Hugh Stephens Blog

Roughly a month after the CRTC charged out the gate by launching public consultations on the regulations it will issue to implement Bill C-11, the Online Streaming Act, (Implementing Canada’s Online Streaming Act: The CRTC is Fast Out of the Gate), the government has finally issued the promised Policy Directive that is to guide these consultations. The Bill itself was finally passed in late April. (Canada’s Online Streaming Act (Bill C-11) is Now Law: What Happens Next?)

It was unusual for the broadcasting and telecoms regulator, the Canadian Radio-television and Telecommunications Commission (CRTC) to have begun the public consultation process before receiving the government’s Policy Directive, but time is of the essence given the long delays in getting C-11 through Parliament. The current government has approximately 24 months to get the legislation implemented before the next general election, assuming it can maintain its hold on power in the current Parliament given its minority status. Timing will be tight given the need for public consultations and hearings. One cannot help but wonder why the Policy Directive could not have been issued earlier, at the same time the Commission launched its public consultations, but clearly some finetuning was required. The Directive gives “binding, high-level instructions” to the CRTC, supposedly an arms-length regulator. But to be fair, the Directive tells the Commission what to do, but not exactly how to do it.

Objectives of the Legislation

A ”Highlights” document issued by the Department of Canadian Heritage outlines a number of policy objectives for the legislation that cover the waterfront of the government’s social policies;

• Ensure meaningful participation of Indigenous persons in order to address the underrepresentation of Indigenous stories and Indigenous-owned broadcasting undertakings in Canada;
• Exclude social media creation to ensure that individual users’ and social media creators’ content cannot be regulated;
• Support diversity and inclusion (black and racialized communities, official language minority groups; e.g. francophone communities outside Quebec);
• Support Canadian creators and media by maximizing use of Canadian creators and strongly supporting the creation and discovery of diverse Canadian programming;
• Implement discoverability and showcasing for Canadian programs, focusing on outcomes;
• Redefine Canadian programs, i.e. what will count as Canadian Content (Cancon), by recognizing the crucial relevance of Canadian creative personnel having a high degree of creative control or visibility, and;
• Create an equitable, flexible and adaptable regulatory framework by ensuring clear rules for broadcasters, including online broadcasters.

This list encapsulates the objectives found in a much longer document (the Directive itself) which is in turn subject to a 45 day public comment period.

The Directive picks up much of what was already outlined by the CRTC in its preliminary consultation documents, making it explicit (if there was any lingering doubt) that user generated content on social media platforms will not be regulated. This issue became a major distraction during the legislative process, resulting in wild and unfounded accusations that the Bill would impose censorship on Canadians. Also important is the explicit recognition that discoverability and showcasing of Canadian content can be achieved by many means, not just through manipulation of algorithms. In fact, the Directive states that the CRTC shall “implement discoverability in a way that respects and, where possible, increases choice for users, while also minimizing the need to alter algorithms of broadcasting undertakings.” (emphasis added).

International Commitments

So far so good but, in my view, a couple of key elements are missing from the directives given to the Commission. The first relates to what the document describes as “contextual factors” that need to be considered when implementing the Act. These include the UN Declaration on the  Rights of Indigenous Peoples (UNDRIP), Canada’s official languages policy of English-French bilingualism and support for Indigenous languages, the need to serve all Canadians including “equity-seeking groups”, digital transformation, and international commitments. It is this last factor I have difficulty with. It is a given that any modification of domestic policy must take into account commitments Canada has made internationally through bilateral or multilateral treaties. However, the only international treaty mentioned and thus considered relevant is the 2005 UNESCO Convention on the Protection and Promotion of Diversity of Cultural Expressions.

While a worthy document outlining the importance of cultural expression, this is a non-binding treaty. Although declared to be complementary to other treaties, the UNESCO Convention does not override or modify them. In other words, if it conflicts with other binding obligations such as WTO or bilateral trade commitments, the latter prevail. In my judgement, it is a gross and probably deliberate omission to ignore mention of any other commitments that Canada may have that could be impacted by the implementation of C-11, such as the new NAFTA (CUSMA), the Canada-EU Agreement (CETA) or bilateral agreements that Canada has with countries such as the UK. I have submitted comments to this effect, and I hope that this omission will be addressed when the final version of the Directive is released.

Defining Canadian Content

A second missing element comes into play with respect to the redefinition of Canadian content. The CRTC is directed to support Canadian creators and media, and to maximize the use of Canadians in the creation, production, and presentation of programming. This by itself is an unobjectionable, even laudable, policy objective. The question is how will it be done? The Commission is also directed to examine how it defines Canadian programs, in both the audio and audio-visual sectors, taking into account “the crucial roles played by Canadian independent producers and production companies, and the crucial relevance of Canadian creative personnel that have a high degree of creative control or visibility — such as actors, writers, directors, and showrunners — being used by both Canadian and foreign broadcasting undertakings.” This appears to be code for restricting the definition of Canadian programs to those produced and owned (in terms of copyright) by Canadians. This wording has to be read in conjunction with the section on Regulations, where a number of criteria are listed;

In its determination of what constitutes Canadian programming, the Commission is directed to;

(a) consult Canadians, the creative and production sectors and other interested parties;

(b) support Canadians holding a broad range of key creative positions, in particular those with a high degree of creative control or visibility;

(c) support Canadian ownership of intellectual property;

(d) recognize the distinctions between broadcasting undertakings that distribute audio programs and those that distribute audio-visual programming;

(e) recognize that the Act applies to foreign broadcasting undertakings;

(f) consider, as it relates to audio-visual programming, the vital role of Canadian independent producers and of the Canadian creative resources that are being used by both Canadian and foreign broadcasting undertakings; and

(g) consider whether its determination of what constitutes a Canadian program complements other Canadian content policies that are applicable to the Canadian broadcasting system, including those pertaining to audio-visual tax credits or government funding.

Among the listed objectives, (b) (c) and (f) would appear to lean toward exclusionary measures restricting opportunities for non-Canadian players. While the CRTC has not yet determined if Canadian ownership and retention of intellectual property will constitute an a priori essential condition for determination of Canadian programming, the Policy Directive seems to be pushing the Commission in that direction. The Commission should be allowed the flexibility to weigh these factors against other considerations, such as promoting the telling of Canadian stories.

Unfortunately, there is no mention of the inclusion of identifiable Canadian content among the criteria to be considered when defining what constitutes Canadian programming. This comes back to the ongoing debate, which I described in a blog post last year (“Unravelling the Complexities of the Canadian Content (Cancon) Conundrum”) as to what qualifies as Canadian content for tax credit and broadcast quota purposes. One result of the current policy is that film productions that bear almost no relationship to Canada in terms of content, recognition or storyline can qualify as Cancon, whereas quintessential Canadian stories and productions do not qualify if produced by the “wrong people” (non-Canadians) or with “foreign money”. If the policy objective is to promote the production of more Canadian stories for domestic and international audiences in order to meet political, cultural and social policy objectives, it has largely been a failure. I would like to see Canadian stories, including those that are Indigenous based and produced, and those that represent the rich diversity of Canada’s cultural and linguistic fabric, distributed around the world. And who best to do that than the international (mostly US-based) platforms that operate in Canada? But this is not going to happen if international platforms are handicapped when it comes to investing in and acquiring Canadian content for distribution.

There is also a question of fairness. Given that C-11 will require foreign online platforms to contribute to the creation of Canadian content, it seems to me it is inherently unfair to deny them the opportunity to reap the rewards of their investments by retaining or obtaining the rights for productions they have funded. Besides, the obstacles imposed will obstruct rather than facilitate the international distribution of Canadian content. Yes, the platforms could always try to license the content from the Canadian rights-holder, but that is generally not the way the business model of international content producers works, nor is it the norm in most countries that want to encourage more production of domestic content.

For example, the Motion Picture Association recently released the results of a study (“Defining Canadian Content: Approaches Taken in Other Jurisdictions and Lessons Learned for Canada”) demonstrating that in a study of ten national jurisdictions, most do not require the production company to own the copyright beyond the production stage. The study goes on to argue that this encourages global producers to invest and create content in those countries, employing national talent, which can be shared with audiences around the world. It points out that the Canadian system for defining national content is unusually narrow, providing no room for consideration of broader cultural criteria. By using such a narrow definition, Canada is losing opportunities to promote Canadian stories and culture to the world. The MPA study concludes that “More flexibility in the Canadian content system would support a helpful evolution of business and financing models in Canada, which would be more in keeping with the maturity of the sector and matching the level of sophistication of its production companies.”

The Policy Directive has an opportunity to fix this blind spot by giving the CRTC more room to manoeuvre when it comes to defining Canadian content and programming. The Directive is open for public comment (until July 25). If the definition of Canadian content was widened by incorporating additional factors, such as the nature of the content produced and its impact on promotion of Canadian identity and culture, this could result in a more flexible implementation of the Canadian content and programming definitions. It would be to Canada’s overall benefit for the government and CRTC to opt for a broader and more inclusive definition rather one that is narrow and exclusive. Walled gardens of content do not work. The audience is world-wide. The international platforms have the infrastructure to deliver and export Canadian content globally. Why not encourage them to invest in Canadian content and distribution rather than “tax” them while tying their hands?

I have submitted my views to the government via the Canada Gazette website. I encourage others to do the same.

© Hugh Stephens, 2023. All Rights Reserved

As the Writers’ Guild of America (WGA) strike grinds on with no end in sight, the impact is being felt not just in the US where picketing has halted some productions. Given the global production of US studios, the strike has echoes in the UK, Canada, Australia and elsewhere. It is being watched particularly closely in Canada, known colloquially as “Hollywood North” owing to the large number of US productions filmed in Vancouver, Toronto and elsewhere.

US production, known in Canada as “Foreign Location Shooting” (FLS) is a multi-billion dollar industry. Last year, FLS production accounted for 57 percent of overall film and television production in Canada, which totalled $11.69 billion in 2022. When there is a strike amongst US writers, clearly there will be impact on these US-created-but-filmed-in-Canada-productions. It was reported in Toronto that there was an almost immediate slowdown in scouting for new US shows, although shows in production continued as scripts had already been created. Some in the industry, such as actors, have said that they were almost immediately put out of work, while others, such as a family member who works in VFX and post-production, has reported no change—yet. Canadian production (theatrical and television), which is unaffected by the strike, provides some buffer although this accounts for only about one-third of the industry. Canadian broadcasters’ in-house productions account for roughly another ten percent.

Members of the Writers Guild of Canada (WGC) can continue to work on new Canadian scripts (the WGC agreement with the Canadian Media Producers Association rules out any strike action until the termination of the present Production Agreement, currently December 31, 2023), but the WGC laid out some strict conditions for its members relating to “struck work”. This is particularly confusing because some WGC members are also members of the WGA. Some of them reside in Canada, others in the US. If a writer is a dual WGC/WGA member and resides in the US, WGA strike rules apply. A Canadian WGC writer who resides in the US and is also a member of the WGA cannot return to Canada to work. Dual members who reside in Canada can continue to work on Canadian productions and US co-productions but cannot “pitch” them. (i.e. seek new writing contracts). This was explained during an interview between Toronto-based screenwriter Anthony Q. Farrell  and CBC host Elamin Abdulmahmood;

Farrell: Here’s the thing: I’m in a very weird, unique position where I’m a member of the Writers Guild of America and the Writers Guild of Canada. I can continue to work on Canadian productions, and Canadian productions that are in co-productions with American studios — but I can’t pitch them. And also, this is only because I live in Canada. If I lived in America, the WGC and WGA would be telling you, “All right, you live in America, you stay there. You’re part of the WGA strike. Don’t come back to Canada to try and find work.”

WGC members working on shows in Canada cannot accept “struck work”, which is anything that is normally a WGA show such as US-based productions and productions already under a WGA contract. While not striking (but also not strike-breaking), the WGC says that it stands in solidarity with the WGA, as have many scriptwriters’ associations around the globe.

Although the strike is already having a slowdown impact on FLS production, as with just about anything there are some potential limited upsides. For example, if the strike continues there is a possibility that US networks may pick up some Canadian shows to round out their schedules, as happened during the last WGA strike back in 2007.

Concerns of Canadian writers are similar to those put forward by the WGA members; a decline in revenue for writers as a result of shorter series, fewer writers in writing rooms and different forms of compensation (one-time payments as opposed to payment plus residuals). This has largely arisen from the growth of streaming productions as opposed to traditional network television series. Another issue is a concern that AI may eventually be used to take over some roles filled by union members, such as producing initial scripts leaving writers to polish rough drafts produced by AI generated content. The WGA wants assurance that AI will not be used to do the work performed by writers. The screenwriters are one of the first, if not the first, occupation to strike out of concern for AI created job displacement, but they won’t be the last. However, while the battle lines are just beginning to be drawn on setting conditions regarding how AI is used to create content, given the early stage of development we are currently in regarding the role of AI in the workplace it is very unlikely the film industry will agree to any provisions that would tie its hands. Instead, the employer group, the Alliance of Motion Picture and Television Producers (which represents the studios and networks), has offered an annual meeting to discuss advancements in technology. This is keeping the door open to dialogue without making any commitments.

Resolution of the WGA’s grievances will not be easy. While the ultimate issue is about money and job security, the more specific issues relate to how streaming content is produced, and who gets to decide how productions are made. If fewer writers are required for shorter periods, is the solution to increase compensation for the work available or to featherbed by requiring a minimum number of writers no matter what the nature of the production? Logic dictates that it will be the former. If in the future shorter series requiring fewer writers will be the norm, how can this reality be accommodated to meet the needs of both sides? The WGA wants to protect writers’ jobs and incomes; the industry wants to stay competitive and be able to adapt and tailor its production processes to the needs of the content produced.

At the end of the day a solution will be found. Production cannot take place without writers, AI or no AI. Equally, if there are no productions there will be no work for writers. A compromise will have to be struck. What the nature of that compromise will be, and how long it will take, is the question. All parts of the industry–in Hollywood, Hollywood North (Canada), the UK, Australia and elsewhere around the globe where film production, especially US financed production, takes place–are watching and waiting to see how this ends.

© Hugh Stephens, 2023. All Rights Reserved.

Just days after Canada’s controversial Online Streaming Act (aka Bill C-11) finally cleared Parliament and was proclaimed law, the CRTC (Canadian Radio-television and Telecommunication Commission), the regulatory body empowered to implement the widespread changes to the Broadcasting Act encompassed by C-11, seized the initiative. First out of the gate was a “Myths and Facts” page to debunk some of the misinformation spread about the bill. The “myths” included claims the CRTC will regulate content and digital creation while exercising jurisdiction over social media users and content generated by them. Along with rebutting these claims, (a person who uploads content to a social media platform is not a broadcaster) the Commission denied it has been given authority to censor what consumers watch, read or listen to online or to regulate the algorithms or prices of online streaming services, nor will it regulate online video games. The broad intent of the legislation is to regulate online streaming services as broadcasters, with detailed implementation left to the CRTC.

As the legislation worked its way through Parliament, there were criticisms as to what it would lead to, particularly whether the Act empowered the CRTC to regulate user-generated content when implementing the objective of increasing the “discoverability” of Canadian content. That morphed into ridiculous accusations that C-11 would implement censorship, with government bureaucrats telling people what to read and creators what to write. Comparisons were even made with the Soviet Union and North Korea, including by people who should have known better like respected author Margaret Atwood, even though she later admitted she had not even read the Bill.

After tackling the misinformation that is out there, the Commission’s next move was to issue a road map for the consultations that are to come, as well as an information bulletin outlining transition provisions as new regulations are implemented. The roadmap is a regulatory plan that breaks the consultations into three phases, beginning immediately. Phase 1 will involve three separate proceedings; 1. Consultation on contributions to the Canadian broadcast system (to consider who should contribute, how much and how), 2. Consultation on registration of online streaming services (which online streaming services will need to be registered with the CRTC), 3. Consultation on exemption orders and basic conditions of service (what changes are needed to update the orders under which online services have operated in the past). Each of these proceedings is backed up by a Notice of Consultation document, referenced above, calling for submissions by June 12, 2023 (June 27 in the case of the consultation on mandatory contributions), with final replies to any comments raised during the consultation period to be filed by July 12. All of this will lead to a public hearing beginning in Ottawa on November 20. There will clearly be no summer leave for CRTC staff this year. Intervenors will also need to go into high gear quickly. The documents are detailed; for example, the consultation on who should contribute, and how, to the Canadian broadcast system runs some 30 pages and poses 39 specific questions of intervenors.

Phase 2, which will take place in the fall and winter of this year and in early 2024, will include the public consultation, as well as publication of an updated Regulatory Plan and engagement on definitions of Canadian and Indigenous content. These preliminary engagement sessions with industry and creators are to help design the approach for a full and separate public consultation to include the all-important issue of how to define what constitutes Canadian content (CanCon). This is one of the most fundamental issues the CRTC has to tackle as I discussed in a blog posting earlier this month (“Canada’s Online Streaming Act (Bill C-11) is Now Law: What Happens Next?). The consultation document on contributions to the Canadian broadcast system notes (in para. 18) that many of the current funding programs that support the creation of Canadian content are not available to international online undertakings, yet they will be required to contribute to them. The new contribution framework will need to consider, therefore, how to ensure equitable treatment between domestic and international online undertakings in supporting the creation of Canadian and Indigenous content.

Phase 3 will mark the launch of the new regime, supposedly toward the end of 2024.

This is a very ambitious blueprint from an organization that is not exactly known for being nimble. If anything, the CRTC is viewed by some as an overly bureaucratic entity subject to regulatory capture by the industry it regulates. It has an extremely broad mandate, covering not just broadcasting but also telecommunications, and the “to do” list mandated to it by C-11 is extensive. Rather than being prescriptive, the Online Streaming Act gives the Commission wide scope to implement the basic principles outlined in the legislation. The government has announced that it will be issuing a Policy Directive to the CRTC to guide it during the implementation phase. That has not yet been released so it is all the more remarkable that the Commission has been so fast out of the gate. This no doubt reflects two things; new energy and direction from Chair Vicky Eatrides, appointed in February of this year, and the election timetable.

Eatrides, a lawyer by training, held senior positions in the Competition Bureau before being named CRTC Chair this year. Her marching orders were clear. The announcement of her appointment noted that the Commission was “facing waning trust” and needs to up its game in the following three areas; “Timeliness of decision making; Accessibility of CRTC processes to the public, non-corporate interest groups, and civil society; Openness and transparency”. The new Chair is demonstrating that she got the memo. The second consideration is election timing. If the current Supply and Confidence agreement with the New Democratic Party (NDP) holds through the full term of this government, the next election must be held by October 2025. The opposition Conservatives, who are currently polling strongly, have vowed to repeal the Online Streaming Act, claiming it is the “Liberal Censorship Act”. The Trudeau government needs to ensure that the new regime is fully implemented and operative by the time of the next election to forestall this possibility. Once implemented, it would be extremely difficult, costly and probably counter-productive to try to dismantle.

It is encouraging to see the CRTC step up and engage quickly. They have a gargantuan task on their hands and the clock is ticking. Broadcasters, both traditional and online, will want to know the rules of the game and nature of the playing field as quickly as possible. It will be a busy summer.

© Hugh Stephens, 2023. All Rights Reserved.

This question about Section 230 has been asked a number of times since Canada ratified the USMCA/CUSMA text that included Article 19.17.2, which says, in part;

“no Party shall adopt or maintain measures that treat a supplier or user of an interactive computer service as an information content provider in determining liability for harms related to information stored, processed, transmitted, distributed, or made available by the service, except to the extent the supplier or user has, in whole or in part, created, or developed the information”

At the time, some Silicon Valley supporters, both in Canada and the US, (“Thank You Professor! “Explaining” Section 230 to Canadians”) crowed that Section 230 of the Communications Decency Act–the 1996 US legislation that over the years has provided internet platforms in the US with broad civil immunity against liability for illegal or harmful third-party content they have distributed or provided access to—had finally come to Canada. Section 230 has been widely abused by platforms that have refused to take down defamatory and damaging content posted by users on their service despite clear knowledge of the existence of that content and the harm caused by it.

Because of limitations inserted into the Agreement, not everyone agreed that CUSMA required Canada to implement Section 230-like immunities for internet platforms. I am certainly in this camp, as I wrote. (“Did Canada get “Section 230” Shoved Down its Throat in the USMCA?”). However, if there was ever any doubt about whether such immunities do not exist in Canadian law, they were dispelled by a recent decision of the Quebec Superior Court (A.B v Google). It cost Google $500,000 (admittedly a rounding error for this company) to get the message.

That clear message is: Section 230 immunities don’t apply  in Canada so stop trying to hide behind them.  

Prominent IP lawyer Barry Sookman has a detailed post on the case. The plaintiff (whose identity is protected) was wrongly accused by a third party back in 2007 of being a pedophile. The plaintiff attempted to get the original post removed and to have Google take down the link to it. At first Google complied— for its Canadian search service only–but reinstated the link after the 2011 Crookes case in which the Supreme Court of Canada ruled that a hyperlink, by itself, does not constitute publication of the content to which it refers. However, Crookes also led the Court to conclude that once ISPs or other platforms acquire actual or constructive knowledge that their systems are being used to disseminate defamatory content, they may be liable for publishing it unless they take steps to prevent its publication. (For a fuller discussion, see Barry Sookman’s 2011 post on the case here). As a result of Google’s actions (or inaction), the results kept appearing, causing extreme damage and suffering to the plaintiff and his career, despite the fact that he had been wrongly identified. Google was aware of the harm but did nothing.

The judge summarized Google’s actions as follows;

Google variously ignored the Plaintiff, told him it could do nothing, told him it could remove the hyperlink on the Canadian version of its search engine but not the U.S. one, but then allowed it to re-appear on the Canadian version after a 2011 judgment of the Supreme Court of Canada in an unrelated matter involving the publication of hyperlinks. Google finally settled on the position that the Canadian version of Google Search will remove the “STC”, i.e. snippet (short extract from the website), title of the website, and cache (stored snapshot of the website at issue) attached to the hyperlink for the Defamatory Post, but not the hyperlink itself. As for other country-specific versions of Google Search, including that of the U.S., the link and the STC would remain.

Google argued that Quebec law (which provides for platform immunity against publishing defamatory content provided that the platform has no knowledge of the defamation) did not apply, and even if it did, it must be interpreted in a way that is consistent Article 19.17.2 of the USMCA/CUSMA. As Sookman puts it;

“Specifically, Google argued that CUSMA requires that the (Quebec) Civil Code liability be constructed as broadly as s.230 of the Communications Decency Act (CDA), a controversial law that provides wide immunity to service providers and which would shield Google from defamation claims brought against it in the United States.”

The Court wasn’t buying this argument. As I have noted elsewhere, when CUSMA was ratified in Canada, an implementation bill was introduced into Parliament to bring Canadian laws into conformity with commitments made in CUSMA. But there were no legislative changes introduced as a result of Article 19.17.2—because none were required. The Article was subject to a footnote that indicated that Canada could comply “through its laws, regulations, or application of existing legal doctrines as applied through judicial decisions.” In other words, secondary and vicarious liability for defamation continues to apply in Canada.

With regard to a potential conflict between the relevant Quebec legislation and CUSMA, the Court noted that any fault that Google committed was not as a result of it being an “information content provider” (as referred to in Article 19.17.2) but rather as an “intermediary that provides technology-based documentary referral services”. According to Quebec law, such an intermediary cannot be held liable for the behaviour of the content provider, but it has potential liability when it becomes aware, as Google was, that its services are being used for illicit activity, and does nothing. Moreover, the language in Article 19.17.2 is far narrower than the immunity provision in Section 230 of the US legislation. Finally, concluded the court, there is a general exception in the CUSMA allowing an override for the preservation of public morals.

Google also argued that Quebec law did not extend to its search engine, which is based in the US, because of jurisdictional issues. This was an argument similar to the one presented in the Equustek case when Google argued that the British Columbia Supreme Court had no authority to order it to delist specified IP-infringing content from its global search engine, as opposed to just Google Search in Canada. That case, which I wrote about at the time, (here) went to the Supreme Court of Canada. Google lost. The Quebec court rejected Google’s jurisdictional arguments because the company had demonstrated that it has the ability to geo-block access to its search services based outside Canada, but elects not to do so. The Court also rejected Google’s argument that Crookes provided it with immunity since hyperlinking does not constitute publication. Google was not an “innocent disseminator” because it knew that the material to which it was providing access was defamatory, yet consistently took no action. Finally, the Court found that Google is not a neutral intermediary but in fact curates the links it provides given that the company presents itself as a reliable source of information, not a purveyor of disinformation.

In summarizing the outcome of the case, Sookman states;

“The court’s interpretation of CUSMA and the decision in Crookes and its characterization of Google as a “curator” of information rather than as a mere intermediary, are also likely findings that will be applicable across the county (sic)”

This is not the first time that Canadian courts have delivered judgements demonstrating clearly that anyone who thinks Section 230 applies in Canada, and that they can hide behind it, is dreaming in technicolour. In March of 2021 I wrote about the case of Frank Guistra, a resident of both British Columbia (BC) and California who sued Twitter in BC for publishing and then refusing to remove defamatory tweets about him. Twitter sought unsuccessfully to have the case heard in California where it would have benefited from Section 230 immunity. As I noted in that post (“Will Article 19.17 of the USMCA/CUSMA Influence Canadian Court Proceedings? (The Long—or Short?—Arm of Section 230”);

“The court asserted territorial competence because the harm to the plaintiff, a BC resident, occurred in BC (as well as elsewhere). It then determined it had jurisdiction–despite the existence of US law on the subject–because under US law the plaintiff would have had no cause of action (because of Section 230) for the harms suffered in BC.”

If we need any further proof that Section 230-like immunity arising from Article 19.17.2 of CUSMA just doesn’t apply north of the 49^th parallel, I noted a news item in my local media the other day indicating that BC’s Attorney-General was putting technology companies on notice, warning them they could face orders to stop the distribution of intimate images of BC residents where those images have been shared without consent. As Section 230 critic Danielle Citron has noted, Section 230 as interpreted by various US courts has conferred immunity on sites in the US that encourage and solicit intimate privacy violations, not to mention immunity for simply refusing to remove such images. That is not going to happen in Canada. The new BC law, will set out civil liability for an online company that has not taken reasonable steps to address the non-consensual distribution of images on their site, including an order for damages. (A new provision introduced into the US Senate, the “Stopping Harmful Image Exploitation and Limiting Distribution Act of 2022 (SHIELD Act) would also eliminate Section 230 immunity for platforms in sextortion cases by making such activity a criminal act. Section 230 immunity applies only to immunity in civil cases).

Whether its Google, Twitter, Facebook, Pornhub, or any other internet intermediary trying to hide behind Section 230 in Canada on the basis of Article 19.17.2 of the CUSMA/USMCA, it is time for a reality check. It cost Google $500,000 to learn that lesson. For Google this financial penalty is like a fly landing momentarily on its arm (its legal fees defending the case were likely more) although the plaintiff, who sought $6 million in damages, has appealed the modest sum. Nevertheless, Google’s lawyers will take note and hopefully next time the platform will be more responsive and more responsible when it serves as the knowing distribution platform for false and defamatory information in Canada.

© Hugh Stephens 2023. All Rights Reserved.

On Thursday, April 27, Bill C-11, the Online Streaming Act, finally made it over the finish line after almost three long years extending over two Parliaments. The Canadian Senate voted to adopt the bill as returned to it by the House of Commons after the Commons accepted some Senate amendments but rejected others. Thus, the first legislation in over thirty years to amend the Broadcasting Act was passed. When the Broadcasting Act was last amended (1991), AOL was just emerging as an internet giant, flip-phones were the latest thing, and the most common internet sound was the screech of a dial-up connection. Google was still seven years away from being born. Bill C-11 will extend the reach of the Broadcasting Act, and the broadcasting regulator, the CRTC (Canadian Radio-television and Telecommunications Commission), to cover online streaming content. That simple concept will have wide implications for content production and distribution in Canada.

Judging by who you talk to, C-11 is the best thing that has happened to promote Canadian content and culture in a very long time or is a deeply flawed bill representing the worst possible form of government overreach, interfering with freedom of expression and undermining opportunities for digital creators. It is seen by some, such as the Canadian Media Producers Association as a positive step toward ensuring the vitality of Canadian creativeness in the digital age, although they think it does not go far enough because it seems to hold foreign streamers to a lower standard than Canadian broadcasters. For others, such as the Washington DC based high tech trade association, the Computer & Communications Industry Association (CCIA), C-11 is a discriminatory and unwanted intrusion into the market affecting US companies in ways that violate Canada’s international trade obligations under the US-Canada-Mexico Agreement (USMCA/CUSMA). Google has been vocal that it will negatively impact YouTube and tried to mobilize YouTube users to oppose the legislation. In particular, YouTube objects to being required to install Canadian content discoverability features on its platform. Much of the controversy has revolved around whether user-generated content will be captured by new regulations to be developed to implement the legislation.

As for the trade agreement arguments, I deal with them in detail in this analysis recently published by the School of Public Policy of the University of Calgary. (Spoiler alert: the CCIA’s arguments that Canada will have to invoke the CUMSA cultural exception clause because the legislation violates national treatment and other CUSMA commitments are a valiant lobbying effort, but unsubstantiated.)

At this stage no one knows for sure exactly how the bill will be implemented because the CRTC is required to engage in public hearings as part of its rule-making process. It will also be provided with further guidance through a Policy Directive to be issued by the government. While some, such as Michael Geist of the University of Ottawa, have criticized the Bill for creating a long, drawn-out process that will likely not see the final regulations in place until 2025, it is important for the CRTC to get it right within the overall guidelines they have been given by the legislation and the policy directions they will receive. After all, it has been 33 years since the Broadcasting Act was amended so why quibble about a few months of consultation? If the CRTC rushes the process, they will be subject to criticism for moving too quickly. (The requirement for extensive CRTC hearings was not Geist’s only criticism of the Bill. In fact, he has criticized just about every aspect of the legislation in an endless series of blog posts, to the point where one wonders if there is anything left in the legislation for him to find fault with).

One of the elements of the legislation the Policy Directive will apparently deal with is to provide clarity regarding user-generated content, confirming that it will not be subject to regulation–although the platforms that carry it will be. Heritage Minister Rodriguez has repeated on numerous occasions that it will be “platforms in; users out”. This may be a distinction without a difference, and it will be interesting to see exactly how this will be achieved. Early in the process the government closed a loophole in the legislation that would have allowed platforms like YouTube that host user-generated commercial content to evade the requirements to promote Canadian content, such as music, in videos. The music industry –especially in Quebec–was concerned that this would negate the intent of the legislation to promote Canadian music content. An elaborately developed definition put forward as an amendment by the Senate that would have defined what forms of content were captured by the legislation based on who did the uploading was rejected by the government, presumably because it was too prescriptive. In the end, Senators passed the revised legislation without this amendment after the government gave public assurances that Bill C-11 “will not apply to user-generated digital content.”  

The bill includes a number of other measures as part of its objective to promote Canadian content on streaming services. One of these to redefine what constitutes Canadian content (CanCon). Right now, the definition is a complex web of funding and creative requirements that vary across music, film and television as I outlined in this blog post on the topic last year. (“Unravelling the Complexities of the Canadian Content (Cancon) Conundrum”). The definition is important because not only does the achievement of Canadian cultural objectives hang on it, but so does a lot of funding. The new Act instructs the CRTC to consider the following in arriving at a new definition of CanCon; (Regulations — Canadian programs 1.1)

(a) whether Canadians, including independent producers, have a right or interest in relation to a program, including copyright, that allows them to control and benefit in a significant and equitable manner from the exploitation of the program;

(b) whether key creative positions in the production of a program are primarily held by Canadians;

(c) whether a program furthers Canadian artistic and cultural expression;

(d) the extent to which persons carrying on online undertakings or programming undertakings collaborate with independent Canadian producers, with persons carrying on Canadian broadcasting undertakings producing their own programs, with producers associated with Canadian broadcasting undertakings or with any other person involved in the Canadian program production industry, including Canadian owners of copyright in musical works or in sound recordings; and

(e) any other matter that may be prescribed by regulation.

The bill will also require streaming services to make “maximum, and in no case less than predominant, use of Canadian creative and other human resources in the creation, production and presentation of programming” (subject to some exceptions for non-English or French language programming) but foreign streamers are subjected to a somewhat lesser requirement. They are only required to “make the greatest practicable use of Canadian creative and other human resources”. However, they are also required to contribute “in an equitable manner” to strongly support the creation, production and presentation of Canadian programming. Criteria for calculating financial contributions are not fixed but will almost certainly include measurement of revenues generated by foreign streaming services in Canada. Canadian streaming services, like Canadian broadcasters, will also be required to contribute to Canadian production.

The requirement for foreign streamers to contribute to Canadian production is an issue the CRTC will need to handle carefully. It is one thing to set conditions that have to be met when foreign content producers are seeking to access a subsidy (e.g. minimum Canadian spend, use of certain Canadian talent) but it is quite another when these same producers are required to provide the subsidy. If they are not given fair and equitable access to the content they have indirectly funded, this could call into question the fairness of the CRTC regime. Requiring that all copyright be held by Canadians for a production to qualify as CanCon could be an obstacle. One solution might be to allow co-productions between foreign streamers and Canadian indie producers, allowing for assignment of copyright to one of the co-producers.

This won’t satisfy those who see keeping the rights in Canadian hands as a policy objective but may be a realistic way to deal with the desire to promote Canadian independent production while not unfairly handicapping foreign funders. While not directly related to CanCon, no one wants to jeopardize the huge amount of Foreign Location Shooting (FLS) production that takes place in Canada. These are US shows shot in Canada in order to access film production credits and benefit from lower Canadian production costs. FLS constitutes the largest amount of Canadian production by value but has nothing to do with Canadian stories or content. US scripts and lead actors are used, but Canadian production crews and post-production facilities benefit. Netflix, for example, has extensive production facilities in Canada. What the Canadian AV production industry wants to do is keep and grow the FLS sector while shifting more foreign funding into production of CanCon. Bill C-11 gives the CRTC a stick to do this, but a bit of carrot would be helpful as well.

Whether the CRTC will be able to thread that needle will be determined as it develops the regulations to implement the intent of the Online Streaming Act. Stay tuned. It will be a long ride.

© Hugh Stephens, 2023. All Rights Reserved

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

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

Rights in Audiovisual Works

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

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

Korean Content

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

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

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

International Best Practice

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

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

© Hugh Stephens 2023. All Rights Reserved.

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

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

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

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

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

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

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

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

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

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

© Hugh Stephens 2023. All Rights Reserved

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

“SUNSET SERENITY, BEING AN IMAGE AND POEM ABOUT SUNSET AT AN ONTARIO LAKE CREATED ENTIRELY BY AI PROGRAMS DALL-E2 AND CHATGPT (POEM) ON THE BASIS OF PROMPTS DEMONSTRATING MINIMAL SKILL AND JUDGEMENT ON THE PART OF THE HUMAN AUTHOR CLAIMING COPYRIGHT”.

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

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

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

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

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

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

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

© Hugh Stephens, 2023. All Rights Reserved.

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

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

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

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

A golden glow spreads across the water’s ledge.

I sit in my Muskoka chair, calm and still,

Sipping a cool drink as the world grows chill.

The haunting cry of the loon pierces the air,

Echoing through the forest without a care.

The colors of the sky shift and change,

As the sun’s last rays slowly fade away.

In the distance, the forest creatures stir,

The rustling of leaves and the whir of a bird.

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

Watching the sunset and feeling free.

The lake becomes still as the sun disappears,

And darkness envelops the world without any fears.

But memories of this moment will forever stay,

Etched in my heart as I drift away.

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

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

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

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

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

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

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

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

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

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

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

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

© Hugh Stephens, 2023. All Rights Reserved.

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

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

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

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

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

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

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

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

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

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

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

© Hugh Stephens, 2023. All Rights Reserved.