake Okanagan water spirit is, what its characteristics are and to tell stories about it. And they can continue to copyright those artistic expressions and creations, but hopefully will do so in a way that is respectful of the creature’s cultural connotations.
At the end of the day, this story is not really about copyright. It is about reconciliation and respect. It was an appropriate decision for Vernon City Council to turn over its “rights” to the First Nations of the area. Vernon’s gesture of reconciliation—regardless of whether it actually involved transfer of copyright over the Ogopogo name or not—will remain a symbolic token of goodwill and a reaching out to First Nations groups that seems to have been well appreciated by the recipients.
On January 1, 2022, a new law entered into force in the state of Maryland requiring that authors and publishers holding the rights to an e-book title must offer unlimited copies of that title to public libraries in the state at an undetermined “reasonable price” if and when the title is offered to individual consumers. This law puts Maryland’s heavy thumb on the scale of copyright, subjecting e-book rights-holders to a “compulsory licence” thus depriving them of the right to decide when, where and how to release works to which they hold the rights. The law is opposed by the American Association of Publishers (AAP), the Authors Guild and industry associations representing music publishers, newspaper publishers and the motion picture industry for fear that if compulsory licensing is accepted for e-books, their sectors could be next. It is supported by the Maryland Library Association among other groups advocating for the library community.
The AAP is seeking an injunction to stay implementation of the state legislation on the grounds that it usurps federal copyright law. Maryland claims jurisdiction on the grounds of contract law. A court hearing on the injunction was held earlier this week, on February 7. According to the judge hearing the case, the decision will come “soon” (likely one or two weeks). Maryland’s actions, which are being echoed by several other states including New York, Rhode Island, Illinois, Missouri and Massachusetts, have scrambled the complex (and mutually beneficial) relationship that has prevailed for many years between authors, publishers and libraries, this time with a particular focus on e-books. Let’s look briefly at the history of that relationship.
In the beginning there were manuscripts, those beautiful, hand-crafted documents laboriously produced by skilled craftsmen (yes, I think they were likely all men, probably with tonsures) in the Middle Ages. Then along came Mr. Gutenberg with his introduction to Europe of movable type. (Contrary to popular belief, Gutenberg did not invent type; that honour belongs to the Chinese who were printing, and even using movable type some 500 years before Gutenberg. What else did the Chinese invent? Why golf of course!). The Koreans and the Mongols also used movable type a couple of centuries before Gutenberg. However, it was Gutenberg who popularized the technology and his creation led to an explosion of printed works. This, in turn, led to various disputes over who had the right to print what. Various monopolies were awarded to various printers in various countries, but invariably someone who was not awarded a printing licence decided to do so anyway. Naturally this led to disputes, the passing of laws to regulate printing and finally, in 1710, what has become known as the first modern copyright law, the Statute of Anne in Britain which gave the reproduction right to authors rather than printers or publishers.
Since Gutenberg’s time there have been many advances in printing and publishing, but the principle of reproduction rights remained more or less the same, with the end product being a book in physical format. It may have been printed on vellum and bound in leather or printed on cheap paper with just a paper cover, but it was a work the purchaser could pick up and hold and put on their bookshelf. Or it could be purchased by a library and put on the shelf of a library for loan. And while the purchaser could not infringe copyright by reproducing the book, they owned it and were free to do with it what they wished-resell it, lend it to a friend, keep it, trash it—the choice was theirs, subject to parallel import regulations in some countries. (In the US, this is known as the ”first sale doctrine”.)
The connection between printed books and libraries is a long one. When the Statute of Anne was passed, one of the requirements for a work to enjoy copyright protection was that “nine copies of each book or books, upon the best paper” shall be delivered to the warehouse of the Company of Stationers for the use of the royal library and the libraries of the major universities in England and Scotland. This act of deposit is replicated today in the United States by the mandatory deposit requirements of the US Copyright Office. “This law requires that two copies of the best edition of every copyrightable work published in the United States be sent to the Copyright Office within three months of publication. Works deposited under this law are for the use of the Library of Congress.” Most countries where there is a significant publishing industry have similar requirements. In Canada, Canadian publishers are required to make two copies of books published in Canada available to the National Library under the Legal Deposit Program of the Library and Archives of Canada Act (2004).
If copyright, books, and libraries have a long and close connection, so too do authors, publishers, and librarians. Without authors and publishers, the raison d’être for libraries would disappear, even though today libraries have become much more than places for just the circulation of books. In addition to their collections of audio-visual materials, they are in many cases also quasi-community centres where clients access the internet (and through the internet reach government services and other sources of information), have their pre-schoolers entertained with story-time, as well as, in some cases, simply to gather to study, socialize or keep warm.
Most authors love libraries, understanding that they are essential tools in the promotion of literacy and love of books. There are exceptions, as I wrote about here (“Are Libraries the Enemy of Authors and Publishers?”). Canadian publisher Kenneth Whyte launched a diatribe against public libraries, accusing them of undercutting book sales by “pimping free entertainment to people who can afford it”. Whyte’s crusade fell flat and he was promptly disavowed by the mainstream publishing business. The Executive Director of the Association of Canadian Publishers wrote, “Canadian publishers recognize that libraries are an important part of the reading ecosystem and a primary channel for book discovery…Library sales are also an important part of the publishing business model”. It’s also worth noting that in Canada, Australia, New Zealand and the UK (but not in the US), in addition to earning royalties on sales of books to libraries, authors generate revenue when their books are loaned out by libraries through the “public lending right”.
While authors and publishers profess to love libraries, the reverse does not always seem to be true. Some librarians are in the forefront of attempts to weaken copyright laws, the framework that authors depend on to earn a living. I recently reported on the situation in New Zealand, (“Why is New Zealand’s National Library Declaring War on Authors”) where the National Library unilaterally decided to “donate” hundreds of thousands of books, including many under copyright, to the controversial Internet Archive (IA) in the US. (After a major hue and cry from New Zealand authors, the National Library finally backed down and cancelled the “donation”). The IA is the sponsor of the very contentious “Controlled Digital Lending” (CDL) concept. The way CDL works is the following. A library buys a book (or several copies of a book). Rather than lending the book, it scans it (digitally copies it). It then places the physical book, or books, in storage, and instead lends out the digital copy or copies. In this way, it is argued that CDL respects the established rules around library lending, i.e. a book cannot be loaned to a different client until it has been returned by the first borrower. In the case of digital copies, no further lending occurs until the original loan is over. In the case of a physical book, it would be returned to the library; with a digital work, the copy expires on the reading device.
There are two major problems with the CDL concept from the perspective of authors and publishers. The first is that in 2020 the Archive unilaterally decided to abrogate its own self-declared CDL rules and instead suspended the limitation on lending. It decided to loan out unlimited copies regardless of the number of original works in the library’s holdings. Using COVID-19 as the excuse, the Archive declared that it was establishing a “National Emergency Library”. After a brief moment when the media jumped in and applauded the initiative, suddenly most people realized that the organization was making fast and loose with other peoples’ property. Even if they had the right to lend digital copies under the CDL theory, which is far from a sure thing, suspending CDL to lend unlimited copies was a step too far. Even though the IA quickly backed down, its actions provoked a lawsuit from the publishing industry challenging not only the National Emergency Library but CDL itself. That case is still unresolved.
The second problem is that making a digital copy of a work conflicts with the exploitation of digital rights held by authors and publishers. A scanned copy of a physical work is different from a licensed digital edition of a work (an e-book), yet it can directly interfere with the market for the latter. The purchaser of a hard copy book does not acquire the digital rights by virtue of that purchase. E-books come with their own rights and licensing conditions, just as audio-books do. Even though the content may be the same, they are different products. Watching a film of an opera performed at La Scala and attending a performance at La Scala are two very different things, even though the two productions have the same music, same costumes and same libretto.
E-books have been developed and made available to the public—and to libraries—under specific licensing conditions. E-books are popular with library clients because downloading a book is so much easier than making a trip to the library to get the book, and then another to return it, especially during the pandemic, and then maybe paying a fine because the book is late. As a result, libraries have got into the e-book business in a big way, often licensing multiple copies of a work (under terms where they pay more per copy than an individual user would), and then lending out these e-copies to borrowers.
The terms for licensing to libraries usually differ from the terms offered to individuals. As I mentioned, the cost per copy is usually several times higher than an individual licence, and the licence may sunset and need to be renewed after a set period of time (e.g two years), or after the work has gone out on loan a specified number of times. In addition, some publishers of e-books have exercised their rights to limit the number of copies sold to a library, or to hold back licensing the book for a short period of time in order not to cannibalize the market for sales (licensing) to individual readers. This is similar in concept to the “windowing” strategy used by major film studios whereby the DVD or streaming release of a film is held back for several weeks while the film plays in cinemas.
Many libraries and librarians don’t like these licensing terms, and some are pushing to have e-books treated identically with hard copy books. In other words, from their perspective, you should be able to purchase an e-book rather than licence it, and once you have purchased it, the buyer—a library or anyone else—should be able to do anything they want with it other than copy it, just as with a hard-copy book.
This position fails to understand the difference between books and e-books, especially in the library context. E-books have eliminated all the “friction” that accompanies the act of borrowing a book from a library for the consumer such as physically visiting the library at least twice, and maybe paying a fine if overdue. Because a library cannot hold infinite numbers of copies, popular titles are often out on loan and readers need to reserve them. These “friction factors” offset the free cost of borrowing for readers and persuade many consumers that it would be better to buy the book and avoid the hassle. This was a trade-off that generally worked well for libraries, publishers, booksellers and the public. Moreover, a popular edition of a hardcopy book at a library will need to be replaced after a certain number of loans, usually around 50, because of wear and tear. However, with an e-edition all friction disappears, and the digital copy can be loaned indefinitely with no need for replacement, ever. That is why publishers have had to move to a licensing model for e-books. They are dealing with a different product requiring different management and marketing.
This reality has not deterred some in the library community from pushing to have e-books treated exactly the same as physical works. In the US a spate of legislative initiatives has been launched at the state level to, in effect, hijack the rights of e-book publishers and subject e-books to compulsory licensing for library use. As mentioned at the beginning of this blog post, draft legislation has come forward in New York, Maryland, Rhode Island, Massachusetts and elsewhere to require publishers to license e-books to libraries at “reasonable rates”, with rate-setting ultimately being determined by the courts if there is no agreement. New York’s legislation was vetoed by Governor Kathy Hochul on the grounds that it intruded into the domain of federal copyright law, but Maryland’s statute has been enacted. We will have to wait to see if the AAP’s legal challenge is upheld.
What has prompted this legislation now? Most publishers license digital editions to libraries at the same time that a work is released to the public, but there are exceptions. Amazon (not a member of the AAP, by the way) is one, but they are not the only publisher to express concern over the impact of widespread library e-lending on sales of e-books. Back in 2019, MacMillan’s CEO John Sargent expressed concern that “the very rapid increase in the reading of borrowed e-books decreases the perceived economic value of a book…causing book-buying customers to change habits“. According to Sargent, this was creating a problem across the publishing ecosystem. MacMillan’s proposed solution was to limit each library to one copy of an e-title for the first eight weeks of release before licensing additional copies to a library. This would not prevent borrowers from accessing the work, but most of them would likely have to wait in line for their turn, one of the prices to be paid for getting a newly-released work through a library. Of course, they had an alternative; they could go and directly “buy” their own digital copy right away. This strikes me as a not unreasonable compromise, but there was still a strong pushback from the library community. Then, in the early days of the COVID pandemic in March 2020, MacMillan suddenly reversed its policy. The plight of libraries that had to close their doors to the public and go online may have been a factor in MacMillan’s reconsideration.
This underlines the symbiotic relationship between authors, publishers, and libraries. For authors to be able to continue to create new works, they need a healthy publishing sector to get their works to the public, through booksellers and libraries. Libraries need a viable publishing sector to be able to provide their clients with new works. If publishers of e-books need to tweak or experiment with various market models in order to stay in business, that is their right and is subject to negotiation with their customers, including libraries. But what is happening in Maryland, and in other states where legislation is being developed to impose compulsory licences on publishers, is a concerted attempt to modify copyright law and strip rights-holders of their distribution rights through a back door mechanism. State legislation that impinges on US federal copyright legislation will undoubtedly be struck down by the courts. However, the protagonists are clearly hoping to build political momentum leading to eventual changes in copyright legislation at the federal level in the US Congress.
This is not just a US issue. International publishers are watching closely to see what happens, as there is potential for impact on titles published outside the United States. Moreover, the Berne Convention, to which the US has belonged since 1989, imposes certain minimum standards designed to protect rights-holders (the “Three Step Test”). Maryland’s legislation would nullify treaty commitments made by the United States Government.
The best solution, and hopefully one that will eventually be arrived at, is for publishers and libraries to work out their differences through licensing negotiations, instead of having libraries trying to tilt the playing field with legislation that abrogates elements of established copyright law. Throughout history copyright law has adapted to changing technology while managing to respect the rights of authors. The advent of the public library in the second half of the 19th century proved to a boon in the promotion of literacy, and the consumption of books. That is still the case, but all parts of the ecosystem need to survive. Licensing is a model that allows authors and publishers to survive in an increasingly digital world. Maintaining the role of libraries while ensuring that booksellers and publishers stay financially healthy is in everyone’s interest. Upsetting the apple cart to unfairly favour libraries over rights-holders is not. That is the current challenge presented by the Maryland legislation.
The complex relationship between authors, publishers, and libraries has worked well over the years, to the benefit of all. There is no reason why the advent of the e-book should undermine this working relationship so long as all parties approach the issue keeping the big picture in mind. All parts of the reading ecosystem need to survive. If authors, publishers and libraries work together, everyone will thrive. And the reading public will be the ultimate beneficiary.
Update: On February 17, the US District Court for Maryland granted a preliminary injunction suspending the Maryland’s e-book licensing law. The AAP statement on the court’s decision is here.
I recently attended a very interesting conference originating from Toronto, called Digital Media at the Crossroads, aka DM@X, where discussion and presentations took place on a range of digital media issues in Canada and internationally. Many of the audience were digital media students studying for degrees in Communications. Among the issues discussed was “site blocking”, a widely used technique in many countries to disable access by consumers to offshore websites distributing illegal or infringing content. The presenter, Kristina Milbourn, is a senior lawyer at one of Canada’s large communications companies. What struck me in particular was her analogy to site blocking as being part of the necessary “rules of the road” for navigating the internet. I thought it was an insightful and creative way to present the issue. (See image above).
We often refer to the internet as a “highway”. All highways have rules to which its users are subject, for the common good. We all need to stay on our side of the road, signal when we are making turns or changing directions, obey traffic signs and signals and so on. There will always be a small minority who choose to ignore the rules, to the detriment of the rest of us, and for these people there are sanctions. To ensure that the laws that we all need are enforced, penalties are issued subject to a process where the accused has the opportunity to rebut the charges. The internet is not much different. Site blocking, and its cousin, dynamic blocking injunctions, fit into this framework.
Site blocking is gaining traction in Canada, with the initial site blocking injunction issued by the Federal Court in the GoldTV case having being upheld on appeal. While site blocking has proven to be effective in deterring consumers from accessing copyright infringing content in countries where it is routinely used, such as Australia and the UK, it is less effective in situations where blocking needs to occur in real time. (More on this below). Pirate content sites typically establish themselves in jurisdictions beyond the reach of domestic law precisely to make it difficult for content owners to have them taken down. Sometimes they are ad supported; in other cases they will actually sell “subscriptions” to consumers, offering content that they have not licensed for a price that legitimate competitors could not match. A recent report by AVIA, the Asia Visual Industry Association, noted that illicit streaming websites and apps generate an estimated US$1.34 billion in annual revenues through advertising. Access is provided to consumers through offshore websites, often enabled with codes that are provided to “subscribers”.
The most effective way to stop this practice is to disable consumer access by requiring online service providers (who are, admittedly, innocent third-party actors) to block content at their servers. In many countries, including Canada, this happens through a court order; in some others the order is issued by a regulatory agency. In both cases, there is an identified problem, an application, a review of the facts, and a hearing where evidence is presented, and an opportunity provided for the target website to rebut the claimed infringement. In almost all cases, the respondent (resident offshore) does not contest the application. Most ISPs have found that the process is not particularly onerous and almost all cooperate. It is not irrelevant that some of them are vertically integrated companies and have their own content assets to protect.
The blocking orders are granted to ensure the smooth functioning of the internet highway. They clarify that access to illegal content will not be tolerated, and they impose the necessary blocks to ensure that the rules are respected. These rules of the road are required to protect the integrity of the ecosystem that creates content for consumers. They even help protect the consumer from self-inflicted harm because many pirate websites are also known to spread malicious advertising, spyware and ransomware as part of their “unadvertised” offerings. Using the traffic analogy, these “static” blocking orders are similar to unqualified traffic rules. Stop. Do Not Enter. No Access. They are static in the sense that they target a specific site with a specific blocking order.
The problem with static blocking orders is that they take some time to obtain and can be circumvented by the pirates by moving to a new internet address. It then becomes a game of cat and mouse. While site blocking orders deter most casual users, really determined consumers of infringing content will search for, or wait to be informed of, the new IP address to get their “pirate fix”. This is particularly prevalent in piracy of sports broadcasts, where pirate providers will switch the source of their feed within the game, once blocking begins. The most effective remedy is to follow the path of the pirates and block the new sources in real time. The technical means are available to do this, but the Achilles heel is the need for court approval. It is no small task to document the case for a site blocking order. It must be precise, and the target must be clearly identified. But what happens when the target shifts? Clearly, in a situation of piracy of live sports events there is no time to go back to the court to ask that the order be amended. The answer is to request a dynamic site blocking injunction.
Dynamic injunctions target the content rather than a specific Internet address, thus allowing the blocking order to shift to whatever address the pirated feed is coming from. It has been successfully used in the UK where piracy of English Premier League soccer broadcasts is all too prevalent. In Canada, 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. That application is still pending before the courts, with a ruling expected early this year. Coming back to our traffic analogy, whereas static site blocking orders require that data packets be blocked according to pre-determined, unqualified criteria, dynamic orders allow data packets to be blocked subject to conditional traffic rules, depending on the time of day and other factors. Instead of a “Stop” sign, it is more akin to a “No Parking between 7 am and 9 am” sign, or one that prevents a left turn between certain hours on certain days. Both have their utility, depending on the nature of the content to be targeted, just as both fixed and conditional traffic rules are necessary to allow us to use the roads safely.
Site blocking is not a new technique although it is relatively new to Canada. Its usefulness goes well beyond disabling access to copyright infringing content. If last year’s discussion is any guide, the new “Online Harms” legislation expected to be introduced shortly in Canada will include site blocking as one of the measures that can be employed to combat harmful and illegal online content, such as promotion of terrorism and sexual exploitation of minors. Some complain that any blocking of content online is a violation of net neutrality and plays into the hands of autocratic regimes by legitimizing blocking of content. Neither of these arguments is convincing, in my view.
Net neutrality is a principle in which online service providers, who perform a role similar to “common carriers”, should avoid discriminating against or favouring some content or communications over others, particularly with respect to content in which they have a commercial interest. It does not mean that they have an obligation to transmit illegal content any more than the telephone company is obligated to put through calls that a subscriber wants blocked. As for the argument “If we do it, this gives the Chinese licence to do it”, I would make two points. First, the Chinese don’t need any western examples to erect the “Great Firewall of China”. They are masters at it and have already done it. Second, any targeted blocking in western countries is governed by transparent rules overseen either by the courts or independent regulatory agencies, with all kinds of due process built into the system. The same is clearly not true in China or in other jurisdictions that unilaterally decide to block outside content. We need to deal with real problems present in our economies, and not worry unduly about the supposed precedential effect.
While site blocking is becoming a regularly used tool in many countries, surprisingly it is absent in the United States, largely as a result of the misinformed campaign back in 2012 to “Stop SOPA”. SOPA was a piece of draft US legislation (Stop Online Piracy Act) that opponents claimed would have allowed “Hollywood” to censor the internet. All sorts of dire predictions were circulated, including chilling user-generated content, overreach by law enforcement, the demise of e-commerce and technical infeasibility. It was even claimed that SOPA would “break the internet”! On January 18, 2012, a large number of websites, including Wikipedia and Google, went dark during “Blackout Day” to illustrate the purported threat. Legislation that had enjoyed widespread support from lawmakers suddenly became toxic. Members of Congress ran for cover. The legislation was dead and buried, never (so far) to return. The fact that site blocking has been implemented in over 35 countries around the world, and yet the internet is still working (the last time I checked), is proof of the wild-eyed hyperbole that was flung around by opponents of the legislation.
The absence in the US of the kind of rules of the road that have worked so well elsewhere has made it more difficult to combat piracy in the United States. According to a recent study by MUSO, reported in Dataprot, the US is the world’s biggest source of illegal online downloads, almost 28 billion, (followed by Brazil and India), many of them from offshore sites. Targetted, transparent, court-sanctioned site blocking would surely help tackle this widespread problem. A very recent study (January 26, 2022) by the Information Technology and Innovation Foundation (ITIF), a Washington DC based non-partisan think-tank, has argued that “A Decade After SOPA/PIPA, It’s Time to Revisit Website Blocking”. The ITIF study documents the success of site-blocking in combatting online piracy in numerous countries around the world, and concludes with a series of recommendations for US lawmakers.
Meanwhile, back in Canada, we’ll have to await the results of the court deliberations on the dynamic blocking orders for hockey games and should soon see what blocking mechanisms are included in the Online Harms legislation. New rules of the road.
Site blocking is helping to maintain good order on the roads and prevent the mass transport of illegal goods over the internet highway. Like the highway code, properly regulated site blocking is to everyone’s benefit (except the offshore pirates). But let’s not worry about that. After all, the rules were made to protect those who contribute to society, not those who rip it off.
China surprised many in the trade policy world last September by formally applying for membership in the 11 country “Comprehensive and Progressive Trans-Pacific Partnership” (CPTPP), the trade agreement that rose like a phoenix from the ashes of the 12 country Trans-Pacific Partnership (TPP). There is no guarantee that the current members will agree to negotiate accession with China, or that China is prepared to meet the high standards of the Agreement. But if China did join on the basis that it was prepared to make the necessary trade liberalization concessions, this would be a major boost for trade in the region and would bring greater discipline to the Chinese market. However, would it have much impact on copyright industries, particularly the US film industry that is becoming increasingly dependent on Chinese movie-goers to grow revenue? This blog posting examines that very question.
First, we need to go back to the TPP, the precursor to the present CPTPP agreement. The TPP process had been led by the United States, beginning in 2008, and was seen as the US’s way of establishing high quality open trade disciplines in the Asia Pacific region. Despite having pushed for the TPP initially and having driven the negotiations largely on its terms and having signed the Agreement in February 2016 (along with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam), the United States then walked away when Donald Trump “triumphantly” announced US withdrawal from the TPP on his first day in office.
Despite the immediate assumption that the deal was dead without US participation, under Japan’s leadership the remaining TPP partners continued to meet and finally reached a new agreement, based largely on the TPP text. Any references to the US, such as tariff commitments, were removed and some articles were suspended to remove items that were seen to primarily benefit the United States. These were mostly in the area of intellectual property and investment. However, the CPTPP clones well over 90 percent of the original agreement. It went into effect in December 2018 when six of the eleven CPTPP completed ratification and is now in effect for eight countries (Australia, Canada, Japan, Mexico, New Zealand, Peru, Singapore, and Vietnam). It has been so successful that so far three others have applied to join, the United Kingdom (even though it is not in the region), China and Taiwan. In the case of Taiwan it will be applying as a “customs territory”, the same basis on which it has membership in the World Trade Organization (WTO).
It is somewhat ironic, to say the least, that China has now applied to join a high standard trade agreement that was once championed by its arch trade rival, the United States, the more so since the US has turned its back on its own creation. There is plenty of speculation as to China’s motives, as I wrote about back in October last year. (China’s CPTPP Application: Serious Economic Move or Strategic Political Gambit?) China’s motives are probably a combination of the two.
There is no question that its move highlights the absence of the US from regional trade initiatives, and for Beijing brings with it the added bonus of complicating Taiwan’s application. It was an open secret that Taiwan was actively considering an application, but Beijing moved first. Taiwan swiftly submitted its own application just a few days after Beijing’s announcement, but now the existing members will have to more actively take into account the “China factor” in assessing how to deal with Taiwan. It may have been a coincidence, but Beijing’s announcement that it had submitted a letter of application to the CPTPP depository nation, New Zealand, came the day after the surprise announcement of the AUKUS (Australia-United Kingdom-United States) nuclear submarine deal. Reaction from most current CPTPP members has been cautious, with both Australia and Japan noting that any country applying must be prepared to meet the high standards of the CPTPP in terms of trade and investment liberalization and transparency. With regard to China, they haven’t said no, but they also haven’t said yes.
Despite some skepticism as to the depth of China’s commitment to trade reform, there are credible observers who note that China is facing a number of economic challenges, and a good dose of market reform would help. This is based on the supposition that there are economic reformers in Beijing who are not fully invested in the regime’s current preoccupation with self-sufficiency and state capitalism. How realistic this assessment is can be debated. There is no question that China would have to make some significant commitments in the areas of investment, labour rights, digital trade, services access and state owned enterprises (SOEs) if it is to meet CPTPP standards. But what about content and copyright industries? Would CPTPP commitments in this area pose an insurmountable obstacle for China? Surprisingly, no, and while its accession would potentially bring some improvement with respect to enforcement of copyright laws, it would not directly deal with the big-ticket market access issue, China’s film market.
Back in 2016 when the US was still touting the benefits of the TPP under the Obama Administration, it sought to enlist support from Hollywood by promoting the Agreement’s role in strengthening copyright protection and providing other benefits to the audio-visual industries. For example, when put into force, the TPP would set the term of copyright protection for TPP member states at life of the author plus seventy years (“life + 70”) as opposed to the “life + 50” term in place in a number of those countries. This would be of benefit to the US film industry. There was a notice and takedown provision similar to safe harbour provisions in the DMCA, an article requiring the outlawing of unauthorized camcording in theatres, and commitments to ensure that criminal or civil penalties would apply in cases of copyright infringement. Persons found to be circumventing technological protection measures (TPMs) and removing rights management information (RMI) on digital products would be subject to civil and criminal penalties.
The TPP would bring other benefits as well, such as prohibiting governments from requiring companies to turn over encryption keys, eliminating tariffs on DVDs and other film storage products, and removing local partnership requirements, i.e. the Agreement would prevent governments from requiring that a company or person, as a condition for importing movies or television shows, establish a contractual relationship with a local distributor. In addition, it would prohibit the imposition of customs duties on electronic transmissions (such as transmissions containing audio-visual content) and ensure the protection of encrypted program-carrying satellite and cable signals. Signatories would have to be members of the Berne Convention, the WIPO[i] Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT).
Those were among the key benefits identified at the time by the US Trade Representative’s Office that would benefit US copyright industries. There was a lot on offer. But then the US withdrew from the agreement, meaning that any concessions or commitments made by the other parties would not be extended to US companies or persons. That’s a pretty significant but not insurmountable problem. The benefits of the agreement could still potentially be accessed by some Hollywood entities through their corporate presence in CPTPP countries. Sony could invoke its Japanese ownership, for example, and content produced under the Village Roadshow banner could access benefits as an Australian entity. However, there is another development that limits many of the gains “advertised” by USTR back in 2016, even if US companies could access the benefits of the Agreement through a roundabout means.
When the remaining eleven countries came together to finalize the CPTPP, they adopted most of the already-negotiated text but suspended some key provisions. They could have eliminated them altogether, but they chose suspension in order to dangle a carrot to entice the US back into the Agreement. Many of the suspended provisions related to the “wins” identified earlier by USTR. For example, the articles relating to the extension of the term of copyright protection, notice and takedown/safe harbours, protection of satellite and cable signals, and prohibitions on circumvention of TPMs and removal of RMI were all suspended. This means that if China (or any other country) were to accede to the CPTPP at the present time, it would not be required to abide by any of these provisions. This will make it easier for China to meet the copyright requirements of the CPTPP.
There are other provisions in the CPTPP’s intellectual property chapter, as well as in its investment and e-commerce chapters that were not suspended and would apply to China. However, these provisions should not present a major difficulty for China since it has already agreed to most of the commitments elsewhere, either by joining the Berne Convention, which it did in 1992, or by acceding to the WCT and WPPT, which it did over a decade ago. More particularly, another regional trade agreement, the Regional Comprehensive Economic Partnership (RCEP) Agreement, which entered into force on January 1, 2022, contains many commitments that are very similar to those in the CPTPP. China, along with all ten ASEAN countries, Japan, South Korea, Australia and New Zealand, is an RCEP signatory state.
As I wrote last year, the RCEP has a fairly robust intellectual property chapter. It includes some provisions not currently in the CPTPP, such a prohibiting the circumvention of TPMs, the removal of rights management information from digital files and a commitment to protect encrypted program carrying satellite and cable signals. It contains similar language to the CPTPP with regard to expeditious remedies to prevent copyright infringement and includes a range of specified civil and criminal measures. Since China has already agreed to all these commitments, it would presumably have no difficulty in signing on to similar commitments in the CPTPP. (Whether it is effectively meeting its commitments is another matter, but non compliance is subject to dispute settlement procedures under both the RCEP and CPTPP.)
If all of the above seems to suggest that the copyright provisions of the CPTPP would not present much of an obstacle for China in terms of accession, that is indeed my conclusion. Nor would China’s accession change much in this sphere for the copyright industries, given that China has already undertaken to comply elsewhere with many of the measures designed to protect copyrighted content. The real issue facing Hollywood and other film producing countries is China’s restrictive regime regarding import and distribution of films. China has always maintained a tight control over its theatrical market by limiting the ability of foreign producers to distribute directly to Chinese audiences.
Back in the “early days” (i.e. 1980s through mid 2000s) this tight distribution was not too much of a problem as the Chinese audience and Chinese venues were relatively limited. Then the explosion of demand occurred and the Chinese theatrical market is now one of the world’s largest and certainly its fastest growing. Hollywood relies heavily on Chinese distribution to generate international revenues and to be able to do so is required to work through China Film (a state owned entity) which retains a virtual monopoly on distribution. Through controlling distribution channels, the Chinese authorities can maintain a tight grip on what content is made available to Chinese audiences (ensuring the “right” political and social messages reach audiences), while also ensuring that Chinese films take a substantial share of box office earnings. As reported by Axios, China blocked all four of the Marvel movies from being released in its theaters last year, a “grim sign” for U.S. film makers.
China not only wants to exercise a tight rein over content, it also wants to propel the Chinese film industry to compete with the US majors. In this regard, it is using its huge domestic market as leverage, just as it has done in other areas, such as automobile manufacturing. Foreign technology and content is welcomed for a while, until such time as Chinese firms can compete, and then the screws begin to tighten. That is what I see happening in China right now. There will always be a market for a few key foreign blockbusters, but they will be distributed on Chinese terms and in accordance with Chinese priorities in the Chinese market, and this will be done in such a way as not to jeopardize the growth of China’s own film industry.
Would China’s entry into the CPTPP change this? It almost certainly would not. While China will have to negotiate its accession, it is clearly going to seek exemptions for certain sectors and industries. One of these sectors will certainly be distribution of AV content. The CPTPP calls for “national treatment” for investment (for example, foreign film distributors and theatre operators should, in principle, be treated on an equal basis with their Chinese equivalents). However, each and every one of the CPTPP member states has made certain exceptions to this rule when it comes to investment, and all of them, without exception, have included reservations with regard to “cultural industries” and content distribution in one form or another. The United States was no exception when it signed the original TPP, identifying a reservation to national treatment for cable television distribution. So, while China will need to get the other CPTPP members to agree to its list of exceptions, it will be difficult for them to argue that China should open its film market when they have all, without exception, claimed the right to discriminate against foreign nationals in various ways when it comes to content distribution.
Will China be able to negotiate accession with the current members? That is the $64 billion dollar question (to update an old expression). First, the UK accession negotiations will have to be completed, giving us an insight into the kind of commitments a new member can be expected to make. China’s accession will be more complicated, not only over questions as to whether it is truly prepared to abide by the standards of the CPTPP, but also by associated political factors, such as its ongoing trade “war” with the United States, even though the US is not a CPTPP member. In theory, the US should be in favour of any process that will induce China to open its market and level the playing field with its trade partners. However, the reality is that at the current time Washington seems disinclined to take any steps that could be construed as doing China any favours, and the US may try to pressure its USMCA partners, Canada and Mexico, to take a hard line on Chinese accession.
Even if China does eventually manage to accede to the CPTPP, the copyright industries, especially the copyright industries in the US, won’t see much direct benefit, although a more open Chinese economy generally would reduce US-China tensions and could potentially help reverse the threatened decoupling between China and western economies. Maybe one day the US would even be prepared to reconsider its position and join the CPTPP instead of continuing to impose managed trade outcomes on China through unilateral application of punitive tariffs. A US-China trade rapprochement along with the adoption of greater trade opening and transparency measures by China would be good for everybody in the long run, copyright industries included.
On or around January 1 each year we get a recrudescence of the same old story, a “celebration” of all the works that have just entered the public domain in the United States. It is the story that just keeps on giving for journalists facing a quiet day and searching for filler, the most recent example being Michael Hiltzik’s January 3 column in the LA Times. The “hook” this year is the fact that A.A. Milne’s first Winnie-the-Pooh book, published in 1926, is now in the public domain in the US. In Canada, the CBC jumped on this story, notwithstanding the fact that the work has been in the public domain in Canada since 2007. Although Pooh entering the public domain in 2022 is not directly relevant to Canadians, a story is a story so the CBC interviewed Hiltzik, and embellished its report with quotes from a prominent Canadian academic copyright skeptic. (There are other Canadian experts who could have provided an alternate view but that would not have fitted with the CBC’s one-sided editorial slant of “flaws in US copyright law” and “copyright creep”, speculating on how this might apply to Canada).
The explanation of why a large number of works enters the public domain in the United States on the first of January each year is complicated and has to do with the permutations of U.S. copyright law, and extensions to the period of copyright protection passed into legislation over the years. In the most recent extension, in 1998, where the U.S. sought to bring its period of protection into line with that of the EU (which is “life of the author plus 70 years”), copyright protection was aligned with the EU standard for works published after 1978 and set at 95 years from the date of publication for many earlier works, with January 1 of the 95th year being the trigger date. That means that works published in the US during 1926 fall into the US public domain this year.
In Canada, and in other countries (including the US with regard to more recent works), a work enters the public domain on the first of January of the year following a set period of time after the demise of the author. In Canada, that set period is 50 years, which explains why the Milne work entered the public domain in Canada on January 1, 2007, Milne having died in 1956. That set period is about to change to bring the duration of copyright protection in Canada into line with that of most developed countries, including the US and EU, that is to say, life of the author plus 70 years. This was one of the copyright issues dealt with in the USMCA/CUSMA trade agreement. Judging by the thrust of its report, however, the CBC doesn’t seem to think this is a good idea.
For groups like the Center for the Study of the Public Domain at Duke University, the proclamation of “public domain day” on January 1 of each year is an attention getter. The public domain has been part of the structure of copyright law ever since the first copyright laws were introduced, although there are those who believe that since copyright is a property right it should not lapse, just as other property rights do not expire. From the perspective of a rights-holder, the impending lapse of copyright in a property could be compared to the clock running out on a property lease on which your house has been built. The closer to the expiration date, the less value there is in the property. However, historically copyright has always been a limited property right. The original copyright law, the 1710 Statute of Anne, provided for 14 years protection with a possible extension of an additional 14 years if the author was still living. This was mirrored by the 1790 US Copyright Act. Since then, the duration of protection has been extended for several good reasons, such as providing additional incentives to authors to create (an extended term of protection makes a work more valuable when the rights are licensed or assigned), to providing the incentive for corporate rights-holders to invest in updating and further developing a property.
Those who go to inordinate lengths to “celebrate” a work going into the public domain help feed the false narrative that a work under copyright is one that is “locked up” and unavailable to the public. The Center notes that works falling into the public domain are “free for all to copy, share, and build upon”. That’s true, but a work under copyright is also available for all these purposes through licensing, and/or fair dealing/fair use exceptions. The original Milne Winnie-the-Pooh book has been in the public domain in Canada now for 15 years and I am still waiting to see the explosion of “re-imagined” new works built on it based on the fact that it is no longer under copyright protection. I am not holding my breath for the sudden emergence of new Pooh-based works in the US either. And when authors create new works based on public domain material—guess what? These new works fall under copyright because authors rightly want to protect what they have created. The reality is that one of the main beneficiaries of works falling into the public domain are publishers who can then republish popular works without having to secure the rights. In theory, these works should be cheaper for the public but often they are just as expensive as similar works under copyright, the publisher having fattened its margins rather than pass on the savings to consumers.
We all know that one of the big reasons for so much interest in Pooh is because of the successful Disney animated films. Disney purchased the rights to Milne’s works and characters in 1961 from the Slesinger family who had obtained the rights from Milne in 1930. In 2001 it was reported that Disney bought out remaining royalty rights for £240 million of which £150 million went to the Royal Literary Fund. Since acquiring the rights, Disney has given a whole new life and personality to the Milne characters. (TTFN says Tigger). So, what does the fact that Milne’s 1926 book has entered the public domain (in the US) mean for the Walt Disney Company? Not much. First, only Milne’s first Pooh book is now in the US public domain, not his later 1928 work where Tigger appeared for the first time. But more important, Disney has copyright in the films that it has made, and the anthropomorphic characters that it created, and these rights will last for several more decades. In addition, it has protected some of its IP through trademark registrations as well. And what is wrong with that?
The Winnie the Pooh that most of us know today is the creation of Disney talent, inspired of course by Milne’s book. In the case of Milne’s characters, which were still under copyright, Disney purchased the rights, as it has done for some of its other films like Alice in Wonderland. In the case of many other Disney works, they were based on works or stories already in the public domain, such as Grimms Fairy Tales, published in 1812 (Sleeping Beauty, Cinderella), Hans Christian Anderson (The Little Mermaid) and others including Robin Hood and Pinocchio. While the Disney films and characters are based on the original books, no-one can deny that the Disney studio has imbued these stories and characters with new life and meaning, creating something quite different in the process. (Often the dark endings have been replaced by something more palatable to modern tastes, plus the characters themselves—like the Seven Dwarfs–have been given unforgettable personalities).
The investment in the creation of these works has been enormous, but for the most part so have the commercial benefits. In the process, Disney has brought delight and entertainment to generations of children and their parents. Without the return on investment from its earlier films, Disney would not have continued to be so creative and productive with its most recent generation of animated film releases. Yet somehow, in the eyes of public domain advocates, Disney is at fault for protecting its considerable investments in animated story-telling. Mickey Mouse is a favourite target. But let us not forget that copyright protection has enabled the business model that has led to a wealth of children’s entertainment enjoyed world-wide. Disney will rightly continue to protect its interpretation of Pooh and his friends for many years to come, and we will all benefit.
I could not end this blog without going back to Pooh to highlight his Canadian connection. Most readers in the UK and US will not be aware of this story, and it may be new to many in Canada as well, although it got coverage from the CBC on Winnie’s 100th anniversary a few years ago. Winnie was an orphaned bear cub from White River, Ontario who was purchased for $20 by Lt. Harry Colebourn of the Canadian Army Veterinary Corps as his troop train passed though the town on August 24, 1914, on the way to Quebec to embark for Britain with the Canadian Expeditionary Force. Colebourn named the bear Winnipeg (shortened to “Winnie”), in honour of the city where he had been living. Winnie went with the troops overseas and once in Britain, became the mascot of a Winnipeg cavalry regiment, the Fort Garry Horse. When the time came for the unit to be shipped to the fighting in France, Harry decided to donate Winnie to the London Zoo for the duration of the war. Whenever he was back on leave, he would pay the bear a visit. He had originally planned to take Winnie back to Canada after the war, to the Assiniboine Zoo in Winnipeg, but the very tame Winnie had become such a huge crowd pleaser and favourite of children in London that Colebourn made the donation permanent. Winnie’s sojourn at the London Zoo lasted until her death in 1934. (Yes, the real Winnie was a female bear). The full story is recounted in more detail here.
One of the children who regularly visited Winnie at the zoo was Milne’s son, Christopher Robin Milne, who like many children at the time probably played with the bear. Christopher Robin had a teddy bear, named Edward, but apparently soon dubbed it Winnie. When Milne began writing the story of the animals in the Hundred Acre Wood, the chief bear protagonist became Winnie the Pooh. And the rest, as they say, is history.
The town of White River has jumped on the Winnie bandwagon and each year holds a Winnie the Pooh festival. There is also a statue, and a park named after the famous bear. The City of Winnipeg also has a statue of Colebourn and Winnie in Assiniboine Park. A few years ago, Canada Post issued a series of four Winnie the Pooh stamps (see blog image above) in conjunction with the Walt Disney company. There was some controversy about this, but not over copyright issues. Canada Post and Disney collaborated fully on the production of the stamps, but some curmudgeonly Canadian nationalists grumbled about images of the Magic Kingdom appearing on a Canadian postage stamp!
Even though Canada can claim some tenuous connection to the famous bear, Pooh truly belongs to the world. The two Milne books on Pooh have been translated into many languages, even Latin. Winnie Ille Pu is the only book in Latin ever to make the New York Times bestseller list. The Latin translation was copyrighted in 1960 by the translator, Alexander Lenard, so the Center for the Study of the Public Domain will not be “celebrating” the release of this edition from the “bondage” of copyright for a while yet. It is interesting to note that the right to translate, or to authorize translations, is one of the bundle of rights conferred on the author or rights-holder by copyright law. Although the work is only now entering the public domain (in the US), that fact that it has been under copyright has not impeded the spread of the word of the “bear with little brain” in many languages around the world. As Pooh would say, “People say nothing is impossible, but I do nothing every day.”
Nowadays it is not uncommon for major telecommunications companies (telcos) to provide infrastructure in the form of wireless, wireline and fibre optic, cable and satellite connectivity while also directly controlling some of the content distributed via this infrastructure. Think AT&T/Warner Media, NBC Comcast, Sky (owned by Comcast) and, in Canada, Bell Canada and Rogers Communications. In addition, even telcos that are not vertically integrated play a gatekeeper role for content providers (except for content providers that reach audiences through streaming) through their control of distribution platforms. Therefore when telcos merge, there can be significant implications for content providers.
This is the situation in Canada with the proposed acquisition by Rogers of Shaw Communications, a merger estimated at CAD$26 billion. For those not familiar with the Canadian telecommunication and broadcasting landscape, Rogers is a major provider of cable and internet services, primarily in Ontario and Atlantic Canada, and operates one of the four national wireless (mobile phone) networks. Rogers also owns a number of TV stations such as CITYtv in Toronto, the multicultural OMNI channel and sports channels. Shaw is a leading cable and satellite provider in addition to operating a wireless mobile phone division, based in Western Canada. If the merger is approved, Rogers would acquire Shaw’s cable networks in Western Canada, and its national mobile phone division known as Freedom Mobile plus a number of community broadcast channels. Shaw also used to own major content assets, such as the Global TV network, (one of two major private national TV networks in Canada) but spun them off to Corus Entertainment in 2016 although the Shaw family maintains a controlling interest in Corus (but as a separate entity).
Despite Shaw no longer controlling media assets, opponents of the merger–among whom are (to no-one’s surprise) Rogers’ main telco competitors Bell Canada, (itself a vertically integrated company that controls Canada’s other major private TV network, CTV, along with a number of specialty general interest and sports channels and a Pay Per View service called CraveTV), and Telus Corp—are claiming that if allowed to proceed, the combined Rogers/Shaw company would dominate the Canadian television distribution landscape, controlling 47 percent of English-language broadcast subscribers in Canada. According to testimony provided by opponents of the merger, the transaction will give Rogers a dominant position in negotiations for carriage with independent channels, leading to reduced revenues for Canadian content producers.
The real issue is really not about broadcasting, however. It is all about wireless. The Government of Canada has long pushed to have 4 major competing national wireless networks as a means of promoting more competition in the market. Critics are constantly pointing out that Canadian consumers pay some of the highest cell phone rates in the world, and the government wants to change this. What Canadian consumers enjoy right now could be characterized as access to 3 ½ networks; Bell, Telus, Rogers and Shaw’s Freedom Mobile as a weak fourth. Shaw bought the fourth carrier, then known as Wind Mobile, in 2016 after its previous owners found they did not have the deep pockets needed to compete with the “Big Three”. The government had done policy backflips in order to allow Wind to come into existence, making exceptions to the policy that mobile carriers had to be majority Canadian owned, with foreign ownership limited to 33 percent. When Shaw finally stepped in to takeover Wind (selling its media assets to finance the purchase), policy makers breathed a sigh of relief. However, even Shaw could not get the fourth network up to scale and with the need for further major investment to build out 5G technology, the folding of Freedom Mobile into one of its three big rivals began to look inevitable. Rogers got there first.
The combination of Shaw’s market predominance in the west with Rogers strong base in Ontario makes a lot of market sense, unless you happen to be a competitor or perhaps a consumer. Cell phone plans will not go down in price, but at least a combined Rogers/Shaw operation can compete with Bell and Telus in terms of rolling out 5G. The real issue with the merger is going to be whether it will advance or impede competition in the wireless market. That call will be made by the Competition Bureau, which has already called for submissions. (It is not the practice of the Bureau to hold public hearings.) However, unlike the Competition Bureau, the Canadian Radio-television and Telecommunications Commission (CRTC)—the regulator–has recently completed public hearings to review the merger from the perspective of its implications for broadcasting.
While the CRTC is responsible for both broadcasting and telecommunications regulation, it has determined that it has no need to review the telecommunications aspects of the proposed deal. According to the CRTC;
“…the transaction also involves Shaw’s wireline telecommunications services (including home telephone and Internet), wireless telecommunications services (including wireless telephony operating under the brands Freedom Mobile and Shaw Mobile), and business automation and security. The present application does not include these services since the change in ownership of these elements does not require prior approval from the Commission. However, these elements will be subject to review by the Competition Bureau and Innovation, Science and Economic Development Canada.”
While Telus and Bell will certainly oppose the merger in their submissions to the Competition Bureau based on their opposition to consolidation of wireless and wireline phone and internet services, since the CRTC’s review was focused only on broadcasting, that is where they aimed their guns in the public hearings. While the merger entails the acquisition by Rogers of very few direct broadcast content assets (just a few Shaw community channels), the real impact will come when/if it takes over Shaw’s cable and satellite distribution. This will result in one less platform available to content providers (although perhaps the combined platform will have as many or more subscribers), a concern for smaller, independent channels.
Prime space on platforms is limited. Ideally, from the perspective of a small independent channel, the CRTC would give it “must carry” status, meaning in effect it will get a few cents from the platform for every sub whether or not it has much of an audience. Providing diversity of content is the main argument for such a practice. If not a “must carry” then an independent channel must negotiate for carriage with the platform and a Rogers/Shaw merger not only gives the new combined platform considerable market share and consequently power, but also means one less platform for the content providers to negotiate with. It is not surprising, therefore, that several CRTC interventions were made on behalf of independent content providers seeking guarantees of carriage. In particular ethnic media channels, such as TLN Media Group and the Ethnic Channels Group expressed concern that their content could be shut out from an enlarged Rogers platform.
Concern was also expressed by another Rogers competitor, Telus Corporation, about the impact of the merger on Global News, one of Canada’s three private news networks (Rogers’ CITYtv and Bell’s CTV being the others). Global, formerly owned by Shaw but now owned by Corus Entertainment (which as noted above is still controlled by the Shaw family but as a separate entity) currently receives $13 million annually, or about 10 percent of its budget, from Shaw. Shaw is required by the CRTC to contribute to Canadian programming (even though it does not directly own any commercial channels) and is permitted to direct part of its mandated contribution to local news production, which it does through its contribution to Global News. Rogers is proposing to instead redirect these funds to its own network, CITYtv, which has a very limited presence in western Canada. So why would Telus, a major telco but one which owns no media assets and has no connection with Global News, suddenly be so concerned about a network ultimately controlled by the Shaw family, one of its biggest rivals? The answer is that anything that Telus or Bell can do to put a spanner into the works of a Rogers/Shaw merger is worth raising as an issue.
In response to the various criticisms, Rogers agreed to increase the number of independent channels it will carry from 40 to 45, but rejected demands for revenue guarantees. As for being required to continue to fund Global, a Rogers spokesperson said it was hard to “get our head around” the idea of funding a rival network to its own CITYtv. Eventually, sometime in the new year, the CRTC will issue its report. It will likely consider imposing some requirements on Rogers to continue to ensure the vitality of Canadian specialty channels, but these will just be road-bumps for Rogers. The CRTC could in theory recommend that the merger not be permitted to proceed because of the extent of control it will give Rogers over English language broadcasting content distribution in Canada, but this would truly be a case of the content dog wagging the wireless dog.
The real review will be the one conducted by the Competition Bureau. The Bureau’s examination scope is wide, covering mobile wireless services, internet service, fibre transport service, supply of television programming and broadcasting distribution services. However, it is expected to focus primarily on wireless and internet issues. The Bureau could possibly require that Rogers divest Shaw’s Freedom Mobile and not absorb it into Rogers own mobile platform. That seems unlikely as it raises the question of who would buy it. A forced spinoff could cause the entire deal to fall apart and besides, there aren’t many potential suitors for the struggling fourth mobile network. Despite years of government effort, Canada’s wireless market will likely continue to be dominated by the Big Three of Bell, Telus and Rogers, and Canadians will probably continue to complain about the cost of wireless plans. One potential solution is for the CRTC to force the Big Three to open their networks to smaller operators who “ride on top” of their networks. These independents are known as MVNO’s (Mobile Virtual Network Operators). Not surprisingly the big telcos are very resistant to giving these competitors an opening.
In the final analysis, wireless concentration is the major issue that will be addressed in this merger. Despite the not insignificant implications for broadcasting, the CRTC’s review late last year was, frankly, a side show to the main Competition Bureau event.
Update: On March 3, 2022, Industry Minister Champagne announced that he would not approve the wholesale transfer of Shaw’s wireless licences to Rogers as part of the merger. The Ministry that Champagne directs is responsible for spectrum allocation. The proposed merger is still being reviewed by the Competition Bureau and the CRTC. Champagne’s announcement means that at least some of Shaw’s Freedom Mobile will have to be spun off if the merger is to be approved.
As I noted in my year-end wrap up a couple of weeks ago, some of the copyright and content related issues that were under discussion in Canada in 2021 will likely move forward in a more aggressive way this year. The federal election last fall put on hold a number of copyright-related issues that were in process. Parliament lost several months of work, plus all pending legislation died at the time of the election call and needs to be re-introduced into the new (44th) Parliament. So far, the current Parliament has met for just a few weeks, sitting from November 22 to December 17, 2021, primarily to outline new legislative priorities. Mandate letters for ministers were released on December 16, and among the issues tasked to Pablo Rodriguez, the Minister for Canadian Heritage, are four big files concerning content industries. Rodriguez is instructed to;
“Swiftly introduce legislation to require digital platforms that generate revenues from the publication of news content to share a portion of their revenues with Canadian news outlets to level the playing field between global platforms and Canadian outlets. This legislation should be modelled on the Australian approach and introduced in early 2022.”
“Continue efforts with the Minister of Justice and Attorney General of Canada to develop and introduce legislation as soon as possible to combat serious forms of harmful online content to protect Canadians and hold social media platforms and other online services accountable for the content they host. This legislation should be reflective of the feedback received during the recent consultations.”
That is a lot to have on one’s plate and one cannot help but wonder how much of this will actually get done. These issues have all been around for some time, and most have already been the subject of online consultation and in some cases, Parliamentary review through committee. Let’s look at each in turn.
The copyright term extension question is the most pressing, as Canada is required to implement the twenty-year extension agreed to in the USMCA trade agreement no later than December 31, 2022. The consultation paper addressed a number of implementation issues, such as orphan and out of commerce works, while also seeming to dismiss proposals for the institution of an additional registration requirement in order to access the longer period of protection as advocated by some opponents of extending copyright duration in Canada. The implementation of Canada’s USMCA/CUSMA obligation, hopefully done in a straightforward way without the imposition of additional registration barriers, could be rolled into a broader copyright reform bill, or could be bundled into some other omnibus legislation.
The second consultation paper dealt with issues such as safe harbours for internet intermediaries and possible regulations regarding site-blocking of pirate websites, a measure already upheld on appeal by the courts in Canada. The AI paper raises questions such as ownership of works created by AI and the addition of possible additional copyright exceptions to address data mining, among other topics.
Another copyright issue that needs to be addressed, in addition to the introduction of an Artists Resale Right mentioned in the mandate letter, is the question of mandatory tariffs to fix the disastrous decision by the Supreme Court in July 2021 upholding the Federal Court of Appeal’s (FCA) ruling that mandatory tariffs covering unlicensed use of copyrighted content are not reciprocally binding on rights-holders and users alike. The FCA found that for users they are only optional, thus undermining one of the pillars of Canada’s collective licensing regime. Parliament needs to fix this. The wording in the mandate letter instructing the minister to amend the Copyright Act “to further protect artists, creators and copyright holders” offers some hope. The pendulum has swung so far in favour of unlicensed uses that some rebalancing is badly needed.
Broadcasting Act “Reforms”
The next item on Mr. Rodriguez’s “to do” list is reintroduction of “reforms” to the Broadcasting Act, known as Bill C-10 in the last Parliament. This is a hot potato for a couple of reasons. In the last Parliamentary session, the legislation passed in the House but failed to get through the Senate before the election was called. In the parlance of the mandate letter, it targets “foreign web giants” to ensure that they “contribute” to the production of “Canadian stories and music”. Put more bluntly, it is designed to extract funding from foreign players like Netflix, Amazon Prime, Disney Plus, Spotify and other online streaming platforms to support Canadian production. Not production in Canada, of which there is plenty, some of it supported by these same platforms, but “Canadian production”.
The question of what qualifies as “Canadian production” is, to say the least, arcane. Currently, a production using a Canadian story with a Canadian director and Canadian actors does not qualify as Canadian content if the financing is not Canadian controlled (i.e. it is not produced by a Canadian-owned production company) and, under the draft legislation, if the copyright of the production is not held by a Canadian. What is the goal? Is it to tell more Canadian stories in Canadian settings to Canadian and global audiences or is it to ensure that more money is put into the hands of “qualified” (i.e. Canadian) producers by extracting from streaming services a “tax” similar to that which is imposed on conventional broadcasters? Those broadcasters must, as a condition of licence, spend at least 30 percent of their aggregate revenue in the previous year on Canadian content programming. While full foreign funding automatically disqualifies a production from meeting Canadian content requirements, there seem to be no qualms about requiring foreign producers to pay into a fund that would then be used to finance Canadian production. In effect the foreign funds are laundered through a Canadian production house. Finding the right balance to promote the creation of Canadian content (and sensibly defining what that is) while incentivizing the telling and distribution of Canadian stories by international production houses is a major challenge.
The other controversial aspect of the previous Bill C-10 was its application to platforms like YouTube, Twitter, Facebook and Instagram through inclusion of user-generated content (UGC) in “discoverability” requirements imposed on the platforms. To have omitted UGC would have created a massive loophole. YouTube, for example, is one of the primary music and video distribution platforms in the country. There is no reason to grant UGC an exemption from the application of law and regulation, as long as individual expression is subject to the normal protections afforded by the courts and the Charter. Critics accused the government of empowering the regulator, the CRTC, to censor content posted to social media by individual Canadians. This was a canard and a misunderstanding of the intent of the legislation since the obligations would have applied only to the platforms and would have had no impact on individual freedom of expression. We will have to wait to see whether and in what form the UGC issue is addressed in the 2022 version of the legislation.
Payment for Unlicensed Use of News Content by Internet Platforms
Rodriguez’s instruction on this issue could not be clearer. “Swiftly introduce legislation” to require payment by digital platforms to Canadian news providers when the platforms generate revenue from that content, “modelled on the Australian approach”. This is clearly an idea whose time has come. One option the government had been considering was following the EU model of granting news publishers an ancillary copyright in their content, but it has now opted for the successful Australian model of using competition law to deal with the issue of free-riding by the platforms. With the Australians having taken on Google and Facebook and brought them to heel, the task should be considerably easier for the Canadian government. (The US government is also studying the issue.) Just the threat of legislation has inspired Google to reach content deals with many Canadian news providers. This legislation will provide the needed legal backstop.
Online Harms Legislation
This will be a big issue in 2022. There is no question that social media platforms and online services (Facebook, Instagram, Twitter, YouTube, TikTok, and Pornhub are specifically identified) need to be held to greater account for the socially harmful content posted by users that they knowingly host (and from which they often profit). The trick is to define “harms” in such a way that is clear and legally sustainable. This is easier to do for some harms than for others. In this regard, the offline world can provide precedents. A consultation paper was released in the fall of 2021 outlining the five categories of harms that would be regulated; terrorist content; content that incites violence; hate speech; non-consensual sharing of intimate images; and child sexual exploitation content.
The consultation paper proposes that a Digital Safety Commission be established to regulate platforms, with strong enforcement powers. Platforms would be required to establish reasonable monitoring mechanisms, assess flagged content, and remove harmful content within 24 hours, subject to appeal. They would also be required to establish a flagging and appeal process. Legislation would require greater transparency from platforms and impose an obligation to notify law enforcement in the case of “imminent serious harm” or potential criminal conduct. The paper elicited a number of comments, some negative, many of them from “internet freedom” advocates traditionally opposed to any meaningful regulation of the internet. Objections range from the requirement for a takedown within 24 hours to the obligation to share information with law enforcement to opposition to site-blocking powers. While one must be careful to target only behaviour and content that is truly harmful and illegal, it is also time to increase the pressure on platforms to exercise greater responsibility.
A recent, egregious example of the kind of harmful material found on the internet was this report in the New York Times about a “how to” suicide website. Site-blocking for online harms would be one effective way to deal with such outrageous content, given that the search engines refuse to delist the website. Those who oppose Canada extending its regulatory reach to international internet platforms, like University of Ottawa law professor Michael Geist, cite Article 19.17 of the USMCA/CUSMA as an obstacle. Geist claims that Canada agreed to provisions in the USMCA/CUSMA that “look very similar” to Section 230 of the 1996 US Consumer Decency Act and makes the dubious claim that if Canada enacts online harms legislation that creates new liability for the platforms, the US might take retaliatory trade action. Section 230 is the much-criticized US legislation that absolves internet platforms of any civil liability for user content on their platforms. It has been much abused over the years by the platforms who have used it as a shield to avoid taking action to moderate or remove harmful content.
Dr. Geist’s conclusion is inaccurate for several reasons. First, Article 19.17 may contain some phrases that are similar to parts of Section 230, but it is quite different in terms of its effect. As I wrote in an earlier blog posting (here), it imposes no obligations on Canada to enact any laws that would entrench Section 230 immunities in Canadian law because Canada protected its ability to implement 19.17 through its “laws, regulations, or application of existing legal doctrines as applied through judicial decisions”. Second, Article 19.17 is subject to a “public morals and public order” exception (embedded in Annex 19-A), an exception that the US has itself used in the past (Antigua online gambling case). If tackling online harms such as terrorism, child sexual exploitation, incitement to violence etc. doesn’t fall within the ambit of protecting public morals or maintaining public order, then I don’t know what does. Third, Section 230 and indeed Article 19.17 deal only with civil liability. Article 19.17 has an additional provision, subsection 4 (c) which states that;
“Nothing in this Article shall…be construed to prevent..(i) a Party from enforcing any criminal law; or (ii) a supplier or user of an interactive computer service from complying with a specific, lawful order of a law enforcement authority”
The online harms legislation in Canada will involve the Criminal Code. Raising USMCA Section 19.17 as a potential obstacle to introducing online harms legislation in order to hold the platforms more accountable for harmful content they allow to be distributed to users is just one more red herring dangled by opponents of the legislation.
The online harms bill is to be introduced “as soon as possible” while reflecting feedback received during the recent consultation. That suggests that it may not have as high a priority as some of the other items on Minister Rodriguez’s task list. We shall see.
Other developments
In addition to the four “to do” items included in the Heritage Minister’s mandate letter, there are some other issues in the content field on the 2022 agenda, the primary one being the proposed acquisition of Shaw Communications by Rogers, a subject I plan to write about in a subsequent blog posting. This merger has both significant content and telecommunications impacts.
It promises to be a busy year as Justin Trudeau’s minority government tries to steer several key pieces of legislation through a Parliament where it will require the support of at least one major opposition party to get anything done. The stakes are high, particularly for rights-holders and copyright industries, and there are hopes–and expectations—that the new 44th Parliament will achieve more than the unfinished business of the last one.
