p2pnet.net News View:- Following on CRIA’s (Canadian Recording Industry Association) pledge not to sue consumers who copy their CDs onto iPods or computer hard drives [immediately below this post], my regular Law Bytes column reflects on the recent decision by the Canadian Supreme Court to let stand a ruling that upheld the legality of the Canadian private copying system but rejected an attempt to apply it to digital audio recorders such as the Apple iPod. The column argues that while in theory the private copying system provides consumers with the right to copy and artists with appropriate compensation for that copying, it is time to acknowledge that the system has failed and must be dramatically reformed or scrapped entirely.

In addition to the Supreme Court decision, I note that the Canadian government plans to further constrict the rights enjoyed by consumers under the private copying levy. Bill C-60, Canada’s copyright reform bill, includes a provision that allows the music industry to prohibit private copying on CDs that contain anti-copying technologies such as those used on the latest CD from the popular group Coldplay. This provision seemingly contradicts CRIA’s pledge in yesterday’s Star that it will take no legal action against consumers who legally acquire music and copy it to their hard drives or portable devices.

Should this provision become law, Canadians would pay tens of millions of dollars in levy fees, yet they would be precluded from copying their CDs onto their iPods or, in the case of “copy-controlled” CDs, making any private copies at all.

If that were not bad enough, the millions of dollars collected through the levy does not appear to be making its way to Canadian artists. Although the levy has generated more than $120 million over the past five years, Canadian Private Copying Collective (the administrator of the levy) has only distributed about 25 percent of those funds.

Industry Minister David Emerson and Canadian Heritage Minister Liza Frulla have indicated that the government plans later this year to consult on the future of private copying. With few remaining supporters, even one-time private copying champion CRIA welcomed the Supreme Court decision, change is urgently required.

One approach would be to expand the levy so that it better reflects current copying practices. Using the model of several European countries, the levy would grow in size, but so too would the rights of consumers to copy both audio and video for personal purposes. In fact, such an approach would provide the music industry with multiple revenue streams since it would collect the levy for peer-to-peer music file sharing, while also enjoying the benefits of a thriving commercial download market.

However, given the opposition to the levy system, the better alternative might be to simply drop it completely. In its place, Canada could adopt a “fair use” provision that would allow consumers to copy their own CD collection onto another device along with the elimination of statutory damages provisions for such copying cases. The fair use approach would match the U.S. model, where the recording industry has acknowledged that consumers have the right to copy their own CDs without reference to a private copying levy (and which CRIA seemed to acknowledge in its pledge yesterday).

There is no question that the introduction of the private copying system was intended to provide artists with compensation and consumers with legal certainty. It has done neither. The time has come to replace it with a fair use system that would be more equitable to all Canadians.

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The CRIA Pledge

Today’s Sunday Star contains an important letter to the editor from Graham Henderson, President of the Canadian Recording Industry Association. Responding to concern that the exculsion of the iPod from the private copying system would lead to liability for Canadians who copy their own CDs to their iPods, Henderson pledges on behalf of CRIA and its major member labels to refrain from taking action against such consumers, who he characterizes as the “good guys”. The full letter reads:

Recording Industry Won’t Target True Fans

Michael Geist has correctly drawn attention to the unintended consquence of last week’s Supreme Court of Canada ruling. It places people who legally acquire music and then copy it to their hard drives or portable devices in a legal grey zone. However, on behalf of the Canadian Recording Industry Association and its major label members, I can state that no action will be taken by CRIA against the “good guys.” People who legally acquire music are the artists’ best friends, and we do not intend to punish them.

This statement is certainly welcome news but raises several issues. First, we should be clear that the SCC decision addresses portable devices, not computer hard drives. The issue of copying to computer hard drives remains an open issue.

Second, while it is great that CRIA and its members have made this commitment, consumers are still not in the clear. Other rights holders in the same songs have not made a similar pledge and there accordingly remains the potential for liability.

Third, CRIA’s pledge calls into question its 15 years of lobbying for a private copying regime. If CRIA considers people who buy music and then make personal copies the “good guys”, why do we need the private copying system at all (more on this in my column tomorrow)?

Fourth, and most importantly, this pledge has important implications for Bill C-60. The government’s copyright reform package makes it an offence to circumvent a technological protection measure for the purposes of copyright infringement. There is one notable exception to this principle: private copying. In other words, someone who circumvents their store-bought CD for the purposes of private copying still commits an infringement under Bill C-60.

CRIA now characterizes this person as one of the “good guys” and has committed to not sue those that legally acquire music and make personal copies to their hard drives or iPods. It stands to reason that this principle should similarly apply to those that circumvent a TPM in order to make such a copy (for example, to copy the new Coldplay CD which contains anti-copying technology). CRIA and consumers appear to be on the same page on this issue, namely that consumers that purchase CDs should have the right to make personal copies to their other devices without fear of legal liability (nor further compensation). I would hope that we will see CRIA call on the government to drop this unnecessary exception to its circumvention package.

Michael Geist
[Geist is the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa. He can be reached by email at mgeist[at]uottawa.ca and is on-line at michaelgeist.ca.]

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