ARCHIVED — Chapter 2, Provisions and Operation of the Copyright Act

Supporting Culture and Innovation: Report on the Provisions and Operation of the Copyright Act

This chapter sets out the Government of Canada's assessment of the operation of the Copyright Act, including a listing of key issues that may need to be addressed in the coming years. Although this list is extensive, it is not meant to be exhaustive. It comprises outstanding issues from previous rounds of amendments, new issues that have emerged primarily as a result of the development of the Internet and other digital technologies, and the key issues relating to specific international trends and developments.

The Act has for the most part served Canadians well since its coming into force in 1924. Its basic layout remains unchanged and, with relatively minor modification, it has responded to the technological challenges to rights holders posed by the phonogram, radio and television broadcasting, and the videocassette recorder. Now the Act faces another major challenge with respect to the Internet (and the digital environment). It is timely to assess the issues that the Government of Canada may need to address to keep the Copyright Act modern, balanced and consistent with international trends.

The typical legislative response to new technological developments has been to implement new rights for authors and others, often with corresponding exceptions for users. The Copyright Act has as a result become a complex array of rights, exceptions, rules and procedures that interplay across nine parts. It has accordingly been criticized for being overly complex, unclear and at times difficult to apply. Since copyright is now relevant to so many individuals, businesses and institutions, the ability to understand the Act is an important element of its function and purpose. As issues are being considered, thought will therefore have to be given to how ultimately to make the Act simple, coherent, balanced, internally consistent and easily comprehensible. This is the broad issue affecting the operation of the Copyright Act as a whole.

The specific issues set out in this chapter are organized thematically under two sections: recognition and protection of works and other subject matter; and access to and use of works and other subject matter, as well as related issues. They comprise both outstanding issues left over from previous reform efforts and new issues that have arisen as a result of technological developments. In each case, the issue is stated and followed by a brief discussion including, where relevant, reference to the reform activities in foreign jurisdictions.

A. Recognition and Protection of Works and Other Subject Matter

The Copyright Act recognizes rights and provides protection for creators and other rights holders in order to promote important cultural, economic and social public policy objectives. From such recognition flow the economic and moral rights that benefit rights holders and enrich the Canadian cultural fabric. Stakeholders have expressed concerns with respect to the scope and adequacy of existing rights and have raised the need for legislative amendments. This section addresses rights holder issues relating to the copyright and moral rights in literary, dramatic, musical and artistic works, performers' performances, sound recordings and communications signals, as well as related issues.

A.1 Copyright and Moral Rights in Literary, Dramatic, Musical, and Artistic Works

A.1.1 Authorship of films and videos

Issue: Whether the Act should be amended to specify the author or the first owner of copyright in a film or video.

The Act does not currently identify the author of a cinematographic work (i.e. film). A long-standing issue is who should be considered the author or authors of such a work (e.g. director, producer or screenwriter). The film industry has settled some of the practical issues through various contractual mechanisms. However, to facilitate copyright clearance, and film production financing, some believe it may be desirable to clarify who is the author or to create a rule on the first ownership of copyright in cinematographic works. Moreover, there must be an identifiable author to determine the applicable term of protection in cinematographic works.

The European Union (EU) has decided that the principal director of a film is an author, and allows member states to determine whether any other parties may be a co-author.¹⁶ The U.K. makes the producer and director joint authors.¹⁷ France provides authorship to screenwriters and composers of the screen music in addition to the director, but anyone who has contributed some creative input can be classed as a co-author.¹⁸ In Australia, the producer is considered the author and the owner of the copyright.¹⁹

A.1.2 Authorship of photographs

Issue: Whether section 10 of the Act should be amended to provide photographers with the same authorship right as other artistic works.

The author of a work is usually the person who creates it. Where the work is a photograph, however, the owner of the initial negative or photograph (if there is no negative) is deemed to be the photograph's author. This rule of authorship of photographs deviates from the general rule that the human creator is the author of a work (the rationale being that the author can be an individual or a corporation). The rule also means that photographers who do not own the negative or photograph hold neither the copyright nor the moral rights in the photograph. This deviation dates back to when photography was commonly regarded as an industrial operation rather than a potential art form, and when the inadequacy of early photographic equipment restricted a photographer from expressing "originality" in his or her work. Photographers argue that the deviation is no longer justifiable and seek an amendment to the Act. The copyright regimes of most of Canada's international partners generally treat photographs in the same way as other artistic works.

A.1.3 Crown copyright

Issue: Whether section 12 of the Act should be amended to limit copyright protection in certain government material, including limiting the comprehensive nature of the government's right when a work is produced by an independent author, or to limit its perpetual right in unpublished Crown works.

Crown copyright refers to copyright in works by federal, provincial and territorial governments and their agencies. Examples of Crown copyright material include government reports and studies, parliamentary debates, statutes and regulations, judicial decisions and statistics. The Copyright Act provides that, subject to any agreement to the contrary, governments own the copyright in any work that has been prepared or published by any of their departments or under their direction or control.

Because government materials are produced in the public interest and from public funds, it has been argued that governments ought not to exercise copyright to limit their accessibility or use. By eliminating Crown copyright, however, the ability of governments to provide material on a cost-recovery basis could be hampered²⁰ which could limit the types of information that would be produced for the benefit of the public. The Government of Canada may of course grant a royalty-free licence to use certain works protected by Crown copyright (as is the case for laws and judicial decisions²¹ ), but other documents would have to be licensed. At present, licensing the use of works subject to Crown copyright may sometimes represent a substantial burden for the user. Unless user-friendly licensing is put in place, there is likely to be increasing pressure to remove from the Act Crown copyright protection entirely.

This issue has important implications for the various departments and Crown agencies as well as for users such as librarians and archivists. There will also be a need to coordinate between the various levels of government.

A.1.4 Databases

Issue: Whether the Act should be amended to provide for some form of protection for non-original databases.

A database is a collection of digitized information, facts, works or other material that has been arranged in such a way that a user can retrieve items having certain characteristics or meeting certain criteria. Organizations, such as publishers, commercial enterprises, hospitals, educational institutions, libraries and archives, expend considerable resources in developing and maintaining databases, whether for commercial or non-commercial, internal or external use. Providing appropriate legal protection for databases can therefore provide important incentives to invest in their creation and use.

A work that results from the selection or arrangement of works or data may itself be protected as a "compilation" as defined in the Copyright Act. From this definition, many databases receive copyright protection with its attendant rights, exceptions and term of protection. Exactly which databases benefit from copyright protection remains unclear, however. Recent court decisions suggest that the selection and arrangement of the underlying works or data must be sufficiently "original" to qualify for protection. The fact that considerable effort or money was invested in the creation of the database may be irrelevant. A broader issue is whether copyright protection, with its particular rights, exceptions and term of protection, is the most appropriate way to protect databases.

Internationally, the issue of database protection was raised during the 1996 Diplomatic Conference in Geneva, which led to the conclusion of the WCT and WPPT²². No consensus was reached among WIPO member states at that time. In the same year, however, the EU adopted its Database Directive, which provides for special rights for "non-original" databases.²³ The directive prohibits the extraction from, or re-use of, any database in which there has been a substantial investment in obtaining, verifying or presenting the data. Australia protects databases under traditional copyright law based on the effort needed for their creation.²⁴ In the U.S., compilations are protected on the condition of originality.²⁵ A number of bills protecting non-original databases have been presented to Congress,²⁶ but no consensus has yet been reached.

A.1.5 Droit de suite (resale royalty right)

Issue: Whether the Act should be amended to provide visual artists with the right to receive a percentage of the price paid upon subsequent resale of their work.

Unlike writers and composers who can collect royalties whenever their works are performed or published, the income of many visual artists is derived primarily from the first sale of works embedded in a unique original or in a limited number of copies (e.g. sculpture or signed lithographs). Droit de suite is the right of the author of an artistic work to receive a percentage of the selling price arising from its subsequent resale. Concerns have been expressed that the introduction of such a right would discourage resale of such artistic works in Canada (i.e. important works might be sold at auctions in jurisdictions without such a right.) No such right exists in Canada at present, though the Act does not prevent a buyer and seller from voluntarily including such a term in an agreement of purchase and sale. The EU requires its member states to phase in a droit de suite in their legislation²⁷ and the state law of California also provides for a resale right.²⁸ Further analysis is required to assess the potential impact of a droit de suite on buyers, sellers and intermediaries.

A.1.6 Distribution right

Issue: Whether the Act should be amended to introduce an explicit distribution right in order to comply with the WIPO treaties.

The 1996 WIPO treaties provide for a "right of distribution" which includes the right of authorizing the making available to the public of tangible copies of copyright material through sale or other transfer of ownership.²⁹ In Canada, this right may be covered to a large extent by the publication right.

A.1.7 First ownership of commissioned photographs

Issue: Whether to amend subsection 13(2) of the Act to provide that the author is the first owner of copyright in a commissioned photograph.

The first owner of copyright in a commissioned photograph, engraving or portrait is deemed to be the individual or corporation who commissioned the work. Bill C-32 altered the ownership rule for photographs slightly by effectively making the photographer the owner of copyright in the event that he or she has not been paid for the commissioned work.

Photographers have asked that this rule be eliminated so that, as with other types of works, the photographer is the first owner of copyright. They argue that eliminating this rule would be necessary for Canadian photographers to exploit large and valuable databases of photographs that may be commissioned for advertising or other commercial purposes but are never used. Other concerns have been expressed, however, with respect to photographs commissioned for private or domestic purposes, e.g. family or wedding portraits, notably that the photographer may use these photographs in ways not contemplated by the person who commissioned the photograph.

There is no EU-wide regulation dealing with this issue. The U.S., U.K. and Australia do not have a special rule with respect to the first ownership of commissioned photographs. The U.K. grants certain rights of control to a person who commissions a photograph or film for private or domestic purposes, while Australia has a comparable right with respect to photographs only.³⁰

A.1.8 Fixation

Issue: Whether the Act should be amended to clarify whether fixation is a requirement for copyright protection.

Although not defined in the Act, fixation refers to the existence of a work in a material form. Case law effectively makes fixation a requirement for copyright protection in Canada and some other countries (e.g. the United States (U.S.)), but not in a number of other countries around the world. The question is whether it should remain as a substantive condition of copyright (condition de fond) when in fact its origins suggest that it is essentially a practical, evidentiary requirement.³¹While the requirement seems understandable for certain types of works (e.g. sound recordings and audiovisual productions), its application in other areas is questionable. It has led to incongruous judicial decisions in the case of oral works (such as speeches and interviews) where copyright was granted not to the speaker but to the person recording what was said.³² Fixation as a substantive requirement for protection has essentially been eliminated with respect to musical performances.

A.1.9 Linking

Issue:Whether the Act should be amended to provide that linking to another Web site, which contains infringing material, ought to be considered copyright infringement.

In the Internet context, "linking" refers to the use of a hypertext link by which a Web site and its content are made directly accessible from another site that the user is "browsing". Typically, the user reaches the new site by clicking on underlined text or an icon that represents the link. Although a given site may contain no infringing material, its links may lead to sites that do.

A.1.10 Making available right

Issue: Whether the Act should be amended to give rights holders an exclusive right to make their copyright material available on an on-demand basis over digital networks.

The current Copyright Act covers all forms of communication to the public over digital networks (i.e. the Internet) whether by an exclusive right (for authors) or the right of remuneration (for performers and sound recording makers). Rights holders consider it essential to have the right to authorize or control the appearance of their copyright material in all media including the networked environment. This control is provided for in both the WCT and WPPT in the form of a making available right.³³ This would be an exclusive right to authorize a communication on an "on-demand" basis, i.e. at a time and place of the choosing of the user, as opposed to a right of remuneration. The communication right that currently exists in section 3 of the Act may already afford this type of protection to authors. However, the Act would likely need amendment if the same type of protection were to be recognized for sound recording makers and performers.

Similar to Canada, the U.S., the EU³⁴ and Australia ³⁵ have communication rights that largely cover authors. The U.S. has recognized rights for communication to the public in a digital environment for the owner of the sound recording. (i.e. phonorecord delivery³⁶ and interactive communication³⁷ ). Performers have such rights if they are co-authors of the sound recording. The EU requires member states to provide for the exclusive right to authorize or prohibit the making available to the public of both performances and sound recordings.³⁸ Australia provides for a making available right to the copyright owner of the sound recording³⁹ through the definition of the communication right. Performers do not yet have any performance or communication right with respect to fixed performances.

A.1.11 Moral rights

Issue: Whether sections 14.1, 28.1 and 28.2 of the Act should be amended to address outstanding moral rights issues.

New technologies have provided more ways for users to manipulate works, which has raised questions surrounding the scope of moral rights. Writers and artists have expressed concern that digital technologies, such as the Internet, facilitate the alteration of the integrity and paternity of works, and that stronger protection of moral rights may therefore be warranted. Moreover, authors contend that the Act creates unfavourable contractual circumstances because it explicitly indicates the possibility of waiving moral rights but does not require that the waiver be in writing. Authors believe that some parties will require them to waive their moral rights as a pre-condition to the use of their works. Some stakeholders have also suggested that the absolute right of integrity in certain artistic works in subsection 28.2(2) should be explicitly limited to originals or limited editions.

A.1.12 Reproduction right for artistic works

Issue: Whether the Act should be amended to change the definition of "reproduction" as it relates to artistic works, thereby expanding the reproduction right of visual artists, given the emergence of new technologies that allow transference of works from one medium of display to another.

This issue arises from the interpretation of "reproduction" that the Supreme Court applied in the recent Théberge decision.⁴⁰ The Court found that a transfer of a print of a painting from a poster to a canvas through a chemical process that left the poster blank did not constitute a "reproduction" within the meaning of the Copyright Act. Artists have expressed concern that the reproduction right may be inadequate to protect what they view as their right to prevent such copying of their works by people who can take advantage of new technologies to transfer works without producing additional copies.

A.1.13 Rights management information

Issue: Whether the Act should be amended to prohibit tampering with rights management information that is normally used to identify works and other subject matter.

Rights management information generally refers to information that identifies a work or sound recording, such as the title, the author or first owner, the performer and an identifying code. It can also refer to terms and conditions related to the use of copyright material. The ability of rights holders to embed rights management information in their material helps them assert their interest in the material and monitor its use, especially in the network context. It can also facilitate on-line licensing. The information is only useful if its integrity is maintained, however. The WCT and WPPT both require member states to provide legal protection against tampering with rights management information that may be embedded in a work or sound recording.⁴¹ The Copyright Act currently contains no such provisions.

A.1.14 Rights of freelance periodical writers

Issue: Whether the Act should be amended to expressly provide that any rights not explicitly assigned remain with freelance periodical writers.

Recent cases in both Canada and the U.S.⁴² have addressed whether freelance writers who sell their material to newspapers, magazines or similar periodicals for print publication may prevent other uses of their material not originally contemplated by agreement or industry custom, notably digital reproduction and distribution. The Act gives rights holders considerable flexibility in assigning or licensing their rights. Some have requested, however, that the Act be amended to expressly provide that any rights not explicitly assigned remain with the author. This issue is complicated because it raises difficult questions of contract law, including questions related to the writers' bargaining power.

A.1.15 Technological protection measures

Issue: Whether the Act should be amended to provide sanctions against persons who use circumvention technologies to infringe copyright by defeating protective technologies such as encryption.

New technologies have made it relatively easy to make "perfect" copies of digitized material with no loss in quality from the original. When combined with networks such as the Internet, which transmit digitized content, these technologies mean that copyrighted material becomes easily available to a worldwide audience. Some rights holders are naturally concerned that once their works, performances or sound recordings are available over the Internet, preventing unauthorized dissemination becomes nearly impossible. They have indicated that the adoption of protective or "counter" technologies — encryption, for example — is the means by which they plan to disseminate their material in the networked environment and protect it from copyright infringement. At the same time, such measures could significantly affect lawful access, for example, by fair dealing, various exceptions, and access to material in the public domain. The WCT (for authors) and the WPPT (for sound recording makers and performers), both have provisions dealing with the legal protection of such technological measures.⁴³

The Copyright Act would have to be amended to implement these WCT and WPPT provisions and permit ratification. The various possible approaches to implementation are controversial. U.S. and EU copyright law both have provisions that prohibit not only the act of circumventing protective technological measures, but also the manufacture and trade in devices that may be used to circumvent.⁴⁴ Australian law targets only the devices and not the act of circumvention itself.⁴⁵

A.1.16 Term of protection

Issue: Whether section 6 of the Act should be amended to extend the term of protection to 70 years following the author's death.

The current term of protection under the Copyright Act for a work is consistent with the Berne Convention, which generally requires member states to provide a term of protection of the life of the author plus 50 years. The EU and the U.S. have extended the term of protection to the life of the author plus 70 years.⁴⁶ Rights holders would like Canada to follow suit, but others question as a matter of public interest the need for such an extension.

A.1.17 Term of protection of photographs

Issue: Whether section 10 of the Act should be deleted so as to allow the term of protection of photographs to follow the general rule applicable to other categories of works, currently the life of the author plus 50 years.

The term of protection for photographs prior to Bill C-32 was 50 years from when the initial negative was made, but Bill C-32 changed it to the life of the author plus 50 years if the author is an individual or a corporation owned and controlled by the photographer. If the author is a corporation not owned and controlled by the photographer, then the term is 50 years from the time the initial negative or photograph (if there is no negative) was made. Many photographers believe that the existing rules are confusing and impractical given that corporate authorship can yield different results. The term of protection under the WCT is the life of the author plus 50 years for all photographs.

A.1.18 Term of protection for unpublished works

Issue: Whether section 7 of the Act should be amended to alter the provisions, which will result in certain old unpublished works falling into the public domain in 2004.

The term of copyright protection in Canada is the life of the author plus 50 years following the year of the author's death. The general rule does not apply in all cases, however. Prior to Bill C-32, unpublished works had perpetual protection and posthumous works (i.e. works published for the first time after the death of the author) had protection for 50 years after the date of publication. The Act was amended to change the terms of protection in both cases to the regular term of life of the author plus 50 years following the author's death.

Section 7 sets out two transitional provisions for authors who died more than 50 years before the amendments took effect in 1998 and for those who died within the 50 years immediately preceding the amendments. Unpublished works of authors who died more than 50 years before 1998 are protected until 2004. Unpublished works of authors who died within 50 years of 1998 are protected until 2049.

These transitional provisions have created difficulties for the estates of certain rights holders. Those rights holders who have an interest in unpublished works that will fall into the public domain in 2004 believe that there is insufficient time to exploit the works. This issue is time-sensitive, as any amendments to the Act will need to come into force before 2004.

A.1.19 Traditional knowledge

Issue: Whether to amend the Act so as to create a new class of rights or alter existing rights to protect works of traditional knowledge to take into account the special circumstances of the creation and use of such works.

While copyright protects the creation of specific new works, Aboriginal communities in Canada have expressed concerns regarding their collectively created traditional cultural expressions, often referred as "traditional knowledge". Examples of cultural expressions that Aboriginal people in Canada wish to protect are their stories, songs, music, dances, plays, paintings, decorative art, apparel, architecture, totem poles and designs.

Particular concerns have been raised regarding the misuse of traditional cultural expressions, such as the unauthorized, commercial exploitation of sacred symbols, stories, and songs. In some cases, concerns have been expressed regarding the inability to derive or share in the economic benefits arising from the use of traditional expressions, and the lack of acknowledgment of the source of such expressions. Broader concerns have also been expressed regarding the need to preserve and promote practices and knowledge within their specific cultural context.

Aboriginal groups are raising these concerns domestically in the context of self-government negotiations, and at international discussions. The 1996 Report of the Royal Commission on Aboriginal Peoples recommended, "the federal government, in collaboration with Aboriginal peoples, review its legislation on the protection of intellectual property to ensure that Aboriginal interests and perspectives, in particular collective interests, are adequately protected."⁴⁷ At the international level, issues related to intellectual property and the protection of traditional knowledge are being addressed at various UN fora, such as WIPO, the Convention on Biological Diversity and the UN Permanent Forum on Indigenous Issues, as well as at the World Trade Organization's TRIPs Council, which deals with trade-related aspects of intellectual property rights.

Traditional knowledge does not fit neatly within the usual parameters of intellectual property rights and copyright in particular, often because there is no identifiable author who will be "individually" rewarded and because there may be no identifiable, fixed work. Creating new rights related to traditional knowledge must be approached with caution since there may be an impact on existing rights holders. Analysis must therefore be undertaken to determine whether Canada's copyright regime provides the most appropriate way to protect Aboriginal cultural expressions or whether a new legal regime should be considered.

A.2 Copyright in Performers' Performances, Sound Recordings and Communication Signals

A.2.1 Moral rights for audio and audiovisual performers

Issue: Whether the Act should be amended to provide audio and audiovisual performers with a moral right in their performances.

Performers want moral rights to ensure that their performances are not used in ways that detrimentally affect their honour or reputation. The Act does not currently provide moral rights with respect to performers' performances.

The WPPT contains provisions for performers with respect to their live or fixed audio performances, including the right to be identified as the performer of a performance (the right of attribution), and the right to object to any prejudicial distortion, mutilation or other modification of a performance (the right of integrity).⁴⁸ The WPPT does not have similar provisions for audiovisual performers (i.e. actors).

The U.S. and Australia do not have any statutory provisions that grant moral rights to performers. The EU provides for the exercise of moral rights in accordance with, among others, the provisions of the WPPT.⁴⁹ France protects the moral rights of audio and audiovisual performers,⁵⁰ although not as comprehensively as the moral rights of authors.⁵¹

A.2.2 Reproduction right for performers

Issue: Whether section 15 of the Act should be amended to extend the current reproduction right for performers to comply with the WPPT.

Performers currently have the right to prohibit the fixation of their performances. They also have the right to prohibit the reproduction of any unauthorized fixation, and any authorized fixation if the reproduction is made for purposes other than those for which the original authorization was given. The WPPT provides performers with a full reproduction right, namely, the exclusive right to authorize any fixation or any reproduction of their performances.⁵² To comply with the WPPT, the existing reproduction right under the Act would need to be amended to apply to all performances fixed in the preceding 50 years.

A.2.3 Rights for audiovisual performers

Issue: Whether the Act should be amended to enhance the rights of audiovisual performers vis-à-vis those of producers and copyright owners of films and videos.

Currently, audiovisual performers (e.g. actors) have the right to authorize the embodiment of their performances in cinematographic works (i.e. films). The Act also provides them with the legal means to enforce any right to receive the compensation that is specifically acquired under contracts governing the reproduction, public performance and communication to the public of such cinematographic works. If such contracts are silent on particular uses, however, performers have no right to receive compensation for those uses. Performers want an exclusive right to authorize uses (e.g. reproduction) not specifically assigned away by contract.

A.2.4 Rights for broadcasters

Issue: Whether section 21 of the Act should be amended to extend the rights broadcasters currently have in their signals.

While technological developments bring many benefits, they have also facilitated the unlawful exploitation of broadcast signals. As a result, broadcasters are seeking additional rights to enable them to control access to their over-the-air signals and to receive additional revenues from uses of their signals (such as a full reproduction right, a public performance right and a retransmission right). There is also an issue of whether such signal rights should also be granted in respect of direct-to-cable transmissions (such as specialty channels and pay television). At the international level, the WIPO Standing Committee on Copyright and Related Rights is currently examining the possibility of providing an increased level of protection for broadcasters.

A.2.5 Term of protection for sound recording makers and performers

Issue: Whether section 23 of the Act should be amended to extend the term of protection for sound recording makers to be consistent with the WPPT, and at the same time extend the term for performers.

For sound recording makers, the WPPT provides for a term that is 50 years following "publication" of the sound recording or, failing such publication within those 50 years, 50 years from the year of fixation.⁵³ The term of protection could theoretically amount to 99 years (if publication occurs in the 49th year following fixation). The result is that the makers would potentially be entitled to a longer term of protection than what is currently provided for authors under the Act.

Performers are protected for 50 years following "fixation" of their performances. If the term of protection is extended for sound recording makers, consideration should also be given to providing such an extension for performers to ensure consistency. Such an extension is not required by the WPPT.

A.3 Enforcement and Remedies

A.3.1 Criminal offences - minimum value of infringing copies

Issue: Whether section 42 of the Act should be amended to set a minimum value of the infringing copies in order to be subject to criminal remedies.

Although there is prosecutorial and judicial discretion, it may be desirable to set a minimum retail value of the infringing copies necessary to trigger criminal remedies. In the U.S., the retail value of the copyright works that are illegally reproduced or distributed must exceed $1000 in order for the criminal offence provision to apply.⁵⁴

A.3.2 Definition of "infringing" copy

Issue: Whether the Act should be amended to distinguish between "infringing" and "pirated" copies.

In Canada, the Act's definition of "infringing" copy triggers both criminal and civil remedies. Each occurrence of infringement automatically triggers the application of criminal remedies. The TRIPs Agreement⁵⁵ distinguishes between infringing material (which gives rise to civil remedies) and pirated material (which gives rise to criminal remedies). Introducing a separate definition of "infringing" copy for more serious pirated material for the purposes of criminal remedies may better ensure that the civil and criminal remedies apply in the appropriate circumstances.

A.3.3 Distribution of infringing copies of a work

Issue: Whether section 27 of the Act should be amended to extend infringement to the electronic distribution of infringing copies.

It is a secondary infringement of copyright to "distribute" infringing copies of a work or other subject matter. In the international context, including the WCT and WPPT, the concept of "distribution" applies to tangible copies only.⁵⁶ For the purposes of secondary infringement in Canada, however, it may be desirable to determine whether "distribute" ought to apply to intangible material (e.g. electronic material) and clarify whether dissemination by digital means should be made a form of secondary infringement.

A.3.4 ISP liability

Issue: Whether the Act should be amended to prescribe circumstances under which ISPs, acting as intermediaries, should be held liable for the transmission and storage of copyright material when their facilities are involved.

One of the main functions of the Internet service provider (ISP) is to act as an intermediary between content providers and end users, providing them with the network facilities and services needed to enable communication. The Act does not clearly identify the conditions for imposing liability, nor does it explicitly set out any limitation to such liability. The Copyright Board has considered the question of ISP liability in the context of the right of communication to the public by telecommunication, and their decision has been reviewed by the Federal Court of Appeal.⁵⁷ Application for leave to appeal that decision has been filed with the Supreme Court of Canada.

The U.S. has a limitation on liability of ISPs with respect to transiently reproducing, and caching, hosting of or linking to copyright material.⁵⁸ Except for transient reproduction, liability will be triggered when the ISP is made aware of the infringement and does not take prompt action to remove or disable access to the material (except for transient copies, this is referred to as "notice and take down"). The EU has a mandatory exception for ISPs with respect to transient or incidental reproductions.⁵⁹ With respect to their caching and hosting activities ISPs also benefit from a limited liability regime similar to the notice and take down scheme.⁶⁰ With respect to the communication right, the mere provision of physical facilities for enabling a communication is not considered to amount to communication.⁶¹ Australia exempts ISPs from liability with respect to infringing material communicated via their facilities unless they have control of the material (i.e. they administer the Web site themselves), or following application of certain criteria (the ability to prevent the infringement, the relationship with the infringer, etc.), they are considered as having authorized an infringing act by their subscribers.⁶² In addition, temporary reproduction of a work as part of the technical process of making or receiving a communication does not trigger liability.⁶³

A.3.5 Printers' liability

Issue: Whether the Act should be amended to limit the liability of printers and copy shops.

Because infringement of the reproduction right is a matter of strict liability - actual knowledge of the infringement is irrelevant - printers and copy shops may be liable for the infringing activities of their customers even if they lack knowledge of the infringing character of such activities. The issue is whether, taking into account existing licensing arrangements, the liability of printers and copy shops should be excluded or whether they should be subject to more limited remedies, considering their practical inability to control the content of the material processed through their services. Consideration may need to be given as well to extending limited liability to other independent reproduction services.

A.3.6 Statutory damages

Issue: Whether section 38.1 of the Act should be amended to alter the criteria for awarding statutory damages.

Arguments have been raised for both lowering and raising the limits of statutory damages for copyright infringement. If they are set too high, they represent a hardship; if set too low, their power to deter infringement is limited.

At present, virtually any infringement of the Act, however minor, can trigger statutory damages. In certain circumstances, these can create hardships or inequities. Although no case of minor or innocent infringement in Canada has yet been awarded statutory damages, the issue arises as to whether the plaintiff should be required to establish a minimum threshold of actual damages suffered before statutory damages may be claimed. In addition, given that the boundaries of fair dealing are not obvious in all circumstances, it may be desirable to exempt certain potentially infringing acts from the application of statutory damages, such as those undertaken for research or private study or for private, non-commercial purposes.

A.4 Registration and Priority of Security Interests

Issue: Whether the Act should be amended to provide for the creation of a national registry system for security interests in copyright.

In Canada there are some legal impediments that affect businesses' ability to borrow money on the basis of collateral consisting of their intellectual property assets. Although the Copyright Office at CIPO allows registration of most security interests, the legal value of such registration in the face of provincial securities registration systems remains uncertain. To assist financial institutions in the valuation of copyrights, it has been proposed by stakeholders that a national registry might be desirable. The Law Commission of Canada has been considering this issue.

There are federal-provincial considerations underlying this issue. Security interests in personal property are generally regulated under provincial personal property security legislation in the common law provinces and under Book Six of the Civil Code of Quebec. Another consideration is the priority that a security interest takes when there is more than one type of interest registered against the same intellectual property.

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¹⁶ EC, Council Directive 92/100 of 19 November 1992 on the rental right and lending right and on certain rights related to copyright in the field of intellectual property, [2001] O.J. L. 167/10, art. 2.2, on-line: The European Commission (http://europa.eu.int/smartapi/cgi/sga_doc? smartapi!celexapi!prod!CELEXnumdoc &lg=en&numdoc=31992L0100&model=guichett).

¹⁷ The Copyright, Designs and Patents Act 1988 (U.K.), 1988, c. 48, s. 9(2)(a), [hereinafter the U.K. Act] on-line: HMSO (http://www.hmso.gov.uk/acts/ acts1988/Ukpga_19880048_en_1.htm).

¹⁸ Code de la propriété intellectuelle (Fr.), art. L. 113-7, [hereinafter the French Code], on-line: Legifrance (http://www.legifrance.gouv.fr/ html/frame_codes1.htm).

¹⁹ Copyright Act 1968 (Aus.), ss. 98, 189, on-line: Australasian Legal Information Institute (http://www.austlii.edu.au/au/ legis/cth/consol_act/ca1968133/).

²⁰ Note, though, that the U.S. Government publishes large amounts of material in spite of the absence of copyright protection on (domestic) governmental documents in that country.

²¹ At the national level, the Government of Canada has already determined that its laws and regulations ought to be freely available to its citizenry. Although Crown copyright still exists in such material, the Government of Canada has decreed, by Order in Council, that it will not exercise its rights except to prevent alteration or other clear abuses. Reproduction of Federal Law Order, P.C. 1996-1995, SI/98-113(F) on-line: The Department of Justice Canada (http://laws.justice.gc.ca/en/ otherreg/SI-97-5/177965.html). These laws and regulations are available on-line from the Justice Canada Web site.

²² Basic Proposal For The Substantive Provisions Of The Treaty On Intellectual Property In Respect Of Databases To Be Considered By The Diplomatic Conference, on-line: WIPO (http://www.wipo.org/eng/diplconf/6dc_sta.htm).

²³ EC, Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases, [1996] O.J. L. 77/20, on-line: The European Commission (http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc& lg=en&numdoc=31996L0009&model=guichett); implemented in the U.K. in 1998 as a new 15-year "database right." See also, Robert Howell, Database Protection and Canadian Laws (October 1998) prepared for Industry Canada and Canadian Heritage on-line: Strategis (http://strategis.ic.gc.ca/SSG/ip01045e.html).

²⁴ The Australian Copyright Act 1968, supra, note 18, ss. 10, 32. Also, Telstra Corporation Ltd. v. Desktop Marketing Systems Pty. Ltd. [2002] FCAFC 112.

²⁵ The definitive case in this area is Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340 (1991).

²⁶ There have been at least two different federal statutes proposed in the U.S. to deal with the protection of databases but neither has yet passed. Bill H.R.354, The Collection of Information Antipiracy Act, 106 Congress (introduced 1/19/1999) on-line: The Library of Congress (http://thomas.loc.gov/) and Bill H.R. 1858, The Consumer and Investors Access to Information Act of 1999, 106 Congress (introduced 5/19/1999), on-line: Library of Congress (http://thomas.loc.gov/)

²⁷ EC, Directive 2001/84/EC of the European Parliament and of the Council of 27 September 2001 on the resale right for the benefit of the author of an original work of art, [2001] O.J. L. 272/32, on-line: The European Commission (http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=en&numdoc =32001L0084&model=guichett)

²⁸ California Civil Code s. 986, on-line: Official California Legislative Information (http://www.leginfo.ca.gov/cgi-bin/ displaycode?section=civ&group= 00001-01000&file=980-989)

²⁹ WIPO Copyright Treaty, 20 December 1996, CRNR/DC/94, art. 6, on-line: WIPO (http://www.wipo.org/eng/diplconf/distrib/94dc.htm), [hereinafter WCT]; WIPO Performances and Phonograms Treaty, 20 December 1996, arts. 8 and 12, on-line: WIPO (http://www.wipo.int/clea/docs/en/wo/wo034en.htm) [hereinafter WPPT].

³⁰ The U.K. Act, supra, note 17, s. 85. The Copyright Act 1968 (Aus.) supra, note 19, s. 35(5) and (7).

³¹ Canadian Admiral Corp. v. Rediffusion Inc., supra, note 5.

³² Gould Estate v. Stoddart Publishing Co. (1996), 30 O.R. (3d) 520, aff'd (1998), 39 O.R. (3d) 545; Hager v. ECW Press (1998), 85 C.P.R. (3d) 419 (F.C.T.D.).

³³ WCT, art. 6(1) and WPPT, art. 8(1), supra, note 29.

³⁴ EC, Council Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonization of certain aspects of copyright and related rights in the information society, [2001] O.J. L. 167/10, art. 3(1), on-line: The European Commission (http://europa.eu.int/smartapi/cgi/sga_doc? smartapi!celexapi!prod!CELEXnumdoc&lg=EN&numdoc=32001L0029&model=guichett).

³⁵ Copyright Act 1968 (Aus.), supra, note 19, ss. 10, 31.

³⁶ 17 U.S.C. § 115(c)(3)(H), on-line: The United States Copyright Office (http://www.copyright.gov/title17/circ92.pdf).

³⁷ 17 U.S.C. § 114 (d)(1), ibid.

³⁸ EC, Council Directive 2001/29, supra, note 34, art. 3(2).

³⁹ Copyright Act 1968 (Aus.), supra, note 19, ss. 10, 85.

⁴⁰ Théberge v. Galerie d'Art du Petit Champlain Inc. (2002) SCC 34, on-line: Lexum (http://www.lexum.umontreal.ca/csc-scc/en/rec/html/laroche.en.html).

⁴¹ WCT, art 12; WPPT, art 19, supra, note 29.

⁴² Tasini v. The New York Times, 200 U.S. 321 (2001). Robertson v. Thomson Corp., [2001] O.J. No. 3868 (S.C.J.); Association des journalistes independants du Québec(AJIQ-CSN) c. CEDROM-SNEI, (1999), 500-06-000082-996J.Q. no. 4609.

⁴³ WCT, art. 11: "Contracting Parties shall provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne Convention and that restrict acts, in respect of their works, which are not authorized by the authors concerned or permitted by law."  WPPT, art 18: "Contracting Parties shall provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by performers or producers of phonograms in connection with the exercise of their rights under this Treaty and that restrict acts, in respect of their performances or phonograms, which are not authorized by the performers or the producers of phonograms concerned or permitted by law." Supra, note 29.

⁴⁴ 17 U.S.C. § 1201, supra, note 36; EC Directive 2001/29, art. 6, supra, note 34.

⁴⁵ Copyright Act 1968 (Aus.) supra, note 19, s. 116A.

⁴⁶ Council Directive 93/98/EEC of 29 October 1993 harmonizing the term of protection of copyright and certain related rights, O.J. L. 290/9, on-line: The European Commission (http://europa.eu/old-address.htm?smartapi!celexapi!prod!CELEXnumdoc&lg=en&numdoc=31993L0098&model=guichett); Sonny Bono Copyright Term Extension Act, Pub. L. No. 105-298, 112 Stat. 2827 (1998), the United States Copyright Act 17 U.S.C. § 302, supra, note 36.

⁴⁷ Canada, Report of the Royal Commission on Aboriginal Peoples, vol . 3 (Ottawa: Supply and Services Canada, 1996), p. 601, highlights available on-line: Department of Indian and Northern Affairs Canada (http://www.ainc-inac.gc.ca/ ch/rcap/rpt/index_e.html).

⁴⁸ WPPT, art. 5, supra, note 29.

⁴⁹ EC, Council Directive 2001/29 supra, note 34, recital 19.

⁵⁰ The French Code supra, note 18, art. L. 212-2.

⁵¹ The French Code, supra, note 18, arts. L. 121-1 to L. 121-4.

⁵² WPPT, art. 7, supra, note 29.

⁵³ WPPT, art. 17(2), supra, note 29.

⁵⁴ 17 U.S.C. § 506(a)(2), supra, note 36.

⁵⁵ Being Annex 1C to the Final Act and Agreement Establishing the World Trade Organization, 15 December 1993, 33 I.L.M. 81 [hereinafter TRIPs].

⁵⁶ The WCT Agreed statement can be found at http://www.wipo.int/treaties/ip/wct/statements.html  Concerning Articles 6 and 7 the statement reads as follows: "As used in these Articles, the expressions 'copies' and 'original and copies,' being subject to the right of distribution and the right of rental under the said Articles, refer exclusively to fixed copies that can be put into circulation as tangible objects." The WPPT Agreed statement can be found at http://www.wipo.int/treaties/ip/wppt/statements.html Concerning Articles 2(e), 8, 9, 12, and 13, the statement reads as follows: "As used in these Articles, the expressions 'copies' and 'original and copies,' being subject to the right of distribution and the right of rental under the said Articles, refer to fixed copies that can be put into circulation as tangible objects."

⁵⁷  Society of Composers, Authors and Music Publishers of Canada v. Canadian Association of Internet Providers, et. al., [2002] F.C.A. 166 [hereinafter Tariff 22].

⁵⁸ 17 U.S.C. § 512, supra, note 36.

⁵⁹ EC, Council Directive 2001/29, supra, note 34, art. 5(1)(a), confirming EC, Council Directive 2000/31 of 17 July 2000 on certain legal aspects of information society services, in particular electronic commerce in the Internal Market, O.J. L. 178/2, art. 12(2), on-line: The European Commission (http://europa.eu.int/eur-lex/pri/en/oj/ dat/2000/l_178/l_17820000717en00010016.pdf).

⁶⁰ EC, Council Directive 2000/31/EC, ibid. arts. 13, 14.

⁶¹ EC, Council Directive 2001/29, supra, note 34, art. 5.

⁶² Copyright Act 1968 (Aus.), supra, note 19, s. 39B.

⁶³ Copyright Act 1968 (Aus.), supra, note 19, ss. 43A, 111A.