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The Canadian DMCA: Check the Fine Print

Thursday June 12, 2008

As expected, the Canadian DMCA is big, complicated, and a close model of the U.S. Digital Millennium Copyright Act (Industry Canada provides a large number of fact sheets here). I'll have much more to say once I've had a careful read, but these are my five key points to take away:

1. As expected, Prentice has provided a series of attention-grabbing provisions to consumers including time shifting, private copying of music (transfering a song to your iPod), and format shifting (changing format from analog to digital). These are good provisions that did not exist in the delayed December bill. However, check the fine print since the rules are subject to a host of strict limitations and, more importantly, undermined by the digital lock provisions. The effect of the digital lock provisions is to render these rights virtually meaningless in the digital environment because anything that is locked down (ie. copy-controlled CD, no-copy mandate on a digital television broadcast) cannot be copied. As for every day activities like transferring a DVD to your iPod - those are infringing too. Indeed, the law makes it an infringement to circumvent the locks for these purposes.

2. The digital lock provisions are worse than the DMCA. Yes - worse. The law creates a blanket prohibition on circumvention with very limited exceptions and creates a ban against distributing the tools that can be used to circumvent. While Prentice could have adopted a more balanced approach (as New Zealand and Canada's Bill C-60 did), the effect of these provisions will be to make Canadians infringers for a host of activities that are common today including watching out-of-region-coded DVDs, copying and pasting materials from a DRM'd book, or even unlocking a cellphone. The liability for picking the digital lock is up to $20,000 per infringement.

While that is the similar to the U.S. law, the exceptions are worse. The Canadian law includes a few limited exceptions for privacy, encryption research, interoperable computer programs, people with sight disabilities, and security, yet Canadians can't actually use these exceptions since the tools needed to pick the digital lock in order to protect their privacy are banned. In other words, check the fine print again - you can protect your privacy but the tools to do so are now illegal. Dig deeper and it gets worse. Under the U.S. law, there is mandatory review process every three years to identify new exceptions. Under the Canadian law, its up to the government to introduce new exceptions if it thinks it is needed. Overall, these anti-circumvention provisions go far beyond what is needed to comply with the WIPO Internet treaties and represents an astonishing abdication of the principles of copyright balance that have guided Canadian policy for many years.

3. The other headline grabber is the $500 fine for private use infringement. This will be heralded as a reasonable compromise, but check the fine print. Canadian law already allows a court to order damages below $500 per infringement, so the change may not be as dramatic as expected. Moreover, the $500 fine may well be offset by the new sources of much larger liability as Canadians face $20,000 per infringement for transferring music from a copy-protected CD to their iPod. Finally, it is already arguably legal to download sound recordings in Canada. Under the proposal, there are exceptions for uploading or posting music online (ie. making available) and even the suggestion that posting a copyright-protected work to YouTube could result in the larger $20,000 per infringement damage award.

4. The ISP provisions are precisely as expected with a statutory notice-and-notice system. However, check the fine print. The role of the ISP may be undermined by the Anti-Counterfeiting Trade Agreement, which the government trumpets in its press release.

5. The education community received several provisions that are largely gutted by the fine print. For example, library materials can be distributed in electronic form, but must not extend beyond five days. In other words, it turns librarians into locksmiths. Moreover, there is an Internet exception that educators wanted but it does not apply for any works that are either password protected or include a notification that they cannot be used. In other words, online materials that are available under a Creative Commons license are fair game (as they are already), but most everything else is still potentially subject to a restriction. This was precisely what many feared - rather than pursuing the far superior expansion of fair dealing, the education community got a provision that does little to enhance classroom learning.

I'll have more to say soon, but the takeaway is that the DMCA provisions are worse than the U.S. and the consumer exceptions riddled with limitations as the government promotes a strategy of locking down content and launching lawsuits against Internet users.