With the Industry committee’s copyright review winding down, I appeared yesterday before the committee to discuss the state of Canadian copyright. The wide ranging two hour discussion focused on everything from fair dealing to crown copyright to concerns that publishers don’t fairly compensate authors for their digital licensing revenues. My opening statement placed the spotlight on five issues: educational copying, site blocking, the so-called value gap, the impact of the copyright provisions of the CUSMA, and potential reforms in support of Canada’s innovation strategy. An audio version and transcript of the opening statement is posted below.

Appearance before the House of Commons Standing Committee on Industry, Science and Technology, December 10, 2018

Good afternoon. My name is Michael Geist.  I am a law professor at the University of Ottawa, where I hold the Canada Research Chair in Internet and E-commerce Law, and I am a member of the Centre for Law, Technology, and Society. I appear in a personal capacity as an independent academic representing only my own views.

I have been closely following the committee’s work and have much to say about copyright reform in Canada. Given limited time, I’d like to quickly highlight five issues: educational copying, site blocking, the so-called value gap, the impact of the copyright provisions of the CUSMA, and potential reforms in support of Canada’s innovation strategy. My written submission includes links to dozens of articles I’ve written on these issues.

Educational Copying

First, the issues associated with educational copying. Notwithstanding the oft-heard claim that the 2012 reforms are to “blame” for current educational practices, the reality is the current situation has little to do with the inclusion of “education” as a fair dealing purpose. You need not take my word for it. Access Copyright was asked in 2016 by the Copyright Board to describe the impact of the legal change. It told the Board that the legal reform did not change the effect of the law. Rather, it said, it merely codified existing law as interpreted by the Supreme Court.

Further, the claim of 600 million uncompensated copies – which lies at the heart of the allegations of unfair copying – is the result of outdated guesswork using decades-old data and deeply suspect assumptions. The majority of the 600 million – 380 million – involve K-12 copying data that goes back to 2005. The Copyright Board warned years ago that the survey data is so old that it may not be representative. The remaining 220 million comes from a York University study, much of which as old as the K-12 data. Regardless of its age, however, extrapolating some old copying data from a single university to the entire country does not provide a credible estimate.

In fact, the committee has received copious data on the state of educational copying. It is unequivocal: the days of printed coursepacks have largely disappeared in favour of digital access. As universities and colleges shift to digital course management systems, the content used changes too. An Access Copyright study at Canadian colleges found that books comprised only 35% of materials. Moreover, the amount of copying that occurs with CMS is far lower than with print.

Most importantly, CMS allows for the incorporation of licensed e-books, open access materials, and hyperlinks to other content. At the University of Ottawa, there are now 1.4 million licensed e-books, many of which involve perpetual licences that require no further payment and can be used for course instruction. Further, governments have invested tens of millions in open educational resources and educational institutions spends millions annually on transactional, pay-per-use licences, even where those schools have a collective licence.

What this means is that the shift away from the Access Copyright licence is not grounded in fair dealing. Rather, it reflects the adoption of licences that provide both access and reproduction rights. These licences provide universities with access to the content and the ability to use it in their courses. The Access Copyright licence offers far less, granting only copying rights for previously acquired materials.

Therefore, efforts to force the Access Copyright licence on educational institutions by restricting fair dealing or by implementing statutory damages reforms should be rejected. The prospect of restricting fair dealing would represent an anti-innovation, anti-education step backward and run counter to the experience over the past six years of increased licensing, innovation, and choice for both authors and educational users.

With respect to statutory damages, supporters argue that a massive escalation in potential damage awards is needed for deterrence and to promote settlement negotiations. Yet there is nothing to deter: educational institutions are investing in licensing in record amounts. Promoting settlement negotiations amounts to little more than increasing the legal risk to students and educational institutions so that they have no other viable alternative than to pay for an unnecessary licence.

Site Blocking

Second, site blocking. This committee has heard from several witnesses who have called for the inclusion of an explicit site blocking provision in the Copyright Act. I believe this would be a mistake. First, the CRTC proceeding into site blocking earlier this year led to thousands of submissions that identified serious problems with the practice including from the UN Special Rapporteur for Freedom of Expression who raised freedom of expression concerns and technical groups who cited risks of overblocking and net neutrality violations. Second, even if there is support for site blocking, it already exists under the law with much-needed oversight as the Supreme Court’s Google v. Equustek decision demonstrates.

Value Gap

Third, the so-called value gap. Two issues are not in dispute: the music industry is garnering record revenues from Internet streaming and subscription streaming services pay more to creators than ad-based ones.

The question for the copyright review is whether Canadian copyright law has anything to do with this.  The answer is no. The notion of a value-gap is premised on some platforms or services taking advantage of the law to negotiate lower rates. Those rules – such as notice-and-takedown – do not exist under Canadian law. That helps explain why industry demands to this committee focus instead on taxpayer handouts such as new taxes on iPhones. Those demands should be rejected.

CUSMA

Fourth, the impact of the CUSMA. The copyright provisions in this new trade agreement significantly alter the copyright balance by extending the term of copyright by additional 20 years, a reform Canada has rightly long resisted. By doing so, the agreement represents a major windfall that could run into the hundreds of millions for rights holders and creates the need to recalibrate Canadian copyright law to restore the balance.

Pro-Innovative Reforms

Fifth, there are important reforms that would help advance Canada’s innovation strategy. For example, greater fair dealing flexibility – adopting the “such as” approach – would make the current list of fair dealing purposes illustrative rather than exhaustive and would place Canadian innovators on a level playing field with fair use countries such as the U.S. That reform would still maintain a full fairness analysis along with longstanding jurisprudence to minimize uncertainty. In the alternative, an exception for informational analysis is desperately needed by the AI sector.

Canada should also establish new exceptions for our digital lock rules, which are among the restrictive in the world. Canadian business is at a disadvantage relative to the U.S., including in the agriculture sector, where Canadian farmers do not have the same rights as those found in the U.S.

Moreover, given the government’s support for open government – including its recent funding of Creative Commons licensed local news and support for open source software – the committee should recommend addressing a open government  copyright barrier by removing the crown copyright provision from the Copyright Act.

I look forward to your questions.