Experts call for sweeping review of Copyright Board

The Conservative government should launch a major review of the Copyright Board of Canada, looking at its role and mandate as new technologies change the distribution of copyrighted works, experts said. In interviews with The Wire Report, Carys Craig, an associate professor at York University’s Osgoode Hall Law School, Ariel Katz, an associate professor in the faculty of law at the University of Toronto, and Howard Knopf, a copyright lawyer with Macera & Jarzyna, LLP in Ottawa, criticized the Copyright Board and said they support a review. Katz and Craig said the board is acting too much in the interests of copyright owners, represented by copyright collectives. They said the regulator is failing to balance those interests with users’ rights, as new digital distribution systems continue to evolve, while Knopf said costs that the collectives impose on Canadians reach hundreds of millions of dollars per year. “I agree that the board is ripe for review, in terms of its role in the copyright system, the power it has to shape the copyright landscape in Canada, and the internal processes by which it operates,” Craig said in an interview. She said any review should consider encouraging more public involvement in the Copyright Board’s proceedings, as the CRTC is doing. “It’s not conducting proceedings in a way that a court would have to. It’s essentially beginning with an order, which is the collective societies’ highest bid, and then forcing interveners and objectors to participate in a long, drawn-out, burdensome process,” Craig said. Others have made similar calls for change. In a column last spring, Michael Geist, the Canada research chair of Internet and e-commerce law at the University of Ottawa, urged a government review of the Copyright Board, in which he said the Copyright Board is “broken.” The board, which has the legal authority of a court and establishes the royalties, or tariffs, that companies and other users must pay to distribute and reproduce copyrighted works, has been criticized in the past for holding long, drawn-out proceedings, lasting years. Katz said the calls for a review are “long overdue,” and that it could take the form of a formal commission led by a judge. Any review should also involve the Competition Bureau, he said. The Copyright Board, over time, has protected “monopolies” of copyright societies and their members, Katz said, who do not have to “compete” with one another for licensing deals with distributors and users. The board “has become captured by those who are supposed to be regulated,” Katz said. “Instead of protecting the public from the monopolies that the board is supposed to regulate, the board, over time, identifies itself with those monopolies and gradually perceives its role as serving the monopolies.” In the U.S., he said, Apple Inc. negotiates directly with music recording labels for the rights to put music on iTunes, without the need for copyright collectives or a regulator. He said the Copyright Board’s processes may also be causing barriers to entry. Companies offering services like Hulu, Pandora or Google Music in the U.S. would face the Copyright Board’s discovery process and the involvement of objectors. Geist, in his column in May published in the Toronto Star and on his blog, said the government should take a look at a “board that is largely inaccessible to the public and content to craft its own view of copyright regardless of what the government legislates or the Supreme Court says.” He added: “he public rarely participates in its activities due to high costs, it moves painfully slowly by only issuing a handful of decisions each year, and its rules encourage copyright collectives and users to establish extreme positions that make market-driven settlements more difficult.” Knopf, who has acted as counsel in Copyright Board proceedings, said by email that he would support a copyright commission, like the Parker Commission held in the 1930s, to revisit Canada’s copyright collective system and its oversight. He said Canada has more copyright collectives and a larger copyright tribunal than any other country, and that costs imposed by collectives on Canadians and copyright users are in the neighbourhood of $500 million a year. They range from a so-called “wedding tax” on playing music at weddings and events to tariffs on the education system and blank CD levies, Knopf said. “The cost of hearings before the Copyright Board is enormous and now often goes into seven figures, even for objectors,” Knopf said. “The process takes years, the decisions are invariably retroactive and are often reversed. In all of this, economic efficiency and the public interest are getting lost.” Still, Knopf said that, given today’s “climate of copyright fatigue and fiscal restraint,” a major commission may not be feasible in the short term, and suggested some faster action could be taken through the regulatory powers under the Copyright Act. Regulations could address a host of issues, including the Copyright Board’s timelines for hearings and decisions, and under what circumstances it can issue retroactive or interim tariffs, he said. Gilles Mcdougall, secretary general of the Copyright Board, said in a phone interview that a review would be an opportunity to look at improvements to its processes. Mcdougall said the board is doing that now with an internal working group that regularly reviews issues such as procedures, rules and practices. The Copyright Board, as an arm’s length regulator, is looked to internationally for best practices, he added. “We have to make sure that our processes are fair for everybody, not just one particular group,” Mcdougall said. Mcdougall said public participation in board proceedings would not make sense in most cases because those hearings are discussions between rights holders and a business or company that wants to use music or other copyrighted works. The so-called wedding tariff applies to hotels and venues hosting weddings, not on the people getting married, he said. “You have users of a tariff, or the potential users of a tariff, that can participate, not the general public. The general public can attend, but it’s usually quite boring for most of the public,” Mcdougall said. “It’s like saying the public doesn’t participate in a Federal Court of Appeal hearing. Of course they don’t participate, because they don’t really belong there, per se.” Gilles Daigle, general counsel and head of legal services at SOCAN, a performing rights copyright collective, said in an emailed statement that there is “a troubling trend that appears to increasingly favour major corporate interests over the Canadian creative economy,” and that “it’s essential to preserve the Copyright Board’s essential role in balancing the rights of all stakeholders in the digital music ecosystem.” Daigle said SOCAN and other music rights collectives around the world provide businesses that use music with cost savings through “instantaneous access to all music,” adding that copyright collectives create efficiencies in enforcement and monitoring. “The Copyright Board of Canada is the best available avenue to ensure that digital music businesses can thrive, consumers can access all the music they want, and songwriters can receive fair compensation for the use of their music. These issues are most complex and require the expertise of a specialized tribunal for proper consideration and determination,” Daigle said. As part of a public hearing in November, informally known as the Tariff 22 hearing and which will consider tariffs for online music services, the Copyright Board is looking at whether the Copyright Act's new “making available right” extends SOCAN's performance right and whether it may be applied to streaming or download music services. The Supreme Court's decision in Entertainment Software Association v. SOCAN, issued in summer last year, struck down that right, saying music rightsholders cannot charge performance royalties from online download services like iTunes. The decision was part of five Supreme Court decisions on copyright issued the same day, and which resulted from appeals of Copyright Board decisions. In the decisions, the court emphasized technological neutrality and expressed concern about the layering of different types of copyrights on one work. Craig said the Copyright Board’s Tariff 22 hearing should consider the context of the Supreme Court’s decisions. “It spoke clearly about royalty stacking, double dipping, and so on,” Craig said. Last year, the Conservative government introduced regulations to exempt microSD memory cards from a possible copyright levy for music copying, saying at the time any new fees on memory cards would not be in line with growing the country's digital economy. —With reporting by Simon Doyle at sdoyle@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca --- CORRECTION: An earlier version of this story incorrectly attributed some general comments in the third paragraph to Knopf.

Experts call for sweeping review of Copyright Board

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