Thursday, January 10, 2008

Private Copy Levy to be on Devices?

There is a lot of funky thought out there on the Canadian blogosphere and social groups.

I am going to say one thing: music should be worth the money you pay for it and yes, it should be paid for.

Somehow a solution to that problem is well overdue, and for once, I appear to agree with the CRIA on this: the base level in Canada for paid digital downloads is far too low, from known sources, to use growth statistics too much as a measure of success.

On the other hand, the creation of advertising models has arisen where for monthly sign-ins, you can have access to all the sound recordings you like, for "free". Or the rental model, where you are spared the advertising. The CRIA does not talk about these revenue streams.

But as far as agreeing on what caused the problem of the decline in CD sales, I think a fair conclusion is the decline by the big 4 music groups in artist development has to be part of the their problem. The rest of Canadian industry appears to be growing nicely.

That said, I wonder how many Canadians think that the Copyright Board of Canada is out of control and has erred in interpreting the Private Copy Levy as applicable to the iPod? Few know of the nuances I would argue, but hopefully that changes.

The Federal Court of Appeal has already said it had erred, and the Supreme Court of Canada turned down the appeal to that decision, with apparently no lesson learned by the Copyright Board.

The Copyright Board in I gather defiance of the Federal Court of Appeal and the Supreme Court of Canada, had hearings again, and now seems to think the CPCC still has a case, ruling at its Federal Court level, in their favour, again.

Since the decision was again appealed to the FCA, next up you would think would be the FCA on the matter. If it gets to opine again, will be interesting itself, for no doubt that court will be unhappy to see the same issue again, in perhaps a different cloth.

I suspect it won't have to make a decision.

And this just in: the FCA quashed / wiped out, the Copyright Board decision to assess a levy on the iPod.

With my sleeves up, not finding this elsewhere, we take a look at what is and is not in Section 80 (Part VIII) entitled "Where no Infringement of Copyright".

First up it refers to "audio recording medium" a term itself subject to regulation, that is defined in Section 79's "interpretation."

There is no "blank" in Section 80.

The law says with respect to infringing actions with respect to doing only one action:

80(1) ... Reproducing ... all or substantially all ...

(a) a musical work embodied in a sound recording,
(b) a performer’s performance of a musical work embodied in a sound recording, or
(c) a sound recording in which a musical work, or a performer’s performance of a musical work, is embodied

onto an audio recording medium for the private use of the person who makes the copy does not constitute an infringement of the copyright in the musical work, the performer’s performance or the sound recording.

It says if you do any of the acts in subsection 80(2),

(a) selling or renting out, or by way of trade exposing or offering for sale or rental;

(b) distributing, whether or not for the purpose of trade;

(c) communicating to the public by telecommunication; or

(d) performing, or causing to be performed, in public.

subsection 80(1) will not apply, restoring the rights of the copyright holder to otherwise have their infringement rights.

Combine (1) with good behavior at (2), and making a private copy of a), b) or c) will not be an act of infringement.

Pretty straightforward.

["distributing" appears to be from US Copyright law, said to be equivalent to publishing with 'or' thrown in where it is otherwise used once. This is entire other matter as the term is foreign to the rest of Canadian Copyright Act and has no "interpretation" given.]

For surrendering the right to infringement actions against those wily private users, those named in a), b) and c) get to collect a levy assessed on "blank audio recording medium," whatever by regulation, that is termed to include, "outside" of the statute itself.

The "Interpretations," Section 79 of Part VIII, state the helpful things here:

"audio recording medium"
«support audio »

"audio recording medium" means a recording medium, regardless of its material form, onto which a sound recording may be reproduced and that is of a kind ordinarily used by individual consumers for that purpose, excluding any prescribed kind of recording medium;

"blank audio recording medium"
«support audio vierge »

"blank audio recording medium" means

(a) an audio recording medium onto which no sounds have ever been fixed, and

(b) any other prescribed audio recording medium;

Right now, there are no regulations on that "audio recording medium," I can find in the regulations. The Governor in Council makes those according to the law, right there at Section 87(b)

The Governor in Council may make regulations

(b) prescribing anything that by this Part is to be prescribed;

Hunt yourself if you like:

Related Regulations

  1. Book Importation Regulations
  2. Certification of Countries Granting Equal Copyright Protection Notice
  3. Cinematographic Works (Right to Remuneration) Regulations
  4. Copyright Regulations
  5. Definition of "Wireless Transmission System" Regulations
  7. Definition of “Small Cable Transmission System” Regulations
  8. Educational Program, Work and Other Subject-matter Record-keeping Regulations
  9. Exceptions for Educational Institutions, Libraries, Archives and Museums Regulations
  10. Limitation of the Right to Equitable Remuneration of Certain Rome Convention Countries Statement
  11. Local Signal and Distant Signal Regulations
  12. Programming Undertaking Regulations
  13. Regulations Defining "Advertising Revenues"
  14. Regulations Establishing the Period Within Which Owners of Copyright not Represented by Collective Societies Can Claim Retransmission Royalties
  15. Regulations Prescribing Networks (Copyright Act)
Does then the Copyright Board have on plain reading the power of the Governor in Council, the Cabinet, to make such regulations to the Statute?

It says it has this mandate:
The Board is an economic regulatory body empowered to establish, either mandatorily or at the request of an interested party, the royalties to be paid for the use of copyrighted works, when the administration of such copyright is entrusted to a collective-administration society. The Board also has the right to supervise agreements between users and licensing bodies and issues licences when the copyright owner cannot be located.

Stay tuned. It should not. The Federal Court of Appeal already said that this was for Parliament to decide. And it said so again today.

Does the iPod fit the interpretation in law of a "blank audio recording medium"? Stay tuned. It should not. A device yes. A blank audio recording medium no. Ditto said in the same FCA case that the Supreme Court of Canada did not accept to hear on appeal (no big question to solve, no big legal error, nothing in the national interest beyond what was already stated ...).

So then if Parliament is silent, and the Cabinet and the relevant Ministers continually punt the issue, well, we have what is written, and that is it (I get to play the Supreme Court on my blog).

Should the Copyright Board of Canada act for Parliament and make its own regulations to the statute? I hope not. Not ever. If they had, honour they would voluntarily offer their resignations. Especially when the law on plain reading says the power to do so is solely in the Governor in Council's hands.

Can this happen all again? It is a living deja vu to the actors of the courts.

To this lay observer, this is as fine an instance of a regulatory vacuum pressing as hard as is legally possible to get filled, by all parties to this case.

In final analysis, it is caused by the absence of the Ministerial guidance to and a Cabinet decision on a suitable regulation, that one industry says it wants, in competition with other industries opposed to it.

As an innocent bystander, complicit now in knowledge, what is my position from this statutory law, not industry largess, if I rip a track to my computer from a CD I have purchased from HMV, and I do not do anything of 80(2)?

It would appear in law that I have the right to reproduce a sound recording on any audio recording medium, regardless of its material form, "that is of a kind ordinarily used by individual consumers for that purpose." To reproduce a sound recording on a credit card strip I gather might be unlawful but popular audio recording technology has moved on such that consumers ordinarily use hard drives, MP3 players, iPods, USB keys, and the like.

There is clearly no provision in Section 80 that anyone has to rip a track to a blank audio recording medium that a levy has been assessed on.

Case dismissed.

Has the right regulation maker here been slow? You bet.

It would be a very sorry day, if anyone would take any consumer to court for following in Canada Section 80 and the rest of Part VIII of the Canadian Copyright Act as is. With $200 million+ collected and counting by the CPCC, they know it, and the CRIA "gifted" also that they won't sue. Very generous gratuity for one who would lose in court on plain reading.

So enjoy your private copy rights. Somewhere along the way, you likely have paid extra for it under Canadian Copyright law. Stack of CD's, the odd CD-A by accident, other purchases totally unrelated to the recording of sound recordings. The law says that is the way it is.

[Aside: did you get your iPod refund from the last unsuccessful court case of the CPCC on this matter? A succinct statement of the first victory at is still available. These guys seem to be coming together again. ]

Now though comes the tougher political questions here.

The Conservatives did not say in their election platform but did say in their policies before the election they were going, at 35. iv)
"eliminate the levy on blank recording materials."
In their most recent Throne Speech they said they were going to "improve the protection of cultural and intellectual property rights in Canada, including copyright reform."

Is the Private Copy Levy going to be axed in its entirety or will the levy be assessed on something else for the rights at 80(1) in their policies?

The Record labels, foreign and domestic, as much as they are so 90's (70's if you are old enough), and so easily bashed now, if 80(1) is struck, do they have a right to some compensation with this stated also in the Conservative Election Platform:

Enshrining property rights in the Constitution

The plan

A Conservative government will:

• Propose an amendment to the Constitution to include the right to own property, as well as guarantee that no person shall be deprived of their just right without the due process of law and full, just, and timely compensation.

• Enact legislation to ensure that full, just, and timely compensation will be paid to all persons who are deprived of personal or private property as a result of any federal government initiative, policy, process, regulation, or legislation.
I know I don't like being associated with "pirates" as a willing music consumer who buys all their music, but I certainly don't want to be accused of being a "Bolshevik" which may be next by my nationality (taking something without compensation to whom it was taken from). What can the Harper Government give the composers, authors, publishers, performers, record labels and the CRIA members too, for their rights? A 100 million a year?

To me its the wrong slippery slope to go down in my opinion for some parties in this industry have little sympathy from me for not offering up quality downloads at a fair price, to push out inferior tempting, substitute goods, while suing little people in neighbouring countries, calling lawful people pirates, illusioning a customer as a thief, and pushing country representatives to fill nonsense into other countries leaders and its public mind.

In a weasel way [I better finish this post fast ;-)], I predict the Conservatives will scrap the levy on blank recording materials (sic) to keep their policy promises intact but choose instead a levy on blank audio recording devices, just as the CPCC is trying to do, but in the wrong forum.

To what would a shared folder be worth? Consider many have paid dearly for medium shifting, and revenue models based on advertising are developing fast with the voluntary consent of all parties, how could a proffered P2P levy work?

As a matter of fact, "I" would expect to pay big bucks for this right, more than an annual drivers licence , but there are other factors, like how many times do you pay for something you already appear to own? Or if you bought the LP, then the CD, and then the iPod version of your favourite album, why pay again, at all?

Copyright law is are about balance and this is very, very tricky. Markets are at stake, and new developing business models are at risk, along with the old ones that might fairly or not, appear to have dropped their own ball, appearing to create this problem in the first place.

In addition to how this boils out shortly, for what they might get from consumers in the future or the Government itself, why not offset some of whatever fair compensation is put out there, to a Canadian Recording Production Credit? Produce a recording in Canada with a Canadian artist, and get some of your development costs back? Make it generous.

I think some serious out of the box thinking is way overdue on this national matter for all lovers of culture, including music. Canadian music is just too important to let it down.

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