Steven Zuccarelli is a 2012 JD Candidate at Osgoode Hall Law School.

[Update: June 11, 2010, 8:41 am - the text below is an updated version of this blog post. Inadvertently an early draft was posted and we have replaced it with a corrected version.]

The recently introduced Copyright Modernization Act (Bill C-32) has been under a microscope for over a week now, and its impact on users’ rights and industry are slowly emerging.  While a complete analysis has yet to take place, some argue that it represents a fair attempt to balance the rights of users and copyright owners.  However, Bill C-32’s approach to Technological Protection Measures (TPMs), more commonly known as Digital Locks, has also attracted criticism since some suggest the provisions may negatively impact users’ rights. 

TPMs are software-derived lock mechanisms that are intended to protect the intellectual property of businesses that choose to distribute their work digitally.  Many consumers will recognize TPMs in the Digital Rights Management (DRM) context, where content providers such as Sony, Apple or Amazon have utilized techniques to limit the unauthorized use, copying or transcoding of music, films and eBooks (for an interesting read on how invasive and potentially dangerous DRM measures can be, see this article regarding the infamous Sony rootkit debacle).

With the ability to access or copy one’s media and goods at stake, it is possible to see how central TPMs are to consumers and businesses alike.  In fact, addressing TPMs is among the primary rationales the Government has put forth in modernizing the Copyright Act via Bill C-32 (See the Government’s rationales for the Bill here). According to officials, Bill C-32 seeks strong protection measures for TPMs since they are “…an important tool for creators and copyright owners to protect their work.  There are some business models that rely on digital locks to protect their investments. These industries need to have the protection of the law.”

Section 41.1(1)(a) of the proposed Act indicates that any circumvention of TPMs to access copyrighted works is prohibited, and will entitle a copyright owner to a remedy by way of injunction, damages or other methods against the person who circumvented the digital lock.   Bill C-32 would also institute penal sanctions, including a fine up to $1,000,000 or imprisonment for up to five years, however this is strictly limited to individuals or businesses who knowingly circumvent digital locks for commercial purposes (s. 42(3.1)).  In addition, s. 41.1(3) provides that a copyright owner may not elect to seek statutory damages when the circumvention of access controls was for private purposes.  As pointed out by Bob Tarantino here, “Absent the prospect of statutory damages, the likelihood of a rightsholder bringing an action for enforcement is radically reduced, since they’d be forced to expend enormous amounts of money to recover virtually nothing.”

The prohibitions would also be made subject to a number of exceptions, applicable where a prohibited act is committed for purposes of law enforcement or protection of national security, interoperability of computer programs, encryption research, verification as to whether a TPM permits the collection or communication of personal information, assessing or correcting security flaws, making a work or other subject-matter perceptible to a person with a perceptual disability, allowing a broadcasting undertaking to make an ephemeral reproduction, or gaining access to telecommunication services by means of a radio apparatus (sections 41.11-41.18).  It is also worth mentioning that the above list is not exhaustive.  The Government has provided a number of factors within the Bill that would guide the enactment of any subsequent exceptions created under regulations (s. 41.21(2)).  Interestingly, the factors outlined in the Bill have similarities to those outlined for assessing fair dealing in CCH Canadian Ltd. v. Law Society of Upper Canada.  Additionally, a provision allowing the creation of regulations to require a copyright owner to provide access to a particular work, if the need arises, has been included. 

While the list of exceptions may seem rather long, it is actually the appearance of a lack of exceptions that is attracting criticism for risking the balance between users’ and owners’ rights.  Organizations like the Business Coalition for Balanced Copyright, the Retail Council of Canada, the Association of Universities and Colleges of Canada (AUCC), and the Canadian Library Association (CLA) have acknowledged the great strides that Bill C-32 has made relative to its predecessor, Bill C-61 (please see Michael Geist’s comparison here).  However, as the CLA puts it, they are “disappointed that longstanding rights, the heart of copyright’s balance, as well as the new rights, are all tempered by the over-reach of digital locks.”  Specifically, these groups may be concerned with how private copying and fair dealing would be affected by the strength of the TPM provisions.  Upon first glance, these concerns seem reasonable.  If fair dealing and private copying were to be impacted by the TPM provisions, then an erosion of user rights would take place.  However, a close inspection of the Bill’s provisions demonstrates a careful attempt to maintain balance between users’ and owners’ rights.

As noted above, the awarding of damages is structured such that there is no significant incentive to pursue damages against an individual who circumvented access controls for private use.  Secondly, concerns that the Bill may impact fair dealing and private copying may be unfounded, as noted by James Gannon: “once you have legal access to a work, there is no provision in the new Bill that would prevent you from making use of the fair dealing copyright exceptions, digital lock or not”.

Herein lies an important distinction that the Bill makes.  As demonstrated by s. 41.1(1)(a)’s focus on circumventing TPMs to access works, it is this act of unauthorized access that risks the financial viability of copyright owners.  This demonstrates a tactical desire to target the greatest threat to a copyright owner’s IP, rather than impede a consumer’s use of legitimately purchased products.    

Besides strengthening the protection of the IP rights of copyright owners, another potential reason for introducing stronger protection for TPMs is to align Canadian copyright law with the U.S’s Digital Millennium Copyright Act or equivalent European provisions (as argued by Jonathan Fritz).  Canada has been singled out by the Obama administration in an official blacklist as a nation that does not protect intellectual property appropriately (see this article in the Globe & Mail).  Perhaps pressure from outside Canada is also motivating a modernization of Canada’s existing, and inadequate, Copyright Act.  Since both the U.S and many European nations have already implemented treaties signed via WIPO (World Intellectual Property Organization, a subsidiary branch of the UN), while Canada has not, there would be understandable pressure for Canada to adopt adequate IP-protecting measures.  Various industry groups like the Canadian Chamber of Commerce (CCC), the Canadian Independent Music Association (CIMA), the Canadian Recording Industry Association (CRIA), the Canadian Intellectual Property Council (CIPC) have expressed support for the adoption of such provisions to provide clearer and stronger rules in the digital environment.

Bill C-32 shows promise by legislating fair dealing and private copying measures.  However, it is clear that its treatment of TPMs may be a contentious issue.  On the one hand, Canada must demonstrate a commitment to the protection of owners’ rights on an international scale, to encourage increased investments in and access to innovative copyrighted digital works and related services.  On the other hand, it is also critically important to recognize that copyright provisions should not unnecessarily impede the consumption and legitimate use of digital products.  By removing the option of statutory damages when the circumvention of access controls was for private purposes and by allowing private copying and fair dealing to function in light of TPMs, it is fair to suggest that Bill C-32 is attempting to strike a balance.

Posted in Copyright, copyright reform, Digital Locks, IP