It's A Go: Copyright Review Hearings Set For 2018

By David Farrell

In one of its last votes before their Christmas recess, the House of Commons passed a motion Wednesday to initiate the mandatory five-year review of the Copyright Act. The Standing Committee on Industry, Science and Technology in 2018 will host the hearings.

The purpose of the Industry Committee reassessment is to update the Copyright Modernization Act (CMA) of 2012, successfully pushed through Parliament by Stephen Harper’s then-majority Conservative government.

How long the process will take is anyone’s guess, and the menu of debatable options to be considered is long. The stakeholders stack in two piles: big business, and creative artist collectives. In the first is anyone who relies on the use of music as part of their business activity. In the other, an alphabet soup of collectives with indecipherable acronyms that fall into three distinct bodies: Re: Sound, SOCAN and CMRRA.

The first, Re: Sound, collects neighbouring rights royalties on behalf of the creative teams embedded in recordings and the affiliated sound-recording (record) companies; SOCAN is the umbrella collective for songwriters, composers and music publishers; and the CMRRA is the the music licensing collective which issues licences to individuals or organizations for the reproduction of songs on various media.

In 2016, Re:Sound and SOCAN combined collected $305M in domestic royalty income. Up for discussion in the 2018 review is normalizing Canada’s music streaming tariff to bring it in line with other jurisdictions, and abolishing the $1.25M revenue exemption on royalty payments that radio broadcasters currently enjoy. According to the most recent CRTC Communications Monitoring Report, there are 546 all-language commercial FM stations licensed in Canada. Change the exemption, and the result is the attachment of neighbouring and performance rights to an additional $682.5M in revenues (546 x $1.25M). The CMRRA does not disclose its revenues.

So the nut of the review is about money and, as we well know, few things in life are more divisive than discussions about money: who has it, who pays it, and in what amounts.

An overview of what lawyers and lobbyists will be pushing for can be found here; meantime, below we provide a thumbnail of some of the critical issues up for debate.

Reforms the music industry would like to see enacted in the 2018 review include:

• Ending all cross-subsidies paid by creators that subsidize corporations – such as the first $1.25 million revenue exemption on royalty payments that radio broadcasters currently enjoy.

• Reversal of a royalty exemption on 30 second sound bites presently enjoyed by online companies.

• Extending the copyright term for life plus 70 years (from 50) for author and songwriter works.

• Set standards for the Copyright Board of Canada (CBC), so that decisions are transparent; set statutorily-imposed time limits on Board decisions, and permit rights collectives to enter into licensing agreements independent of the Board. FYI: Close to $500M in royalties are paid to rights holders annually as a result of the CBC’s decisions. – A complete list of submissions for reform of the CBC can be found here.

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• Toughen measures to block pirate sites in Canada, and toughen existing geo-blocking measures to enhance IP protection in the market.

• Address the "value gap" that has distorted valuations of creative endeavour on digital platforms.

The 2012 CMA contained many groundbreaking provisions, including:

• Makes explicit allowance for time shifting, format shifting and backup copies as long as no digital locks are involved.

• Expands the scope of fair dealing to include education, satire, and parody which enables users to make use of fragments of copyrighted works if no digital locks are involved.

• Introduces a new exception for user-generated content created using copyrighted works without digital locks.

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• Prohibits the circumvention of digital locks, even for personal use, with some limited exceptions (such as unlocking cell phones).

• Limits the amount of statutory damages for cases of non-commercial infringement to between $100 and $5,000 for all infringements in a single proceeding for all works. Statutory damages for commercial infringement range from $500 to $20,000 per work infringed.

• Adopts a “notice-and-notice” regime which requires ISPs to forward any notice alleging infringement received from copyright owners to the subscribers in question.

• Allows an educational institution or a person acting under its authority to reproduce a work, or do any other necessary action to display it.

• Allows libraries to reproduce works in its permanent collection in alternate formats if the original form is obsolete, or if the technology required to use the original is no longer available.

• Makes performers and photographers the primary owners of their commissioned works.

• Calls for a review of copyright law every five years.