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### Viewing cable 05OTTAWA1168, Canadian Reaction to GOC's Proposed Copyright Law Amendments

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
05OTTAWA1168 | 2005-04-18 18:34 | 2011-04-28 00:00 | UNCLASSIFIED | Embassy Ottawa

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

` `

    UNCLAS SECTION 01 OF 03 OTTAWA 001168

    SIPDIS

    DEPT PASS USTR FOR CHANDLER AND ESPINEL
    4320/ITA/MAC/WH/ONIA/ for GWORD

    E.O. 12958: N/A
    TAGS: KIPR ETRD ECON CA
    SUBJECT: Canadian Reaction to GOC's Proposed Copyright Law Amendments

    REF: 04 OTTAWA 893

    ¶1.  (U) Summary:  On March 24th, GOC released its highly
    anticipated response to the 2002 Heritage Committee report on the
    need for copyright reform.  Many Canadian observers had hoped that
    the GOC's recent announcement would adequately address remaining
    IPR questions, but the government's goals for proposed legislation
    appear to fall short in key areas such as ISP liability and
    technological protection measure (TPM) circumvention: GOC is
    proposing 'notice and notice' rather than 'notice and takedown'
    and the proposed definition of TPM circumvention may require that
    rights holders prove the circumvention was with the intent to
    infringe.   Overall, however, Canadian stakeholders are unable to
    clearly judge the impacts of the proposed amendments because the
    legislative text is not available and the details of the
    legislation will be critical.  We expect renewed lobbying after
    the draft text of the legislation is available.  End Summary.

    --------------------------------------------- -------
    The Devil's in the details, and he won't hold still
    --------------------------------------------- -------
    ¶2. (U) We have spoken to a number of Canadian IPR stakeholders,
    including the Canadian Recording Industry Association, the
    Canadian Motion Picture Distributors Association, the Canadian
    Publishers Council, and the Entertainment Software Association to
    get their views on the substance of the GOC's announcement of
    intent to table broad legislation this spring to comply with WIPO
    obligations and address a number of other IPR issues.   The draft
    text of the legislation is not yet available, and Embassy contacts
    suggest that it may be a long time coming; one senior official
    suggested that the GOC will not table a draft before June.  All
    reactions to the proposed amendments thus far are based on three
    documents released by GOC in late March: a backgrounder, a
    statement, and a series of frequently asked questions.  These
    documents are often vague, and industry analysts fear that the
    devil may be in the details that have not yet been drafted.  For
    the GOC's full documentation on proposed amendments, see
    http://strategis.ic.gc.ca/epic/internet/incrp -
    prda.nsf/en/rp01140e.html.

    ¶3. (U) Even between the three released GOC documents, there are
    differences.  For example, the GOC's Backgrounder and FAQ clearly
    state that circumvention of TPM or alteration of rights management
    information (RMI) would constitute an infringement of copyright
    when done with intent to infringe, but the GOC's Statement seems
    to imply that 'enabling' infringement would also be illegal.
    Industry analysts who sought to clarify this difference have told
    us that they received contradictory answers depending on which
    agency they asked (Comment: Both Heritage Canada, which has
    traditionally supported IP rights holders, and Industry Canada,
    which tends to side more with free-use rights and promotion of new
    technologies, have responsibility for the content of this
    legislation, which will be drafted by Justice Canada.  Frustrated
    industry analysts have described the relationship between the two
    policy-making agencies as dysfunctional, with Industry holding de
    facto veto power and Heritage over-willing to compromise.  These
    observations are supported to some extent by Embassy experience
    with the agencies: at an IPR meeting hosted by the Embassy in
    December 2004, Heritage representatives seemed far more eager to
    move on the issue.  End comment.)

    --------------------------------------------- -
    Even hidden, the Devil scares rights holders
    --------------------------------------------- -
    ¶4. (U) What details can be found in the GOC's documents have
    rights holders associations alarmed.  Various interlocutors have
    mentioned two items in particular as particularly threatening to
    intellectual property rights:

    --Technological Protection Measures and Rights Management
    Information: The GOC's backgrounder and FAQ clearly imply that
    circumvention of TPM or alteration of rights management
    information would constitute an infringement of copyright only
    when done for infringing purposes.  Most analysts are reading this
    as a reversal of the U.S. standard of burden of proof: rights
    holders would have to prove that the circumvention or alteration
    was intended to infringe, just the action would not be enough. Our
    contacts were discouraged by the GOC's apparent reluctance to
    outlaw devices that have no conceivable legal purpose, such as
    adaptors that allow video game players to play pirated games.
    (Comment: this is somewhat akin to a homeowner having to prove
    that a burglar not only picked the lock, but did so with the
    intent to steal.  More than one analyst pointed out that this
    would represent a step back in Canadian law, since sections 351 to
    353 of the Criminal Code make it illegal to own breaking and
    entering tools, regardless of any proof of 'intent to infringe'.)
    As one interlocutor explained, if the rights holder has to prove
    infringement, this new language does not provide any new power to
    fight infringement assistance, since once infringement is proven,
    current law is sufficient to charge the infringer.  Another
    industry analyst bewailed the fact that this weakness in the law
    will mean that rights holders have no way of going after
    traffickers, but will be forced to continue suing users (as he put
    it: adding one more charge when the rights holder is stuck suing
    some kid is a PR nightmare.)

    ¶5. (U) Some rights holders associations are pinning their hope on
    a phrase in the GOC's `Statement', which added the concept that
    circumventing TPM or altering RMI would constitute an infringement
    if the person acted to "enable or facilitate circumvention".  This
    added phrase could cover the hacker who cracks RMI for fun and
    posts the information on the internet (that is, not profiting from
    the action but enabling others to profit.)  However, this phrase
    does not appear in the rest of the documentation (the Backgrounder
    or the FAQs), and industry analysts tell us that attempts at
    clarifying the situation with Canadian Heritage or Industry have
    been met with confusion.  Multiple industry reps mentioned that,
    without appropriate measures to counter trafficking, these
    amendments may not bring Canada into compliance with the WIPO
    treaties to which it is a signatory.  (Comment: more than one
    expert referred us to a book by Mihaly Ficsor called "The Law of
    Copyright and the Internet: The 1996 WIPO Treaties, Their
    Interpretation and Implementation", which provides a list of
    requirements to meet the WIPO treaties.  According to industry
    reps, Ficsor's argument suggests that the weakness of GOC's
    amendments with regards to traffickers means that these amendments
    will not bring Canada into compliance with the WIPO Performances
    and Phonograms Treaty (WPPT). End comment)

    Notice and Notice:  If I've told you once, I've...told you once
    --------------------------------------------- ------------------
    ¶6. (U) On the subject of notice and notice (as opposed to the
    preferred U.S. model of notice and takedown), industry opinions
    vary.  Although some stakeholders have described the GOC's intent
    to instigate notice and notice as a major flaw of the proposed
    copyright amendments, local industry reps have suggested to us
    that, although industry groups will lobby for notice and takedown,
    internet file-sharing may have moved past the point where notice
    and takedown was once critically important.  A year ago when
    Canada's supreme court issued a controversial decision describing
    peer-to-peer filesharing as legal, the filesharing profile of such
    programs as Napster involved large caches of files on individual
    websites; in this situation notice and takedown could prove
    beneficial in combating pirated downloads by requiring that ISPs
    remove these caches of files.  However, the current popularity of
    such programs as BitTorrent and Grokster, where files are
    fragmented and not centrally located, means that notice and
    takedown may not be an effective tool to combat illegal downloads.

    ¶7. (U) However, the proposed notice and notice model provides
    little benefit to rights holders beyond ensuring documentation of
    their complaints to ISPs (comment: the documentation of complaints
    is useful, however, and some industry analysts fear that ISPs will
    lobby to remove even that responsibility as onerous.  In addition,
    rights holders groups expressed concern at the GOC's open-ended
    statement that fees may be required to be paid by rights holders
    to ISPs for processing such notices.  End Comment.)  In discussing
    future lobbying options, one industry analyst explained that
    notice and notice could be helpful in combating peer-to-peer
    filesharing if the addition of a 'cease and desist' clause could
    be negotiated.  That is, if ISPs were required to give notice to
    an offending filesharer, that notice could include some reference
    to the fact that the user's internet activity was being monitored
    and, if infringement continued, the ISP would act to terminate the
    user's account.  This type of addition would amount to a 'repeat
    offender' clause under notice and notice.  The industry analyst
    mentioned that a best-case scenario would involve GOC's provision
    of statutory language for such notices, eliminating confusion
    among rights holders and taking some of the burden of public
    disapproval away from ISPs.

    As in music, timing is everything
    -----------------------------------
    ¶8. (U) Most analysts are withholding final judgment until they can
    see the actual draft legislation of the amendments.  However, the
    current political turmoil as Canada's minority government faces
    inquiry into a vast ethical scandal suggests that legislative
    language may not be available soon.  One industry analyst told us
    that, even optimistically, it would be an example of "blinding
    speed" if the bill was drafted before June.  If the opposition
    forces an election, this legislation is likely to fall behind.
    The development of this legislation was a major factor in
    decisions on Canada's Special 301 placement, and the Embassy
    recommended an out-of-cycle review to keep track of and encourage
    progress on the legislation.

    --------------------------------------
    A summary of the proposed amendments
    --------------------------------------
    ¶9. (U) WIPO treaty issues

    The proposed amendments that are intended to implement the WIPO
    treaties (as described by GOC) include:
    --clarifying the existing exclusive communication right of authors
    to include control over the making available of their material on
    the internet;
    --providing sound recording makers and performers with the right
    to control the making available right of their sound recordings
    and performances on the internet;
    --making the circumvention for infringing purposes of
    technological protection measures (TPMs) applied to copyright
    material an infringement of copyright;
    --making the alteration or removal of rights management
    information (RMI) embedded in copyright material (when done to
    further or conceal infringement) an infringement of copyright;
    --providing rights holders with the ability to control the first
    distribution of their material in tangible form;
    --making the term of protection for photographs the life of the
    photographer plus 50 years;
    --introducing a full reproduction right for performers in sound
    recordings;
    --modifying the term of protection provided to sound recording
    makers so as to extend to 50 years from the publication of the
    sound recording;
    --providing performers moral rights in their fixed and live
    performances.

    ¶10. (U) ISP Liability

    Proposed amendments concerning internet server provider (ISP)
    liability include:
    --making ISPs exempt from copyright liability in relation to their
    activities as intermediaries (comment:  one industry analyst
    worries that the phrasing of this exemption could be far too broad
    and might encourage the creation of small ISPs dedicated to
    hosting illegal copies but not-liable due to this part of the law.
    As with many reactions to the proposed amendments, much depends on
    the final phrasing of the legislative text.); and
    --establishing a "notice and notice" regime in relation to the
    hosting and file-sharing activities of an ISP's subscriber (that
    is, when an ISP receives notice from a rights holder that one of
    its subscribers is allegedly hosting or sharing infringing
    material, the ISP would be required to forward the notice to the
    subscriber and to keep a record of the relevant information for a
    specified time.)

    ¶11. (U) Conclusion:  The GOC's proposed amendments to the
    Copyright Act appear to fall short in key areas such as ISP
    liability and technological protection measure (TPM) circumvention
    and in fact may not be sufficient to bring Canada into compliance
    with the WIPO treaties.  Canadian stakeholders are as yet unable
    to judge the impact of the proposed amendments because the
    legislative text is not available.  We expect intense lobbying
    once the draft language is available if the draft text does not
    adequately address the questions of ISP liability and trafficking.
    Post is also watching upcoming court cases and GOC's deliberations
    on educational use of the internet (a question which was removed
    from the current proposed amendments so that the GOC can obtain
    further input on this contentious issue.)  Post will continue to
    work with stakeholders and GOC agencies to encourage legislation
    to bring Canada into compliance with the WIPO treaties.  End
    Conclusion.

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