Originally written on April 6, 2011
Introduction
Perhaps the most prevalent issue surrounding music today is how we consume it. The manner in which we have enjoyed music has changed constantly throughout history and it is currently in the midst of one of its most drastic transformations. The digital age has altered everything from the way we record music to the way we promote it, discover it, and listen to it. In a time when everything is at one’s fingertips in a manner of seconds via the Internet, music is no different and in recent years this has turned the industry on its head. At the heart of this technology-driven transformation there exists a contentious, and at times volatile, debate surrounding the matter of intellectual property. More specifically, copyright has been the focus of recent discussion as the Canadian Government and courts seek to strike an appropriate balance between the interests of rights owners and the interests of consumers of music.
Looking at the history of the music industry and the effects of technological advances, we will examine the transformation with a view to understanding the recent judicial and policy responses. Specifically, we will gauge how copyright law and policy has been able, or failed, to strike this balance to date and consider what the future might hold.
The History of the Music Industry
Without delving too deeply, it is important to look at how the music industry has developed over the years in order to understand the way that technology has continuously played a key role. Such a retrospective is also necessary to gain a full understanding of how and why copyright has become a relative battlefield in recent years. Prior to the early twentieth century the way that music was consumed was very different. Unlike today, where we feel the need to take it with us everywhere, music was enjoyed as live entertainment. Through events like cabarets, vaudeville, and intimate shows, people heard and experienced music. It was not until the creation of technologies developed in the late 1870s by General Electric founder Thomas Edison, his competitor Emile Berliner and Columbia Phonograph’s Edward Easton, that recorded music could now be taken home.[1] With the ability to capture artists’ sounds onto vinyl cylinders and discs, there suddenly existed a product rather than an experience, which could be written, recorded, sold, and collected. The notion was attractive and by 1899 when The Columbia Gramophone Company went international (based in the United States, with offices in London and Paris), their sales of phonographs climbed to a million dollars for the first time.[2] This development marked one of the first fundamental and technology-driven changes in the music industry and authors of sheet music decried such advancements for stealing their content and destroying their market.[3] Striking a balance between copyright owners and users, the United States Congress responded with the creation of a “mechanical reproduction right”. This gave owners control over the terms under which their music could be recorded, while affording others the right to make subsequent recordings of the same music upon paying a royalty.[4]
Jumping ahead almost a hundred years, the Recording Industry Association of America (RIAA) reported in 1990 that the cassette now dominated the configuration of music purchases, holding 55% of the market compared to 31% for CDs (which became the most popular two years later) and 5% for vinyl LPs.[5] During this lengthy span of time, the medium had changed but the industry’s model and control over their product had remained essentially the same. Blissfully drawing in approximately $15 billion in sales in the United States alone in 1999, it seems no one in the music industry could have foretold the immense changes that awaited.[6]
Having begun in 1969 as a military computer network (ARPAnet), the Internet was only just acquiring a public persona in the early 1990s.[7] That being said, the number of Internet hosts (which function to allow users to serve content to the Internet) increased from 56,000 in 1988 to almost 4 million in 1994 and to over 29 million by 1998.[8] Throughout the decade, Internet usership was also increasing at a rate of approximately 100% per year.[9]
Specifically relevant to the music industry, it was in 1992 that the Moving Picture Experts Group, a working group of researchers established by the International Organization for Standardization and the International Electrotechnical Commission, approved the MPEG-1 (including the MP3) as the new medium for computer based audio files.[10] It was this compact, digital embodiment of music that was to become the “file” of the now infamous peer-to-peer (P2P) “file-sharing”. Created in 1999 by Shawn Fanning and distributed for free online, the introduction of the Napster software allowed those who installed it to share their MP3s with each other over the Internet.[11] The public reaction to the technology was immediate and by August 2000, Napster had 20 million users.[12] As with any successful technology, this P2P network had followers including Grokster, Limewire and KaZaA to name a few. Introduced the same year as Napster was shut down, KaZaA showed the continued popularity of file sharing, boasting the accumulation of 160 million users between 2001 and 2002.[13] To put this into perspective, “pirate” sites were seeing totals of more than 600 million free downloads each week in 2006.[14]
At the close of the decade, there was no denying that digital was the wave of the future and that the music industry was going through perhaps its first elementary change since the beginning of recorded music. The era of the physical product was beginning to fade. Piracy aside, by 2010 the iTunes Store lead all music retailers in the United States with a 28% share of the purchased music market while digital sales on the whole accounted for 40%.[15] As with any area of the law, such elemental changes in the realities of the market led to a slew of new legal questions and litigation as those with vested interests began to feel out the new territory and declare their concerns.
The Purpose of Copyright
Equipped with a view as to how the industry has changed, we must now turn our attention the primary object of this exercise. Namely, we will look specifically at the crucial role that copyright has played and continues to play in balancing the interests of those involved. Fundamental to this examination is determining what role it is that copyright is meant to play in our society. Unfortunately, recent litigation and news headlines have caused many of us to associate copyright with a source of conflict that is personified by large companies suing the public. In reality however, copyright is meant to strike a balanced harmony between content owners and the public. The objective is to afford owners a set of narrow and exclusive rights that are granted in exchange for the publication and eventual dedication of their work to the public domain.[16] Professor Litman, of the University of Michigan Law School, describes this compensation model as one that has
permitted authors to earn enough money from the works they authored to make it worthwhile for them to create the works and make them available to the public, while not allowing them to impose unwarranted conditions on the public’s use of their works.[17]
Essentially then, what copyright law seeks to do is administrate this exchange and this balance between the copyright owners and users. It is important to keep this fundamental purpose in mind as we move forward in our examination of copyright.
Under Part I of Canada’s Copyright Act we see much of what constitutes the owners’ share of the balance. Exclusive reproduction and performance rights (s.3), author’s moral rights (s.14.1) and a copyright subsistence term of “life of author” plus 50 years (s.6) provide owners with the protection and compensation of which Professor Litman speaks. Additionally, Part II, and specifically ss.15 to 18, flesh out some of the intricacies pertaining to sound recordings and s.82 provides for levies on blank audio recording mediums.[18]
Counterbalancing the scale, the “fair dealing” provisions in s.29 (discussed more fully later) and Part VIII of the Act, regarding “private copying”, represent the rights of users in interaction with these protected works. Given the recent issues surrounding P2Ps, s.80 is of particular importance in that it precludes users from being found liable for reproducing sound recordings for personal use onto audio recording mediums. As noted by s.80(2), this right is tempered by not being extended to copying done for the purposes of selling, renting or communicating the music (whether publically or by telecommunication).[19] As lawyer Robert Piasentin notes, “as a result, on a strict reading of the Canadian Act, the sharing of MP3s through P2P networks is arguably prohibited while the actual copying is permissible”.[20] With this groundwork in mind, we can now begin to look at the way that jurisprudence has dealt with these competing concerns, as well as understand what some recent developments might mean for the future of copyright in Canada.
A Judicial History
As with our examination of the music industry’s past, we cannot limit our investigation of the judicial history to a purely Canadian perspective. Like many areas of the law, Canadian copyright is affected and influenced by developments in the United States and so they are an important element in our discussion. A good place to begin then is by looking at what has been tagged the “Betamax” case. This ruling came out of the Supreme Court of the United States and centered on Sony’s manufacture of the Betamax VCR which used cassettes to record potentially copyrighted content from television. The importance of this case is the fact that it marked a “technology neutral” approach to the law.[21] As Justice Stevens stated, it was imperative that they
strike a balance between a copyright holder’s legitimate demand for effective – not merely symbolic – protection of the statutory monopoly, and the rights of others freely to engage in substantially unrelated areas of commerce. Accordingly, the sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses… the business of supplying the equipment that makes such copying feasible should not be stifled simply because the equipment is used by some individuals to make unauthorized reproductions of respondents’ works.[22]
Thus, despite the attempt by the major Hollywood studios to put an end to this “threatening” device, the courts had taken a definitive stance against suppressing technology. Similarly, when the RIAA brought their suit against the manufacturers of the portable Rio MP3 player, the US courts would not come to the music industry’s aid. Rather, they ruled that the copying of songs from purchased CDs to one’s computer and then to the device amounted to mere “space shifting” and accorded with the purpose of the Audio Home Recording Act of 1992.[23] The purpose, of which they spoke, was to “ensure the right of consumers to make analog or digital audio recordings of copyrighted music for their private, noncommercial use.”[24]
In an important Canadian example, the Supreme Court of Canada addressed the intersection of copyright and technology in the case of CCH Canadian v. Law Society of Upper Canada. This time in the context of a photocopier service, the court affirmed what Betamax had said 20 years earlier:
A person does not authorize infringement by authorizing the mere use of equipment that could be used to infringe copyright. Courts should presume that a person who authorizes an activity does so only so far as it is in accordance with the law… This presumption may be rebutted if it is shown that a certain relationship or degree of control existed between the alleged authorizer and the persons who committed the copyright infringement.[25]
In response to an Australian case that had taken the opposite view[26], Chief Justice McLachlin stated that such a finding “shifts the balance in copyright too far in favour of the owner’s rights and unnecessarily interferes with the proper use of copyrighted works for the good of society as a whole.”[27]
Finally, the case of BMG Canada Inc. v. John Doe struck another apparent victory for users, but this time tempered with a warning from the Federal Court of Appeal. The record labels alleged that some 29 users had downloaded 1000 copyrighted songs and so they brought a motion for disclosure of the users’ identities by five Internet service providers (ISPs). The court rejected the motion on the basis of insufficient evidence but more importantly, the Federal Court of Appeal admonished the trial court for prematurely concluding that the ruling in CCH was applicable to downloading.[28] Justice Sexton was quick to add that the court was not ruling on the issue of infringement in the case but provided the following thoughts,
Modern technology such as the Internet has provided extraordinary benefits for society, which include faster and more efficient means of communication to wider audiences. This technology must not be allowed to obliterate those personal property rights which society has deemed important. Although privacy concerns must also be considered, it seems to me that they must yield to public concerns for the protection of intellectual property rights in situations where infringement threatens to erode those rights.[29]
These cases are mentioned to provide more than a simple record of jurisprudential history. They are important in demonstrating the approach that courts have taken to creating balance in the realm of copyright. Unfortunately however, they also provide a comparison for just how far in the opposite direction the courts, especially in the United States, have gone in recent years in relation to P2Ps.
Judicial Rulings: P2Ps
An important concept to understand is that under the old music business model there was an intersection between copyright law and traditional property law. When one purchased a CD they became the owner of that physical manifestation and could do with it as pleased (within reason). As Justice Binnie of the Supreme Court of Canada affirmed, “generally, the copyright owner does not by virtue of his or her economic rights retain any control of the subsequent uses of authorized copies of his work by third party purchasers.”[30] With the introduction of MP3s and P2P services the mathematical formula changed so to speak. In the previous model there was a single physical, purchased copy being transferred from one person to another, while under the digital regime the person sharing the music does not relinquish their copy. In essence, each time someone shares a track by allowing another to download it, an additional copy of the song springs into existence. This demonstrates how the industry was thus losing control over their product and provides the backdrop against which the major record labels and the RIAA waged their war on P2Ps.
When the Napster case came before the courts many were surprised, given the results in Betamax, that the ruling was in favour of the record labels. Despite Napster’s assertions that the file sharing occurring through their service was not for any commercial purpose, the court said that users were getting for free what they’d otherwise have to buy.[31] The court went on to find the site responsible for vicarious and contributory liability in violation of copyright law. The ruling apparently resulted from Napster’s inability to monitor illegal downloading while being aware of the possibility of such activities.[32]
Following Napster however, a similar ruling was handed down to another P2P site called Aimster. The importance of this ruling was that the site was found liable despite avoiding the apparent missteps of its predecessor. Neither the posting of a disclaimer concerning illegal use, nor the fact that encrypted files prevented the site from being aware of infringement were enough to protect them.[33] Finally, KaZaA and Grokster faced the same fate. In contrast to the Napster approach, which used a centralized index of the MP3s held by its users, these networks operated by turning each users’ own hard drive into an accessible directory from which the files could be downloaded.[34] Despite the fact that no files ever passed through the sites, the court maintained that the P2Ps had created and distributed their software with the intent of gaining financially (via advertising) from the illegal activities of their users.[35]
When one compares the results in Betamax with those of the P2P cases it becomes quite apparent that there was a shift away from the “technology neutral” approach. Much like the VCR, there are undoubtedly substantial and lawful uses for file sharing technology and yet the courts seemed to ignore it. These technologies create numerous advantages and opportunities in an era of globalization where we interact and shares information socially and in business over great distances. At the very least it meets the obliged standard from Betamax of merely being “capable of substantial non-infringing uses”.[36] It is also unquestionable that Sony developed the Betamax technology for financial gain and yet it seems that in regards to this motive, file-sharing sites have been held to a different standard. Given that so many facets of our daily lives have gone digital, one would not be overstating the matter to say that a file sharing technology has more substantial legitimate public worth than that of a VCR. Perhaps a more pertinent comparison is to look at how the Internet itself, as a more analogous technology, has been addressed.
In the case of SOCAN v. CAIE (Tariff 22) the Supreme Court of Canada held that given the massive amounts of con-copyrighted material accessible online, it is not possible to hold ISPs responsible for those who use it for infringing purposes. ISPs are instead entitled to presume that their services will be used in accordance with the law and, despite knowing that infringing use is possible, an ISP would have to cease to be content neutral in order to be found liable.[37] As the court noted, s.2.4(1)(b) of the Copyright Act shields such providers from liability, including “all software connection equipment, connectivity services, hosting and other facilities and services without which communications would not occur”.[38]
It is curious why this same approach has not been taken to P2P services. While, on its face, it appears that the “content neutral” concept differentiates sharing networks from ISPs, such a distinction is more apparent than real. Napster merely provided a forum for exchange and this cannot be said to be drastically different from what ISPs provide. In the case of Napster they were able to guarantee 98% assurance that their service would be used for only legitimate purposes and still the court ruled against them.[39] Certainly ISPs (and likely Betamax as well) would not be able to assure 98% legitimate use and yet they have been protected. Once online, there is no telling what materials and content users will choose to share with one another or the public. As Justice Binnie noted however,
there is a public interest in encouraging intermediaries who make telecommunications possible to expand and improve their operations without the threat of copyright infringement. To impose copyright liability on intermediaries would obviously chill that expansion and development”.[40]
One is left scratching their head then when they look at the recent trend in relation to file sharing technologies such as the ruling in Napster. In an attempt to elucidate the difference in these cases one might be led to believe that Sony and ISPs have received more protection because of their standing. That is to say they are multinational companies with deep pockets and influential pull while the P2Ps have traditionally been start-up companies founded by digital natives and labeled quickly as “pirates”. This factor is one that must not go unnoticed and so we now turn to an examination of the parties with interests at stake in this struggle.
Labels and Lobbyists vs. Users
As one sorts through the copyright jurisprudence they must be alert to a certain qualification. Without fail, in the cases mentioned the plaintiffs have been large companies, whole industries and their lobbyists. It is no surprise then that most of us have the reaction discussed earlier when we hear the word copyright. We also cannot lose sight of the fact that is often those who can afford to litigate, lobby and contribute financially that have the loudest voices and the most influence. As Professor Litman again aptly articulates,
Commercial content owners (and their copyright lawyers) believe they are in a war for their own survival, and are committing extraordinary resources to ensure they emerge victorious. They are fighting the copyright wars using all of the public relations tools at their disposal. They are fielding armies of copyright lobbyists and making campaign contributions so substantial that members of Congress have started to wage turf battles of their own to get jurisdiction over copyright legislation.[41]
In contrast, the users remain a relatively unrepresented group, albeit the largest, and their voices go unheard. To date, the clearest way users have demonstrated their stance is simply through user action and the statistics are quite compelling. As we’ve already discussed, Internet and P2P usership skyrocketed in a very short amount of time. For the most part however, these P2P sites either cannot afford the litigation and will shut down when faced with costly and risky lawsuits, or have put themselves up for sale to the very ones seeking to dismantle them.[42] While it would be naïve to believe that these P2P sites were not self-interested or that they were altruistically fighting for users’ individual rights, they were still one of the few sources of advocacy that users had in this field.
Having successfully defeated Napster, the music tycoons sought to capitalize on the digital market with BMG and AOL Time Warner launching MuiscNet, Sony and Universal establishing Pressplay and EMI purchasing 40% of MusicMaker.com.[43] In an attempt to control the subsequent use of their content however, the labels’ services were filled with complex licence schemes, expiring downloads that required renewal and other user-unfriendly features.[44] In the end, users were not prepared to succumb to this one sided system and all three services failed. These foiled attempts by the labels were even included in PC World Magazine’s list of the 25 worst tech products of all time.[45] Seemingly unaware of how to cope, the RIAA responded by spearheading the industry’s efforts to regain control by launching 15,000 lawsuits against individual copyright infringers (file-sharers) between 2003 and 2006 alone.[46]
These failures and the ongoing rash of litigation in the United States only seem to demonstrate how far the copyright owners and users still are from existing in harmony. Given that Canada has taken what Piasentin refers to as a “wait and see” approach to developing the law in this field, it would be absurd to claim that a workable copyright balance has already been established in this country.[47] Indeed, one problem contributing to the continuous struggle in Canada is that copyright legislation has not undergone a fundamental overhaul in years and yet technology and user patterns have continued to develop. As such, there remains a great amount of uncertainty as we continue to struggle with applying old copyright law to the realities of the new digital realm. Thus we now turn our attention to a discussion of what the future of copyright in Canada might hold.
The Future: Bill C-32 and Beyond
The Copyright Act underwent its last reformation in a two-phase initiative that spanned from 1988 until 1997[48]. Since that time, Bills C-60 and C-61 marked failed attempts to pass amendments and so the Act has gone without significant revision while the realities surrounding it have transformed.[49] As discussed earlier, one need only look to the immense changes that took place in the music industry at the end of the 1990s to understand how quickly things are shifting.
Thus, it has been with great anticipation and cautious scrutiny that copyright owners and users alike have followed the ongoing development of Bill C-32, introduced in June 2010 as the Copyright Modernization Act.[50] This bill marks the most recently proposed amendments to Canada’s Copyright Act and an attempt to bring the Canadian standards in line with the World Intellectual Property Organization’s (WIPO) Copyright Treaty of 1996. Like every development in this field, Bill C-32 has garnered opposing reactions from interested parties. As of just recently however, it appears that copyright reform will once again have to wait. On March 26, 2011 Parliament was dissolved following a vote of no confidence and so Bill C-32 was scrapped, having only passed a second reading in the House of Commons.[51] Nevertheless, the bill provides an important lens through which to gauge the future of copyright in this country. As Founder and Director of IP Osgoode, Giuseppina D’Agostino noted, it will likely be months before another bill is introduced but the new government will have the Bill C-32 discourse to consider.[52]
In looking at the bill, it seems that the government was indeed trying to again strike a balance in the field of copyright. There were some user-friendly additions as well as some that catered to copyright owners. Unfortunately, when these amendments are considered together it becomes quite clear that had the bill passed it would’ve represented another step towards imbalance in favour of copyright owners. In order to understand why this is the case, some of the various proposed amendments must be explored.
Bill C-32: Expanded Fair Dealing & User Rights
Under s.29 of the current Copyright Act there exists what is known as the “fair dealing” provisions. This section lists a finite group of purposes for which copyrighted materials can be used without infringing copyright. Thus, fair dealing has the effect of carving out a collection of users’ rights in the areas of research, private study, criticism, review and news reporting.[53] Speaking for the court in the case of CCH v. Law Society of Upper Canada, Chief Justice McLachlin explained the importance of fair dealing, noting that it plays an integral part in the Copyright Act by maintaining the proper balance between the rights of copyright owners and users’ interests.[54] Thus, when Bill C-32 sought to expand the enumerated categories to include education, parody and satire it marked an apparent step forward in the battle for user’s rights. In addition, the proposal of a “non-commercial user-generated content” provision, nicknamed the “YouTube” or “mash-up” provision, indicated an important step forward in brining copyright up to date with the realities of usership.[55]
As throughout history, the record labels, artist associations and industry lobbyists were quick to denounce such “threatening” developments. The Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) proclaimed that the mash-up provision would “trample on creators’ economic and moral rights” and on the issue of fair dealing, questioned why if schools paid for desks and teacher’s salaries they should not pay for content as well.[56] In addition, ACTRA decried the bill as not being “technologically neutral” as it failed to extend private copying levies to digital audio recorders (DARs) despite legalizing “format shifting”.[57] Likewise, the Society of Composers, Authors and Music Publishers of Canada (SOCAN) claimed that the levies attached to blank audio recording media in the 1997 amendments had become obsolete in this digital age and that “devices” like the iPod now call for tariffs.[58] Such a suggestion has not gone entirely unexamined however, and even under the current system some have noted that levies on blank recording mediums unfairly tax those using them for unrelated purposes.[59] It is questionable then whether this should now be extended to DARs, especially when one considers that the MP3 player is giving way to all-in-one smart phones and tablets. Such devices have become commonplace in society and purchasers may never use them for music. It therefore hardly seems reasonable to impose such a tax upon all such device users to the benefit of content owners. Most recently, the Federal Court of Appeal settled the matter when they overturned a decision by the Copyright Board to certify a tariff on digital audio recorders proposed by the Canadian Private Copying Collective.[60]
Despite all of their condemnation however, as noted to before, the copyright owners came out ahead in the proposed amendments of Bill C-32. The cause of this unfortunate imbalance can be pinpointed to the bill’s newly designed s.41 bearing the heading “Technological Protection Measures and Rights Management Information”.[61]
Bill C-32: Technological Protection Measures (TPMs)
In 1996, WIPO (a specialized agency of the United Nations dedicated to intellectual property) adopted the WIPO Copyright Treaty, now consisting of 88 contracting party states.[62] As stated in its preamble, the purpose of the treaty is to ensure the protection of author’s rights in an effective and uniform manner while providing solutions to the issues raised by new economic, social and technological developments.[63] Under articles 11 and 12 of the treaty, a requirement for ratification is that member states implement legal protections and remedies against the circumvention of TPMs.[64] In short, TPMs are measures implemented by copyright owners to protect their content by restricting use of or access to the work. Copy-protected CDs, password protection, and encryption algorithms are just some of the “digital locks” commonly used. As it stands, Canada has yet to ratify the treaty, however Bill C-32 sought to implement TPM provisions in accordance with these requirements. The Bill’s proposed amendments to s.41 of the Copyright Act would have operated much to same effect as the United States’ Digital Millennium Copyright Act (DMCA). Specifically, this new section would have prohibited anyone from circumventing TPMs, providing services with the primary purpose of circumvention, and manufacturing, importing or distributing devices with such a purpose.[65]
It is the implications of these proposals that tip the scales in favour of copyright owners. As Dr. Geist, the Canada Research Chair in Internet and E-Commerce Law at the University of Ottawa, explains
All the attempts at balance come with a giant caveat that has huge implications for millions of Canadians. The foundational principle of the new bill remains that anytime a digital lock is used – whether on books, movies, music or electronic devices – the lock trumps virtually all other rights. In other words, in the battle between two sets of property rights – those of the intellectual property rights holder and those of the consumer who has purchased the tangible or intangible property – the IP rights holder always wins.[66]
It becomes quickly apparent then, that any headway made for users’ rights by the expanded fair use or “mash-up” provisions are, in actuality, of little substantial value. So long as copyright owners implement their digital locks, the previously “threatening” allowances made for users’ rights are reduced to paper tigers. Dr. Geist believes however, that is still possible for Canada to comply with the WIPO standards and preserve balance in copyright. In fact, he says it may be as simple as adding a provision that circumvention will not be prohibited when undertaken for lawful purposes.[67] With respect, I believe that even such an inclusion, while important, would fail to address a fundamental issue. The purpose of copyright is not only to protect owners, but also to foster creation, learning and innovation by providing the public with access to content. A legal system that supports digitally locking this content will make it more difficult for the public to access such materials, even legitimately. Whether it requires purchasing legitimate circumvention software or a greater technological aptitude on the part of the user, the effect is still one of a reduction to access. On a more philosophical level, it should be noted that there is a negative connotation that accompanies a law which requires users to “break” a lock before using content. Whether it is intended or not, the message is that fair use is not wholly encouraged or something that should be fostered.
Where Do We Go From Here?
Having seen what the future of copyright in Canada could have very well looked like, we are left with the issue of where we go from here. An important question that must be addressed is one which has lingered in the background of the copyright debate since the time of sheet music. To put it bluntly, should the government and the courts be intervening to keep the business models of days past alive? In the past, it seems the approach of the courts was to support innovation and allow industries to catch up. We saw this in the case of the sheet music business as well as decades later with the VCR, amidst cries from the Motion Pictures Association of America (MPAA) that it was the Boston Strangler of their industry.[68] At some point however, things changed.
It seems that the focus of copyright, or at least the discussion surrounding it, has altered over time. Originally premised on a system of balancing rights, it then became focused on economic incentives, and most recently on the issue of access and control.[69] As Professor Litman explains, owners believe the only way to protect themselves is to have power over not only initial access, but over all subsequent acts of access to their work and thus
copyright is now a tool for copyright owners to use to extract all the potential commercial value from works of authorship, even if that means that uses that have long been deemed legal are now brought within the copyright owner’s control.[70]
Certainly that does not reflect the purpose of copyright and as we mentioned at the beginning of our examination, it is important to keep the purpose in mind at all times. Copyright law is meant to administrate a balance between the rights of the public content owners. Nowhere inherent in this is there the obligation to protect the business models of the day.
Returning to the music industry as the touchstone of our analysis, the introduction of piano rolls, radio, television and the Internet have all marked the supposed end of the business. Nevertheless, the industry is very much alive today. During the height of the Napster and KaZaA piracy boom in the United States, concert revenues (which traditionally go directly to the artists) rose from $1.3 billion in 1998 to $2.1 billion in 2003. This increase occurred despite the drop in CD sales (the bulk of which goes to the labels) by 26% between 2000 and 2003.[71] Similarly, BMI, who collect royalties for songwriters and artists, reported revenues of $637 million in 2004 (an increase of 6.8% from the year before).[72] During this same period however, the major labels were having us believe that the industry was floundering and that without stricter copyright regimes the music trade would up and vanish. It is true that technological advances are causing a market breakdown in the recording industry because the marketplace has been so drastically shocked with extremes. Due to “free music vs. overpriced CDs”, a fair market price has not yet been established.[73] This is the reason that labels are in trouble. As technology has developed, the record labels have made it their prerogative to litigate and suppress rather than adapting. As futurist Alan Kay once famously said, “the best way to predict the future is to invent it” and unfortunately the music industry has been preoccupied with fighting the future instead.
There have been numerous suggestions made for revitalizing and re-monetizing the industry ranging from “online tipping” or “pay what you want” models, to ISP levies, subscription models and compulsory statutory licence regimes. Some have been implemented already and others have become subjects of debate unto themselves. However, these matters are a subject for discussion and analysis beyond the scope of this essay. Rather, the message to be taken from the music industry’s example is that it is not an effective business model to fight technology. Nor should this be the path taken by copyright reform in Canada.
It is not a revolutionary step to acknowledge that nothing created is wholly “new”. It is this realization however, that demonstrates why it is in the interests of society to establish a copyright regime that encourages rather than stifles user interaction with content. Unfortunately, as Professor Litman identified, “recently, copyright legislation has seemed to be a one way ratchet, increasing the subject matter, scope and duration of copyright with every amendment”.[74]
Bill C-32 is the clearest indication we have of where copyright reform in Canada is headed and as we’ve seen, it’s unbalanced and disheartening. The labels, lobbyists and copyright owners are doing their part to fight those technologies they find threatening and to suppress any expansion of user rights. This only represents one half of the interest base however and thus users need to speak up as well. The purpose of copyright is balance and it is clear that it has not yet been achieved. It is also apparent that technology is changing the marketplace evermore quickly and copyright reform cannot afford to be put off any longer. Copyright in Canada must adapt to the realities of the day rather than trying to force an old paradigm to fit and this must always be done with the fundamental purpose of copyright in mind.
[1] David Kusek & Gerd Leonhard, The Future of Music: Manifesto For The Digital Music Revolution (Boston: Berklee Press, 2005) at 37 [Kusek].
[2] Alex Cosper, The History of Record Labels And The Music Industry, online: Playlist Research <http://www.playlistresearch.com/recordindustry.htm> [Cosper].
[3] Lawrence Lessig, “The Creative Commons” (2005) 55 Fla. L. Rev. 763 at 772 [Lessig].
[4] Ibid.
[5] Cosper, supra note 2.
[6] Jay Yarrow, Chart of the Day: The Death of The Music Industry, online: Business Insider <http://www.businessinsider.com/chart-of-the-day-music-industry-sales-2011-2?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+businessinsider+(Business+Insider)>.
[7] Michelle Lee, Finding Middle Ground: Copyright, Technology and the Canadian Music Industry (Ann Arbor: ProQuest LLC, 2005) at 4 [Lee].
[8] Centre for Discrete Mathematics & Theoretical Computer Science, Technical Report, 99-11, “The Size and Growth Rate of the Internet” (February 1999) at 19.
[9] Ibid.
[10] Who We Are, online: Moving Picture Experts Group <http://mpeg.chiariglione.org/who_we_are.htm>.
[11] Lee, supra note 7 at 6.
[12] Ibid. at 7.
[13] Ibid.
[14] Donald S. Passman, All You Need To Know About The Music Business 6th ed. (New York: Free Press, 2006) at 151.
[15] The NDP Group, Press Release, “Amazon Ties Walmart as Second-Ranked U.S. Music Retailer, Behind Industry-Leader iTunes” (May 26 2010), online: The NDP Group <http://www.npd.com/press/releases/press_100526.html>.
[16] Jessica Litman, “War Stories” (2002) 20 Cardozo Arts & Ent. L.J. 337 at 8 [Litman].
[17] Ibid.
[18] Copyright Act, R.S.C. 1985, c. C-42, ss. 3, 14.1, 6, 15-18, 82 [Copyright Act].
[19] Ibid. at ss. 80, 80(2).
[20] Robert C. Piasentin, “Unlawful? Innovative? Unstoppable?: A Comparative Analysis of the Potential Legal Liability Facing P2P End-Users in the United States, United Kingdom and Canada” (2006) 14 Int’l J.L. & I.T. 195 at 442 [Piasentin].
[21] Maria Lilla Montagnani, “A New Interface Between Copyright and Technology: How User-Generated Content Will Shape the Future of Online Distribution” (2009) 26 Cardozo Arts & Ent. L.J. 722 at 724 [Montagnani].
[22] Sony Corp. of America v Universal City Studios, Inc. [1984] 464 USSC 417 at para. 39 [Sony Corp.]
[23] Recording Industry Association of America v Diamond Multimedia Systems Inc. [1999] 180 F.3d 1072 at. para 32.
[24] Ibid.
[25] CCH Canadian v Law Society of Upper Canada, [2004] SCC 13 at para. 38 [CCH].
[26] Moorehouse v University of New South Wales, [1976] R.P.C. 151.
[27] CCH, supra note 25 at para. 41.
[28] BMG Canada Inc. v John Doe, [2005] FCA 193 at para. 51.
[29] Ibid. at para. 41.
[30] Theberge v Galerie d’Art du Petit Champlain inc., [2002] SCC 34 at para 65.
[31] Piasentin, supra note 20 at 440.
[32] Montagnani, supra note 21 at 727.
[33] Ibid.
[34] Ibid. at 728.
[35] Ibid.
[36] Sony Corp., supra note 22 at para. 39.
[37] SOCAN v CAIE (Tariff 22), [2004] SCC 45 at para. 123-124 [SOCAN].
[38] Ibid. at para. 92.
[39] Lessig, supra note 3 at 774.
[40] SOCAN, supra note 37 at para. 114.
[41] Litman, supra note 16 at 32.
[42] Ibid. at 21.
[43] Conrad Mewton, All You Need To Know About Music & The Internet Revolution (London: Sanctuary Publishing Ltd., 2001) at 52.
[44] Dan Tynan, The 25 Worst Tech Products of All Time, online: PCWorld <http://www.pcworld.com/article/125772-3/the_25_worst_tech_products_of_all_time.html>.
[45] Ibid.
[46] Ross Dannenberg, “Copyright Protection for Digitally Delivered Music: A Global Affair” (2006) 18 Intellectual Property & Technology Law Journal 12 at para. 9.
[47] Piasentin, supra note at 442.
[48] Russell McOrmond, Chronology of Canadian Copyright Law, online: Digital Copyright Canada <http://www.digital-copyright.ca/chronology>.
[49] Ibid.
[50] Ibid.
[51] Giuseppina D’Agostino, There is No Two Without Three: Bill C-32 is Dead, online: IP Osgoode <http://www.iposgoode.ca/2011/03/there-is-no-two-without-three-bill-c-32-is-dead/>.
[52] Ibid.
[53] Copyright Act, supra note 18 at s.29
[54] CCH, supra note 25 at 48.
[55] Bill C-32, An Act to amend the Copyright Act, 3rd Sess., 40th Parl., 2010, cl. 21-22 [Bill C-32].
[56] Bill C-32 Update: Canadian Content – Free Today, Gone Tomorrow, online: The Alliance of Canadian Cinema, Television and Radio Artists <http://www.actra.ca/main/press-releases/2010/11/bill-c-32-update-canadian-content-free-today-gone-tomorrow/>.
[57] Ibid.
[58] Preliminary Submission to The House of Commons Special Committee to Consider Bill C-32 An Act to Amend the Copyright Act, online: Society of Composers, Authors and Music Publishers of Canada <http://www.socan.ca/pdf/pub/Bill_C32_SOCANSubmission_EN.pdf> at para. 72-73.
[59] Piasentin, supra note 20 at 442.
[60] Re Private Copying 2008-2009, [2008] FCA 9 at para. 4.
[61] Bill C-32, supra note 55 at cl. 47.
[62] WIPO Copyright Treaty, online: World Intellectual Property Organization <http://www.wipo.int/treaties/en/ip/wct/trtdocs_wo033.html#P87_12240>. http://www.wipo.int/treaties/en/ShowResults.jsp?lang=en&treaty_id=16
[63] Ibid.
[64] Ibid.
[65] Bill C-32, supra note 55 at cl. 47.
[66] Michael Geist, The Canadian Copyright Bill: Flawed But Fixable, online: Michael Geist Blog <http://www.michaelgeist.ca/content/view/5080/125/>.
[67] Ibid.
[68] Lessig, supra note 3 at 773.
[69] Litman, supra note 16 at 9.
[70] Ibid. at 10.
[71] Kusek, supra note 1 at 7.
[72] Steve Gordon, The Future Of The Music Business: How To Succeed With New Digital Technologies, A Guide For Artists And Entrepreneurs (San Francisco: Backbeat Books, 2005) at 100.
[73] Ibid. at 94.
[74] Litman, supra note 16 at 9.
0 Responses to “Harmony and Dis-Chord: An Examination of Technology-Driven Transformations in the Music Industry with A View to Gauging Copyright Balance in Canada”