Mr. Clement, Loosen Those Digital Locks!

Copyright has long been viewed as one of the government's most difficult and least rewarding policy issues. It attracts passionate views from a wide range of stakeholders, including creators, consumers, businesses, and educators and it is the source of significant political pressure from the United States. Opinions are so polarized that legislative reform is seemingly always the last resort that only comes after months of delays.

The latest chapter in the Canadian copyright saga unfolded last week as Industry Minister Tony Clement and Canadian Heritage Minister James Moore tabled copyright reform legislation billed as providing both balance and a much-needed modernization of the law.

The bill will require careful study (suggestions that a quick set of summer hearings will provide an effective review should be summarily rejected) but the initial analysis is that there were some serious efforts to find compromise positions on many thorny copyright issues.

Unfortunately, the legal protection for digital locks -- unquestionably the biggest and most controversial digital copyright issue -- is the one area where there is no compromise. Despite a national copyright consultation that soundly rejected inflexible protections for digital locks on CDs, DVDs, e-books, and other devices, the government has caved to U.S. pressure and brought back rules that mirror those found in the United States. These rules limit more than just copying as they can also block Canadian consumers from even using products they have purchased.

Various compromises

Bill C-32, which ironically carries the same number as the last time Canada underwent major copyright reforms in 1997, features three types of provisions: sector-specific reforms, compromise provisions, and the no-compromise digital lock rules.

The sector-specific reforms are designed to address a single constituency or stakeholder concern. These reforms include something for almost everyone: new rights for performers and photographers, a new exception for Canadian broadcasters, new liability for BitTorrent search services, as well as the legalization of common consumer activities such as recording television shows and transferring songs from a CD to an iPod. In fact, there is even a "YouTube" user-generated content remix exception that grants Canadians the right to create remixed work for non-commercial purposes under certain circumstances.

There are a number of areas where the government has worked toward a genuine compromise. This includes reform to Canada's fair dealing provision, which establishes when copyrighted works may be used without permission.

The government rejected both pleas for no changes as well as arguments for a flexible fair dealing that would have opened the door to courts adding exceptions to the current fair dealing categories of research, private study, news reporting, criticism, and review. Instead, it identified some specific new exceptions that assist creators (parody and satire), educators (education exception, education Internet exception), and consumers (time shifting, format shifting, backup copies).

The Internet provider liability similarly represent a compromise, as the government is sticking with a "notice-and-notice" system that requires providers to forward allegations of infringement to subscribers. The system is costly for the providers, but has proven successful in discouraging infringement.

It also compromised on the statutory damages rules that create the risk of multi-million dollar liability for cases of non-commercial infringement. The new rules reduce non-commercial liability to a range of $100 to $5,000, which is not insignificant but well below the $20,000 per infringement cap currently found in the law.

Locked in place

All these attempts at balance should be welcomed, yet they are undermined by the no-compromise position on digital locks.

The foundational principle of the new bill is that anytime a digital lock is used, it trumps virtually all other rights. This means that both the existing fair dealing rights and Bill C-32's new rights all cease to function effectively so long as the rights holder places a digital lock on their content or device.

Moreover, the digital lock approach is not limited to fair dealing -- library provisions include a requirement for digital copies to self-destruct within five days and distance learning teaching provisions require the destruction of course materials 30 days after the course concludes.

The government could have introduced a compromise provision that would have allowed for compliance with international treaties, protection for digital locks and the preservation of the copyright balance. In failing to strike that balance, the government has introduced a flawed, but potentially fixable bill.