Sookman federal circuit_internet_and_copyright_

McCarthy Tétrault LLP / mccarthy.caMcCarthy Tétrault LLP / mccarthy.ca
Significant Recent Developments:
Internet and Copyright
Trade and Intellectual Property
Issues in Global Recovery
Economies: Best Practices
Barry B. Sookman
bsookman@mccarthy.ca
416-601-7949 September 17, 2013

McCarthy Tétrault LLP / mccarthy.ca
¬ Canada has same challenges as U.S. in grappling with
digital/internet copyright issues.
¬ Similar technological capabilities and services, though
Canada often lags the U.S.
¬ Canada is a member or contracting party to key copyright
conventions and treaties including Berne Convention,
Rome Convention, and WIPO Internet Treaties (Canada is
in process of ratifying the WIPO Treaties)
¬ No SOPA/PIPA.
¬ Canada’s legislative and judicial approaches to copyright
have differences.
Introduction

¬ Federal government has constitutional jurisdiction
over copyrights.
¬ Courts had never developed any copyright pre-
emotion doctrine until Reference re Broadcasting
Regulatory Policy CRTC 2010 167, 2012 SCC 68
¬ S.89: “No person is entitled to copyright otherwise
than under and in accordance with this Act or any
other Act of Parliament, but nothing in this section
shall be construed as abrogating any right or
jurisdiction in respect of a breach of trust or
confidence.”
Introduction (Cont’d.)

¬ Very significant recent developments in copyright in
Canada. Copyright Modernization Act proclaimed in force
November 2012, after failure of Bill C-60 (2005), C-61
(2008), C-32 (2010).
¬ Since 1997 there had been 12 government,
department, and committee reports making
recommendations for reform to address digital issues.
¬ Canada’s international reputation had suffered
¬ EU, Assessing the Costs and Benefits of a Closer EU-
Canada Partnership: A Joint Study by the European Union
and the Government of Canada, October 2008
¬ USTR, Special 301 Reports
Introduction (Cont’d.)

Legislative Developments: Pre-CMA to
Address Digital Issues
Tools to Address
Digital Piracy
Status Trading Partners Status Canada
WIPO- protect TPMs G20 strong protection against circumvention of TPMs and trafficking in tools used for
circumvention
n/a
WIPO-making available
right
G20 all have enacted right; used in EU against Pirate Bay, Newzbin and other sites. n/a
WIPO-protect rights
management
information
G20 all have enacted right n/a
Notice and takedown • De facto standard in the EU and other countries that permit service providers to rely
on hosting exceptions only if they remove or disable access to infringing content when
they have knowledge of infringement.
• Finland, Iceland, Australia, Singapore, U.S.: formal notice and counter-notice system
n/a
Notice and notice
backed up by a
graduated response
system
• Enacted in Taiwan, South Korea and Japan (cell phones)
• N.Z. and France
• U.S/Australia: ISPs must have and implement a policy to terminate accounts of repeat
infringers
n/a
Accessorial
(secondary) liability
• EU- e.g. France, Germany, Netherlands, Finland: strong laws which impose liability if
intermediaries do not take effective and appropriate measures to combat infringement.
• Australia-expanded authorization (examines (i) if there is power to prevent
infringement and (ii) reasonable steps were taken to prevent or avoid it).
•U.S.-liability based on (i) inducement, (ii) contributory liability (actual or constructive
knowledge and materially contributing to infringement); or (iii) vicariously liability
(profiting from direct infringement while declining to exercise a right to stop or limit
it).
Accessorial liability potentially
to (i) inducement, and (ii)
acting in concert.
Ability to obtain
injunctive relief
against intermediary
• EU Copyright Directive Article 8(3)
• U.S. DMCA (more limited)
n/a
Service provider safe
harbors
• EU e-Commerce Directive
• U.S. DMCA
n/a

Legislative Developments: CMA
¬ WIPO: making available right, distribution right, and TPMs
¬ Enablement
¬ Exceptions for ISPs
¬ New private use exceptions
¬ Format shifting exception
¬ Time shifting exception
¬ User generated content exception
¬ Back-up copies
¬ New fair dealing exceptions for parody, satire, and education
¬ Statutory damages
¬ Other new exceptions
¬ Computer program interoperability
¬ Encryption research
¬ Computer and network security assessment
¬ Temporary reproductions for technological processes

The CMA TPM Provisions Compared to the US
and EU Provisions
Country
Act of
Circumvention
- Access
Control
Technological
Measure
Act of
Circumvention-
Copyright
Control
Technological
Measure
Circumvention
Tools- Access
Control
Technological
Measure
Circumvention
Tools-
Copyright
Control
Technological
Measure
Criminal
Sanctions
United
States
Prohibited
(§ 1201 (a)(1))
Not prohibited
(by DMCA)
Prohibited
(§ 1201(a)(2))
Prohibited
(§ 1201(b))
§1204
EU
Copyright
Directive
Prohibited
(Art. 6(3); Art.
6(1))
Prohibited
(Art. 6(3); Art.
6(1))
Prohibited
(Art. 6(3); Art.
6(2))
Prohibited
(Art. 6(3), Art.
6(2))
Remedies must
be “effective,
proportionate and
dissuasive”.
(Art.8)
Canada Prohibited Not Prohibited Prohibited Prohibited
Criminal
sanctions in
Commercial
Cases

Enablement
27(2.3) It is an infringement of copyright
for a person, by means of the Internet
or another digital network, to provide a
service primarily for the purpose of
enabling acts of copyright infringement
if an actual infringement of copyright
occurs by means of the Internet or
another digital network as a result of the
use of that service.
27(2.4) In determining whether a person has infringed copyright under
subsection (2.3), the court may consider
(a) whether the person expressly or implicitly marketed or promoted the
service as one that could be used to enable acts of copyright infringement;
(b) whether the person had knowledge that the service was used to enable
a significant number of acts of copyright infringement;
(c) whether the service has significant uses other than to enable acts of
copyright infringement;
(d) the person’s ability, as part of providing the service, to limit acts of
copyright infringement, and any action taken by the person to do so;
(e) any benefits the person received as a result of enabling the acts of
copyright infringement; and
(f) the economic viability of the provision of the service if it were not used to
enable acts of copyright infringement.
Industry Canada Fact Sheet: “The Copyright Modernization Act sends a clear message that copyright
infringement is unacceptable. It recognizes that the most effective way to stop online copyright infringement
is to target those who enable and profit from the infringements of others. By allowing copyright owners to
pursue these "enablers", such as illegal peer-to-peer file sharing sites, this bill supports the development of
significant legitimate markets for downloading and streaming in Canada. This supplements existing criminal
punishments for those who aid and abet infringement.”

Safe Harbors for ISPs
CMA has four safe harbors for ISPs:
1. A network services exception (ss. 31.1(1))
2. A caching exception (ss. 31.1(2))
3. A hosting services exception (ss. 31.1(4))
4. An exception for information location tools (search engines)
(ss. 41.27)
• No notice and takedown; but “notice and notice” system (not
in force yet)
• The network services, hosting, and ILT exceptions are
broad but do not apply if the service provider is liable for
enablement. Veoh, YouTube, and isoHunt cases?

Format Shifting (s.29.22)
Industry Canada FAQ: “The bill will allow "format shifting." Consumers will be able to copy legally
acquired music onto devices that they own, provided that it is for private, non-commercial purposes
and does not break a digital lock.
29.22 (1) It is not an infringement of copyright for an
individual to reproduce a work or other subject-matter or
any substantial part of a work or other subject-matter if
(a) the copy of the work or other subject-matter from
which the reproduction is made is not an infringing copy;
(b) the individual legally obtained the copy of the work or
other subject-matter from which the reproduction is
made, other than by borrowing it or renting it, and owns
or is authorized to use the medium or device on which it
is reproduced;
(c) the individual, in order to make the reproduction, did
not circumvent, as defined in section 41, a technological
protection measure, as defined in that section, or cause
one to be circumvented;
(d) the individual does not give the reproduction away;
and
(e) the reproduction is used only for the individual’s
private purposes.
(2) For the purposes of paragraph (1)(b), a
“medium or device” includes digital memory in
which a work or subject-matter may be stored for
the purpose of allowing the telecommunication of
the work or other subject-matter through the
Internet or other digital network.
(4) Subsection (1) does not apply if the individual
gives away, rents or sells the copy of the work or
other subject-matter from which the reproduction
is made without first destroying all reproductions
of that copy that the individual has made under
that subsection.

Time shifting (s.29.23)
Industry Canada FAQ: “This bill will allow Canadians to "time shift," or record television, radio or
Internet broadcasts, provided that it is done for private, non-commercial purposes. This bill does not
restrict the types of devices and formats that can be used, making this exception technologically
neutral.”
29.23 (1) It is not an infringement of copyright for an
individual to fix a communication signal, to reproduce a work
or sound recording that is being broadcast or to fix or
reproduce a performer’s performance that is being broadcast,
in order to record a program for the purpose of listening to or
viewing it later, if
(a) the individual receives the program legally;
(b) the individual, in order to record the program, did not
circumvent, as defined in section 41, a technological
protection measure, as defined in that section, or cause one
to be circumvented;
(c) the individual makes no more than one recording of the
program;
(d) the individual keeps the recording no longer than is
reasonably necessary in order to listen to or view the program
at a more convenient time;
(e) the individual does not give the recording away; and
(f) the recording is used only for the individual’s private
purposes.
(2) Subsection (1) does not apply if the individual
receives the work, performer’s performance or
sound recording under an on-demand service.
(3) The following definitions apply in this section.
“broadcast” means any transmission of a work or
other subject-matter by telecommunication for
reception by the public, but does not include a
transmission that is made solely for performance in
public.
“on-demand service” means a service that allows a
person to receive works, performer’s performances
and sound recordings at times of their choosing.
* Can an individual stream or make a copy for
viewing on mobile devices?

User Generated Content (UGC)
Industry Canada Fact Sheet: “The new bill permits the use of legitimately acquired material in user-
generated content created for non-commercial purposes. This applies only to creations that do not affect
the market for the original material. Examples include making a home video of a friend or family member
dancing to a popular song and posting it online, or creating a "mash-up" of video clips.”
29.21(1) It is not an infringement of
copyright for an individual to use an existing
work or other subject-matter or copy of one,
which has been published or otherwise
made available to the public, in the creation
of a new work or other subject-matter in
which copyright subsists and for the
individual — or, with the individual’s
authorization, a member of their household
— to use the new work or other subject-
matter or to authorize an intermediary to
disseminate it, if
(a) the use of, or the authorization to
disseminate, the new work or other subject-
matter is done solely for non-commercial
purposes;
(b) the source — and, if given in the source, the name of
the author, performer, maker or broadcaster — of the
existing work or other subject-matter or copy of it are
mentioned, if it is reasonable in the circumstances to do
so;
(c) the individual had reasonable grounds to believe that
the existing work or other subject-matter or copy of it, as
the case may be, was not infringing copyright; and
(d) the use of, or the authorization to disseminate, the
new work or other subject-matter does not have a
substantial adverse effect, financial or otherwise, on the
exploitation or potential exploitation of the existing work
or other subject-matter — or copy of it — or on an
existing or potential market for it, including that the new
work or other subject-matter is not a substitute for the
existing one.

Other Legislative Developments
¬ 2013 Special 301 Report:
¬ “USTR is moving Canada to the Watch List in 2013. In June 2012, the United
States welcomed the passage of the Copyright Modernization Act, which,
among other things, is designed to implement Canada’s obligations under the
WIPO Internet Treaties and to address the challenges of copyright piracy in the
digital age. In March 2013, Canada also introduced the Combating
Counterfeit Products Act to strengthen IPR enforcement, which included
provisions that would provide ex officio authority to Canadian customs
officials to seize pirated and counterfeit goods at the border. The United
States supports Canada’s commitment to address the serious problem of
pirated and counterfeit goods entering our highly integrated supply chains and
urges Canada to expand the legislation to also provide authority for its customs
officials to take action against goods in-transit…The United States looks
forward to continuing its close cooperation with Canada on IPR issues,
including through the TPP negotiations.”

Judicial Developments
¬ ESA v. SOCAN, 2012 SCC 34
¬ Rogers Communications Inc. v. SOCAN, 2012 SCC 35
¬ SOCAN v. Bell Canada, 2012 SCC 36
¬ Alberta (Education) v. Canadian Copyright Licensing Agency (Access Co
, 2012 SCC 37
¬ Re:Sound v. Motion Picture Theatre Associations of Canada,
2012 SCC 38
¬ Reference re Broadcasting Regulatory Policy CRTC 2010 167,
2012 SCC 68
¬ Izard, et al. v. Claude Robinson, Supreme Court of Canada case
34468

Judicial Perspectives – U.S.
¬ Eldred v. Ashcroft, 537 US 186 per Ginsburg J.,
¬ “As we have explained, "[t]he economic philosophy behind the [Copyright]
[C]lause ... is the conviction that encouragement of individual effort by personal
gain is the best way to advance public welfare through the talents of authors
and inventors." Mazer v. Stein, 347 U.S. 201, 219 (1954). Accordingly,
"copyright law celebrates the profit motive, recognizing that the incentive to
profit from the exploitation of copyrights will redound to the public benefit by
resulting in the proliferation of knowledge.... The profit motive is the engine that
ensures the progress of science.“…Rewarding authors for their creative labor
and "promot[ing] ... Progress" are thus complementary; as James Madison
observed, in copyright "[t]he public good fully coincides . . . with the claims of
individuals.“…JUSTICE BREYER's assertion that "copyright statutes must
serve public, not private, ends,"post, at 247, similarly misses the mark. The two
ends are not mutually exclusive; copyright law serves public ends by providing
individuals with an incentive to pursue private ones.”

Judicial Perspectives - Canada
¬ “Théberge reflected a move away from an earlier, author-centric
view which focused on the exclusive right of authors and copyright
owners to control how their works were used in the marketplace:
see e.g. Bishop v. Stevens, [1990] 2 S.C.R. 467, at pp. 478-79.
Under this former framework, any benefit the public might derive
from the copyright system was only “a fortunate by-product of
private entitlement”…
¬ “Théberge focused attention instead on the importance copyright
plays in promoting the public interest, and emphasized that the
dissemination of artistic works is central to developing a robustly
cultured and intellectual public domain. As noted by Professor
David Vaver, both protection and access must be sensitively
balanced in order to achieve this goal: Intellectual Property Law:
Copyright, Patents, Trade-marks (2nd ed. 2011), at p. 60.”

Judicial Perspectives - Canada
¬ “CCH confirmed that users’ rights are an essential part of
furthering the public interest objectives of the Copyright Act. One
of the tools employed to achieve the proper balance between
protection and access in the Act is the concept of fair dealing,
which allows users to engage in some activities that might
otherwise amount to copyright infringement. In order to maintain
the proper balance between these interests, the fair dealing
provision “must not be interpreted restrictively”: CCH, at para. 48.”

¬ Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F. 3d
121(2nd
Cir. 2008)
¬ WNET, Thirteen v. Aereo, Inc 2013 WL 1285591 (2nd
.Cir.Apr, 1,
2013), affirming
American Broadcasting Companies v. Aereo, Inc., 874 F. Supp.
2d 373 (S.D.N.Y.2012)
¬ WNET, Thirteen v. Aereo, Inc., Nos. 12-2786, 12-2807, F.3d _,
2013 WL 3657978 (2d Cir. July 16, 2013) (denying rehearing en
banc)
¬ Fox Television Stations, Inc. v. BarryDriller Content Systems,
PLC 2012 WL 6784498 (C.D.Cal.,Dec. 27, 2012)
¬ Fox Television Stations, Inc. v Filmon X LLC (D.D.C. Sep 5,
2013)
¬ United States v. American Society of Composers, Authors and
Publishers, 627 F.3d 64 (2d Cir. 2010)
Judicial Developments – U.S. –Public
Performance

Rogers Communications Inc. v. SOCAN, 2012 SCC 35
“Focusing on each individual transmission loses sight of
the true character of the communication activity in
question and makes copyright protection dependant on
technicalities of the alleged infringer’s chosen method of
operation. Such an approach does not allow for principled
copyright protection. Instead, it is necessary to consider
the broader context to determine whether a given point-to-
point transmission engages the exclusive right to
communicate to the public. This is the only way to ensure
that form does not prevail over substance.”
Judicial Developments – Canada

ESA v. SOCAN, 2012 SCC 34
“…the right to “communicate” is historically connected to the right to
perform a work and not the right to reproduce permanent copies of the
work…
The right to perform historically presupposed a live audience that would
be present at the site where the performance took place…
we agree with Rothstein J. (at para. 98) that there is a “historic
relationship” between the performance right and the communication
right in the Copyright Act, but we disagree with his conclusion that
Parliament intended to sever this relationship based on the 1988
amendments. In our view, this historical connection between
communication and performance still exists today.”
¬ Did the amendments in the CMA change the law to create a
technologically neutral making available right? The Copyright Board
Tariff 22 proceeding is considering the issue.
Judicial Developments – Canada

¬ Canada and U.S. face same challenges in dealing with
technological developments and in providing incentives for
creative industries.
¬ U.S. and Canada have taken different legislative
approaches to dealing with technological changes.
¬ U.S. and Canada judicial approaches also diverge.
Conclusion

McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 12561273
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